Groceries Code Adjudicator Bill [Lords]

Barry Sheerman Excerpts

Monday 19th November 2012 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

I beg to move, That the Bill be now read a Second time.

I am delighted to bring the Groceries Code Adjudicator Bill from the other place to this House. Its purpose is to establish a groceries code adjudicator. The adjudicator will oversee the large supermarkets’ compliance with the groceries supply code of practice and will have the power to impose sanctions against retailers that do not treat their suppliers lawfully and fairly as required by the code.

I have been encouraged by the Bill’s passage through the other place. All parties showed a real common purpose and commitment to improve market conditions. We are pleased to have accepted amendments that have made the Bill stronger, in particular on allowing a fairer allocation of the levy so supermarkets that behave badly will pay more. We have also accepted changes to ensure that financial penalties can be brought in more swiftly.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Will the Minister give way?

[Jo Swinson]

I will, as I am aware that I am now addressing one of the main topics of debate.

[Mr Sheerman]

The Minister will be aware that many constituents have written to their Members of Parliament about the size of the fines imposed on supermarkets that do not co-operate, and how quickly they can be levied. Did she get the general impression from the debate in the other place that this is a weak instrument with which to take on some of the most well-organised, monopolistic organisations in the country?

[Jo Swinson]

I do not agree with that characterisation. I think the adjudicator will be able to make a real difference. We have put a range of tools at its disposal, which, particularly given the importance that supermarkets attach to their brand reputation, I believe will have a real effect. I will discuss this issue in more detail later, but it is worth bearing in mind that the Business, Innovation and Skills Committee looked at this and recognised that the arguments are finely balanced. I acknowledge that Members will, perhaps, come at the issue from different sides of the argument, but I am confident that the Government’s position is the right one. I intend to give a brief overview of the Bill and the role of the adjudicator, and I will then set out in detail why we believe financial penalties should initially be a reserve power.

The Bill is important on two counts. It promotes growth and a competitive food and groceries sector, and it helps to ensure a fair deal for suppliers. In the current economic climate, it is more essential than ever that our groceries sector is allowed to grow and thrive. Therefore, Government, suppliers and retailers need to work together to ensure that the marketplace between supermarkets and suppliers is fair, open and competitive.