Groceries Code Adjudicator Bill

Baroness Wilcox Excerpts

Monday 13th June 2011 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

My Lords, the Government published the draft Groceries Code Adjudicator Bill on 24 May—that is, they have published draft legislation during the first Session, as they set out to do. The objective is to introduce a final Bill in the second Session, although it could be earlier if we have the opportunity. Of course, the timetable for introducing the final Bill will also be subject to the outcome of the pre-legislative scrutiny.

[The Lord Bishop of Wakefield]

My Lords, I am most grateful to the Minister for her encouraging reply. One of my main concerns is the speed of implementing this legislation because of further haemorrhaging in our dairy industry, in particular. However, I am also concerned that the adjudicator should have teeth. In relation to the implementation of the Groceries Supply Code of Practice, can the Minister explain why financial penalties will not be available to the adjudicator in the early stages of operation but will be made available only by order of the Secretary of State?

[Baroness Wilcox]

I know that the right reverend Prelate the Bishop of Wakefield is most anxious to see the groceries code adjudicator established, as the pastoral care of farmers in his diocese is important to him. The Government believe that the most effective way to handle this matter in a highly competitive market is to name and shame retailers who breach the code. However, if experience shows that negative publicity is insufficient, the Secretary of State will have reserve powers to allow the adjudicator to impose financial penalties. I know that the Commission recommended that we should have such financial penalties, but the Government believe that the most effective method of control is to go through the naming and shaming process and to see whether that works before resorting to fining.

[Lord Avebury]

My Lords, is my noble friend aware that many Members in another place who represent agricultural constituencies—primarily my honourable friend the Member for Ceredigion—have campaigned for some years for legislation along these lines to afford protection to agricultural producers against the abuse of monopoly power by large retailers? Would it not be wise therefore to take these interests into account and to press on with the Bill as rapidly as possible?

[Baroness Wilcox]

My Lords, we all agree that we wish to get this legislation through as quickly as we can. We have widespread cross-party support, and one retailer, Waitrose, already supports it, as do bodies representing suppliers, including farmers and third-world producers. However, as my noble friend knows, we have to go through the legislative process. If we can bring the Bill forward any earlier than we are aiming to do at the moment, then we certainly will, but there is a very full legislative programme and everyone thinks that what they have to do is extremely important. However, I fully agree with my noble friend and I, too, should like to see the legislation brought forward earlier.

[Lord Kennedy of Southwark]

My Lords, I think we would all support the groceries code and adjudicator who will ensure that British farmers and growers get a good price for their quality produce. However, can the noble Baroness tell us whether other producers will get a fair price for their produce? I am thinking, in particular, of the banana industry in the Caribbean.

[Baroness Wilcox]

I am delighted to answer this question because I know that third-world producers are very keen for the adjudicator to be in place. I agree that suppliers to the large supermarket groups come in all shapes and sizes. I was once one myself, so I know exactly how this process works and exactly where the worries lie on either side. However, it is worth remembering—I used to have to remind myself of this—that these are huge contracts and people go for them because they are a wonderful way of increasing employment and expanding one’s business. Therefore, a balance has to be found.

[Baroness Byford]

My Lords, does the Minister accept that there is extreme pressure from all sides of agriculture to have the adjudicator in place as soon as possible? The right reverend Prelate mentioned dairy, but the situation for pig farmers is extremely acute, and a lot of supermarket offers promote imported products rather than our own, which seems grossly unfair. Everybody is hoping for a fair deal for all those who have to deal with the few major players who control prices.

[Baroness Wilcox]

The whole reason for bringing in the adjudicator will be to arbitrate in disputes between the large retailers and their direct suppliers, and to investigate possible breaches of the grocery code, which has been in place for a year now. Of course, when there is a group of very big supermarkets together, that is a worry. That is the whole reason for putting this in place and I am sure that the noble Baroness would want this to go through as quickly as possible.

[Lord Young of Norwood Green]

My Lords, we welcome the Bill and the assurances received. The Minister said that only direct applications from suppliers can be made to the adjudicator. Why will the Government not consider trade associations? The Government have allowed anonymity in terms of representations, but allowing trade associations to make a direct representation on behalf of suppliers would be a valuable source of evidence for the adjudicator to consider.

[Baroness Wilcox]

I have no doubt that as the Bill goes through, the noble Lord will stand up and put these points to me. I am absolutely sure that everything will be considered. At the moment that is exactly what we are doing: looking at every possible way of getting this right for our country.

[Baroness O'Cathain]

My Lords, the noble Lord, Lord Kennedy, made a point about bananas. Almost all the major supermarkets now have Fairtrade bananas. Is there anything we could learn from the organisation of Fairtrade bananas in this country that we could copy for dairy, pork, sausages or anything else?

[Baroness Wilcox]

My noble friend makes a very good point. I am quite sure that other areas will be looking at the way in which Fairtrade and other such organisations have chosen to supply.