Groceries Code Adjudicator Bill [Lords]

Chris Bryant Excerpts

Monday 19th November 2012 Commons Chamber

[Jo Swinson]

My hon. Friend is absolutely right. We are introducing the adjudicator because of the benefits it will bring in dealing with potential issues of consumer detriment, as identified in the Competition Commission report.

I believe that our large supermarkets can be a very good thing for consumers, for employment and for our economy. In the vast majority of cases, they treat their suppliers lawfully and fairly. Unfortunately, as the House will be aware, the Competition Commission’s 2008 report on the supply of groceries showed that in some cases large supermarkets were transferring excessive risks and costs to their suppliers. That included practices such as the retrospective varying of supply agreements to force suppliers to take on unexpected extra costs, which is why the Groceries (Supply Chain Practices) Market Investigation Order 2009 came into force in 2010. The order contains the groceries supply code of practice and requires the 10 largest retailers with an annual turnover of over £1 billion to incorporate the code in all their supply agreements. The code sets out a general principle that retailers must treat their suppliers lawfully and fairly and also contains more specific requirements on how retailers should deal with their suppliers.

[Chris Bryant (Rhondda) (Lab)]

Sometimes these commercial operators try to crowd out competitors using pretty dodgy means. When they are caught, they try to cover it up, which is why it is very important that schedule 2 is strengthened. The adjudicator may well ask for information from commercial operators, but I fear that the powers in the measure are nowhere near strong enough to be able to force operators to provide that information. They are not as strong, for instance, as the civil provisions under Norwich Pharmacal arrangements.

[Jo Swinson]

If information is not provided to the groceries code adjudicator, that will constitute an offence, which is a strong power for the adjudicator. We can discuss the details in Committee, but we do have the power that is required in the Bill and its schedules.

[Chris Bryant]

But one problem is that big corporations quite deliberately hide things from adjudicators. Unless an adjudicator knows precisely what to ask for, corporations may end up not handing it over, which is why it is vital that a full disclosure requirement, if necessary, is available to the adjudicator. Will the Minister consider that?

[Jo Swinson]

The hon. Gentleman is making a distinct bid to be on the Bill Committee, and the usual channels will have taken note. I am sure he would like nothing more than to consider this measure and the schedules in intricate detail. I believe that the power available to the adjudicator is sufficient, and we will make sure that the right individual is in that position with a good understanding of the markets with which they are dealing. That person is therefore unlikely to have the wool pulled over their eyes, and will know the right questions to ask.