Retailers may face substantial fines for malpractice

The move to grant the Grocery Code Adjudicator (GCA) the ability to fine retailers has come immediately after calls from MPs to extend the remit of the office of Christine Tacon to indirect supply.

The powers, which had been planned since the inception of the Grocery Code Adjudicator, gives the ability to impose substantial fines on retailers of up to 1% of turnover if a retailer is found to have punished a direct supplier through unfair trading practices.

NFU Scotland welcomes this move as it gives the Grocery Code Adjudicator the teeth required to change practice within the supply chain, which will improve the stability of farmer and processor businesses.

However, NFU Scotland has consistently encouraged the UK government to extend the role of the Grocery Code Adjudicator to cover indirect supply, protecting farmers and primary producers from malpractice within the industry. The need for a wider approach to supply chain relationships was highlighted in recent weeks because of the continuing plight of dairy farmers across the country, with farmgate milk prices falling below the cost of production for many.

NFUS is pleased that action is finally being taken to improve the usefulness of Grocery Supply Code of Practice and the office of the Adjudicator, but this action has been forthcoming for longer than many have needed.

NFUS chief executive Scott Walker said: “It’s positive that the GCA is finally getting the claws with which to fight malpractice, but it was clear before farmgate milk prices fell so low that the remit of the Adjudicator must be extended beyond direct supply relationships.

“Farmers and producers of all types need to feel secure in their businesses and the primary focus of legislators and industry bodies should be to protect farmers from unfair trading practices.

“We welcome the positive work that has been done by the office of the Grocery Code Adjudicator and look forward to working with Ms Tacon now buoyed by the powers announced today.”

Note to Editors

• The office of the Grocery Code Adjudicator was established in 2013 to oversee the relationship between supermarkets and their suppliers.
• The Grocery Supply Code of Practice, published in 2009, defines the expected practice from retailers with their suppliers.
• NFU Scotland has consistently lobbied for the Grocery Code Adjudicator to have power to oversee both the direct and indirect supply chain.
• This move follows recommendations from the House of Commons Environment, Food and Rural Affairs Committee met to discuss the plight of UK dairy farmers and claimed that the powers of the Adjudicator were “too restricted” to help protect farmers from falling farmgate prices.
• The need for increased powers for the office of the GCA was raised by NFU Scotland as a special meeting of the Scottish Parliament’s Rural Affairs, Climate Change and Environment Committee this week. (Tuesday 27th of January)

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Contact Bob Carruth on 0131 472 4006