BIS calls for GCA to have greater teeth

A Parliamentary committee has called for changes to the Grocery Code Adjudicator (GCA) to make it more effective.

It has demanded that indirect suppliers such as farmers and trade associations be able to provide evidence to spark investigations and that the Adjudicator has the power to fine retailers. 

The draft Bill for the GCA, which was published by the government in May, will see the establishment of an independent body to enforce the Groceries Supply Code of Practice (GSCOP) and ensure that the major retailers deal with their suppliers fairly.

The draft bill currently proposes that fines are available only if the Secretary of State has authorised the Adjudicator to impose financial penalties. However, the Business Innovations and Skills (BIS) committee has called for the Bill to include fines as a sanction available to the Adjudicator and urged the government to move ahead with legislation as soon as possible.

Chairman of the committee Adrian Bailey MP said: “We propose that fines be an available penalty from the start, not least so that the Adjudicator’s performance can be judged on the basis of a full package of remedies.

“We were convinced that trade associations can act as a useful source of evidence and provide helpful additional anonymity for suppliers. By the same token, there is a case for allowing whistle-blowers who are employees or ex-employees of a retailer to supply evidence of breaches. 

“We also heard strong arguments that indirect suppliers to large retailers, such as farmers, should be given a voice, and we therefore agree with the government that they should be able to draw attention to potential code breaches despite not being covered by the code."

The British Retail Consortium (BRC) said that while it was disappointing that the committee has not rejected allowing anonymous and third-party complaints, it was right to recognise the need for strict and robust guidance.

BRC food director Andrew Opie said: “We have always said it’s in supermarkets’ own interests to have good long-term relationships with their suppliers and an adjudicator is not necessary. But, if the government is set on introducing one, it must keep the regulatory burden and related costs down, to avoid higher shop prices for customers.

“The Committee is right to call for a high level of evidence before the Adjudicator launches an investigation and to say it should only respond to complaints, not go on fishing trips.

“It should have rejected anonymous and third-party complaints but the recognition of our concerns about the, ‘potentially huge costs to retailers of having to respond to anonymised complaints,’ and the need for strict guidance is welcome.”

The GCA recommended by the Competition Commission  in 2008 after a voluntary agreement to implement a code of practise failed to materialise.  The final bill is expected to be introduced in 2012, with an adjudictor appointed to the role in mid-2013.

>GCA draft bill finds mixed support


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