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Power to fine supermarkets for Groceries Code breaches edges closer

Published:  29 January, 2015

The power to fine supermarkets up to 1% of their turnover for breaching the Groceries Code have edged a step closer after being laid in Parliament.

The power to fine supermarkets up to 1% of their turnover for breaching the Groceries Code have edged a step closer after being laid in Parliament.

Christine TaconChristine Tacon

Earlier this month Groceries Code Adjudicator Christine Tacon admitted she was hamstrung in her efforts to reprimand retailers who failed to comply with the Groceries Code.

She said that while she had the legal power to administer a fine, no maximum amount had been set down in law, effectively rendering the power useless. Tacon has been in post for over a year.

The delay in granting the power has come under scrutiny in recent weeks, as speculation over the fair treatment of suppliers by retailers has heightened following the Tesco misstatement of profits and subsequent investigations. A survey of wine and spirits suppliers by Harpers.co.uk found that one third of respondents named Tesco the worst retailer to work with. 

In addition to handing out a hefty financial penalty, the Adjudicator can already issue supermarkets with recommendations for future conduct, and 'name and shame' those that have breached the Code.

In the main the Code relates to fair dealing with retailers' direct suppliers, and includes specific provisions governing terms of supply, timing of payments, marketing and promotional costs, and payments as a condition of being a supplier. 

Business Secretary Vince Cable said: "This important final step will give the Groceries Code Adjudicator the power it needs to address the most serious disputes between the large supermarkets and their direct suppliers.

"I created the Groceries Code Adjudicator to ensure a fair deal for those who supply goods to supermarkets such as farmers and small businesses.  I am pleased today to be giving the Adjudicator the final element in a set of powers that will give this new body all the tools it needs to succeed in this challenging and important role."

The role of the Groceries Code Adjudicator was created in 2013 to enforce the Groceries Supply Code of Practice that, since 2009, has governed the commercial relationships between the UK's ten largest supermarkets and their direct suppliers of food, drinks, and a range of household products.

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