NFU: independent grocery code watchdog vital amid consolidation

An independent Grocery Code Adjudicator (GCA) is essential to maintain fair trading amid industry consolidation, according to NFU president Meurig Raymond, who praised Christine Tacons positive influence on supermarkets.

The GCA plays an important role within the grocery sector and undoubtedly Tacon has had a positive impact since she took office in June 2013. The NFU believes the power of the GCAs presence has enabled a change in retailer behaviour and therefore this way of working now needs to be replicated throughout the whole supply chain.

It is also vital that the position remains independent. The power of intermediaries has increased in the years since the Competition Commissions investigation of 2008. Many businesses have increased their market power which they have been able to assert over suppliers and, to a lesser extent, retail customers as we have seen reported in the media over the past few months.

The increasing consolidation of suppliers and processors within the supply chain, in turn reducing competition and increasing buying power, leads to a power imbalance within the supply chain; that of the intermediaries versus farming businesses. This has led to unfair trading practices to be pushed onto producers.

Raymond again called on the scope of the Groceries Supply Code of Practice to be increased to encompass smaller retailers, foodservice and food manufacturers, together with sectors such as flower and plant suppliers.

We would also like to see the principles of the agri-sector voluntary codes of practice, such as the Dairy and Livestock Voluntary Code, made compulsory and overseen by the GCA to give them more teeth, he added. This will give primary producers the confidence that the supply chain is not abusing their buying power and position over that of the British farmer.

Raymond said the NFU wanted the GCA to have the ability to take evidence of any breach from primary producers. Farmers need to have confidence in their trading relationships to be able to invest in their businesses. This allows them to innovate and become more efficient in producing quality British food.

British farming is the bedrock of the food and drink industry worth 108 billion - providing jobs for 3.9 million people growing the raw ingredients for UK food and drink. We need to create a supply system which is fair, transparent and has benefits for everyone in the food chain.

Results from the latest GCA Annual Survey, released before Christmas, show that both Tesco and Iceland improved the most in changing their trading practice over 2016. Tesco improved from 37% in 2015 compliant with GSCOP, to 65% in 2016 and Iceland from 3% to 26% compliant.

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