Government Gives Green Light For Supermarket Ombudsman

Thu, 14 Jan 2010
 
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The government has announced a new supermarket ombudsman is to be created to protect suppliers and farmers from Britain’s large grocery retailers .

The Competition Commission has put together a new code of practice to govern relations between supermarket chains and their suppliers.

The new groceries supply code of practice will come into force on February 4 and will be followed a period of consultation on how the code should be enforced and what powers the ombudsman should have.

According to the Department for Business, Innovation and Skills, the watchdog will cost £3.7m to set up and a further £1.3m a year to run.

The move comes after a two year investigation by the Competition Commission into the UK supermarket sector, which discovered that the larger food retailers were passing on unexpected costs and excessive risk to independent suppliers.

Commenting on the plans, Consumer Minister Kevin Brennan said: "The power that large grocery retailers remain able to wield over their suppliers can still create pressures on small producers."

"However the government is mindful of placing unnecessary costs on to business especially in a period of economic difficulty, which is why we plan to issue a consultation on how best to take matters forward."

He added: "We do not anticipate a significant impact on consumer prices or workers resulting from the creation of an enforcement body."

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