Supermarket ombudsman must be cost-effective - Conservatives

Speaking to Farmers Guardian at the Conservative Party conference in Manchester, Mr Paice said the Tories did not want to add ‘bureaucracy’ if it did not give value for money.

He said: “There needs to be a code of practice properly enforced, but whether that requires a freestanding ombudsman which would be a new bureaucracy is not clear.”

Mr Paice went on to suggest it could be more cost effective to control supermarket power by introducing an ombudsman to existing government agencies

“In my view the code of practice could be enforced by an ombudsman figure in one of the existing regulatory bodies. Clearly, our overriding objective is to have a code that is properly enforced and our job is to find the best and most cost-effective way of doing that.”

In August this year, after a two year investigation, the Competition Commission recommended government to set up an independent ombudsman to prevent supermarkets from bullying their suppliers.

The Conservatives initially backed calls for an independent ombudsman but Mr Paice’s recent comments seemed to echo those of Andrew Opie, director of food at the British Retail Consortium (BRC), who said a separate body would be inefficient.

Mr Opie said: “The last thing needed at any time, let alone in a recession, is a multi-million-pound bureaucracy, unnecessarily piling on costs and pushing up shop prices.”

Apart from an ombudsman, Mr Paice said there were other ways to improve farmers’ bargaining position with supermarkets without adding bureaucracy. He said the Tories would look carefully at reviewing the brief of the Office of Fair Trading (OFT) to stimulate the development of producer organisations.

“To get power back on the supply side would be a far more effective way of dealing with supermarkets than any regulation,” said Mr Paice who criticised the British habit of breaking up cooperatives, especially within the dairy sector.

“There has been a tendency in the UK to say that producer organisations should not get too big but if producers are going to compete with supermarkets they need to work together.

“We need to look at the brief of the OFT to ensure producers are able to get together and be seen to operate in a European market rather than in a UK context,” he said.