Groceries Code Adjudicator

Jim Shannon Excerpts

Tuesday 3rd June 2025 Westminster Hall

[Sir John Hayes]

The right hon. Gentleman is right. That is why, when he and I were in Government together, we introduced the Groceries Code Adjudicator. He will remember that I worked closely with his colleague Vince Cable, then Secretary of State, and was involved in that decision. He is also right to focus on the producers. I have spoken so far about consumers, but I want to go on to talk, thirdly, about the distortion in respect of producers.

I began my speech by speaking about how both producers and consumers need a multiplicity of places to buy and sell. In the model that I set out, the one that prevailed for aeons, people who made and grew food, primary and secondary producers, were able to sell to a variety of places. In our lifetimes—I might be overestimating the age of some hon. Members present, but certainly in many of our lifetimes—markets existed where farmers would take their produce to auction. Indeed, there was a livestock market in Spalding in the streets until the 1930s and a covered market until the 1990s, where livestock was brought to be traded and auctioned very openly.

Producers have also been affected by this distortion. As the food chain breaks, it is not only consumers who struggle, able to go to only one or two places to get not just what they want, but what they need, because, as I said, foodstuffs are fundamental.

[Jim Shannon (Strangford) (DUP)]

I thank the right hon. Gentleman for bringing forward this debate on an incredibly important topic. Those of us here will express that shortly. Does he welcome, as we all should, the commitment shown by these examples? Tesco, Asda and Lidl in my constituency have an arrangement on Fridays and Saturdays to give those goods that are coming to the end of their shelf life but are still consumable to local community groups, which in turn filter them out to those who need help, the families below the poverty level. We are sometimes hard on the superstores for what they do, but we should recognise that there are occasions when they play their part.

[Sir John Hayes]

The hon. Gentleman is right. His endless good will, known in this House for some time, encourages him to emphasise that supermarkets do deal with their waste products, but inevitably, as well as the waste products that over-consumption produces, supermarkets throw away many of the things on their shelves because of sell-by dates. It is hard to get a handle on, because quite a lot of it is disguised, but supermarkets themselves are actually contributing immense amounts of food waste.

It is true that some communities have found settlements for that, in the way that the hon. Gentleman described. Some supermarkets have at least paid lip service—I say at least, because it is occasionally more than that—to redistributing some of the waste food from their shelves into communities, but we should not be gulled by that. Burke said that tyrants seldom need a pretext; this is a kind of economic tyranny. To have a circumstance in which a near cartel of supermarkets can determine the price of products and then foist them on to a consumer base that has little other option is, in commercial terms, about as tyrannical as can be imagined.

You can tell from all that, Dr Allin-Khan, that I am not a great admirer of the large retailers, and not just for the reasons I have given. I doubt, for example, that supermarkets are particularly careful—by that, I mean they are careless—about the circumstances of their customers and employees. I am not confident that a supermarket chain has quite the sensitivity to a locality, to a community or to a group of people who become their customers and employees that a small family business has. Happily, I still have some of those small family businesses selling food in my constituency, and thank goodness for that, but their number has shrunk. The nation of shopkeepers is now a nation of very large shops, and those are corporate entities rather than the kind of shops that I imagine Napoleon had in mind. This huge problem has affected our high streets, where supermarkets have become more ubiquitous and the only grocers one can spot is a Tesco or a Sainsbury’s—or perhaps an Aldi or a Lidl—rather than the variety once seen up and down our constituencies.

It has also affected producers, as I will come on to in the second part of my speech, because my constituency is disproportionately responsible for the production of UK food. Lincolnshire grows 30% of the UK’s vegetables, 20% of the sugar beet, 18% of the poultry, 20% of the potatoes, and it processes 70% of the kingdom’s fish. In total, my county produces 12% of all the food that fills the shops and shelves, pantries and fridges of our country. Given that, one can understand the particular concerns that farmers and growers in my constituency have about the way those big retailers treat them.

The picture I painted, of an open economy where people can sell in a variety of places, has long gone. Most of my primary producers have very few options, and therefore often have a gun put to their head by their customers, the supermarkets. That might affect their terms of trade and the prices they are offered, which is why the relationship between farm-gate prices and retail prices is, again, distorted in this broken food chain. It often involves sharper practice still, where supermarkets cancel orders quickly; even when a farmer is tooled up ready to provide goods, they will find that in the next season they no longer have a contract to do so.

In the past, supermarkets have lumped all kinds of other costs on to the supplier, such as marketing and transport costs. That is unacceptable, and it is ultimately unsustainable, as those businesses make too little profit to reinvest and therefore become less competitive. We might say, “Well, surely the supermarkets need to obtain their goods to sell them,” but we know where they then go; they import goods from countries that produce those goods at standards we cannot imagine in this country, thereby putting even more pressure on domestic producers. Do we really want that, or do we want a country that cares about food security and becomes more economically resilient because more of what we consume is made here?

A Labour Prime Minister once spoke of British jobs for British workers. He was right. We indeed want British jobs for British workers and we want British goods for British consumers, too. We need to recognise that the provision of food as locally as possible provides economic security, cements and secures communities, and shortens supply lines and therefore, apart from anything else, has immense environmental benefits by cutting food miles. That is the kind of economy that we can have, because there is nothing inevitable or pre-ordained about fewer and fewer food suppliers dominating the food chain.

I have spoken about the impact on consumers of reduced choice and the impact on producers of not being able to trade their goods fairly and freely. Now, I shall talk about the changes we could make. In addition to the decline in income that all types of farm have suffered in the last several years—figures from the Department for Environment, Food and Rural Affairs suggest a sharp decline between 2023 and 2024—there is an issue with the GCA itself.

I am proud to have played a part in setting up the Groceries Code Adjudicator in 2013, but since then the GCA has conducted only two major investigations—into Tesco in 2015 and the Co-op in 2018. The GCA’s power to fine retailers came into force in 2015 and applies only to breaches that occurred after that date, so it did not apply to the first of those investigations. Then, in 2018, the adjudicator said that it did not consider

“the nature and seriousness of the breaches by Co-op to merit a financial penalty.”

So although the GCA has had the power to investigate and punish retailers who breach the groceries code, for that is what the GCA oversees, it has not done so. Why is that? Where is this reluctance rooted? What has been the reason for it?

The reason is partly that those detrimentally affected by the broken food chain are reluctant to report their problems to the adjudicator. They fear they will be identified and later punished—after all, these economic tyrants have little mercy. Those affected can go nowhere else to sell their produce, so what would they do then? They literally have nowhere to go. It is also partly that the adjudicator’s powers are insufficient, and that is the reason for and purpose of this debate.

I am pleased by the reports that the adjudicator is now taking a look at Amazon. As a matter of record, I have never bought anything on Amazon and never will; let me establish that before we go any further. I like to buy my goods in small shops, face to face, and meet real people. I do not want to live in the virtual world—why would we? I want to live in the real world. That investigation is good news, but I fear that, rather like the two previous investigations, it may come to nothing, merely raising false hopes of action that will not in the end be taken.

By the way, I hold in high regard the Chairman of the Select Committee, the right hon. Member for Orkney and Shetland (Mr Carmichael), with whom I worked in government. Not all Liberals are as bad as they are painted—at least, not as bad as they are painted by me, that is for sure. I know, too, that the Under-Secretary of State for Business and Trade, the hon. Member for Ellesmere Port and Bromborough (Justin Madders), is a good and responsible Minister, who will be listening to this debate with care. I implore him and the shadow Minister, my hon. Friend the Member for Keighley and Ilkley (Robbie Moore)—because the previous Government’s record on this is not great either—to step up to the mark, because the present position is unsustainable and cannot continue, for we cannot perpetuate a situation where a handful of corporate giants wield disproportionate power over the provision of food, and by so doing, dictate the food security of this country. If they continue to import food at the rate they are without care, how can we be food secure?

Let me deal with the particular measures we would like to see. We need to extend the role of the adjudicator to include more retailers and food service providers, including food manufacturing businesses, because at the moment the scope is narrow. We need to find a better way of guaranteeing the anonymity of those who bring their complaints to the adjudicator. Efforts have been made in that respect, and even at the time we set up the system we were mindful of that issue and tried to create some degree of protection for people going to the adjudicator with complaints, but I am not sure that has bedded in as well as it might have done. I know from speaking to farmers and growers in my constituency, whom I meet weekly, that that remains a fear. That is a barrier to the effective application of the adjudicator’s powers.

We also need to expand the adjudicator’s remit to include the ornamental sector, which is important in my constituency. Lincolnshire, particularly South Holland and The Deepings, has a thriving ornamental sector, employing a large number of people in many smaller, often family-run, businesses. They are currently outside the adjudicator’s scope and should be included.

We need the adjudicator to have a role in initiating inquiries and studies, rather than simply waiting for complaints. It would be perfectly reasonable for the adjudicator, on the basis of his or her expertise to initiate inquiries into particular aspects of food provision and retailer behaviour. We want a more proactive role. When the role of Groceries Code Adjudicator was established, it was dubbed the “food ombudsman”. That was never the official title, but perhaps it ought to be. Rather than simply having a narrow remit to enforce the groceries supply code of practice, perhaps the adjudicator could have a slightly broader remit to look at the whole issue of the provision of food and its relationship with food security.

When people such as the right hon. Member for Orkney and Shetland and I began speaking about food security donkey’s years ago, it was regarded as a rather arcane subject and we were seen as mildly eccentric for worrying about such things. Now, food security is a salient issue and at the top of many nations’ political agenda. More than that, it has become critical to national wellbeing. What a good time this is to think more laterally about the role of the food ombudsman and how it might reinforce the Government’s commitment to food security. It would be a way of delivering the objectives that the Government have set out. They said that they are keen to reinforce food security, so why not use the GCA as the means of doing so?

Doing that would allow the adjudicator to develop a strategy and to roll out a set of co-ordinated actions against unfair practices. I would include prices in that because, while all of the techniques I have briefly outlined are used to distort the relationship between buyers and sellers, prices are an issue. How can we ensure that farm-gate and retail prices are brought into closer union?

Just before Christmas last year, we had the obscene spectacle of one or two retailers bagging a series of vegetables in a plastic bag and saying, “These can be bought for 12p.” I had farmers and growers in my constituency telling me, “We have toiled hard to produce high-quality produce, only to see it being sold at a price far below the cost of production. Is it any wonder that the consumer does not appreciate the hard work that goes into making food and the quality of food grown in this country?” There has to be some means of reuniting value and cost by looking closely at the price farmers are paid and the price consumers subsequently pay. That is not to encourage food inflation, but simply to ensure that everyone gets a fair share of a bigger cake, rather than see their share be eaten up in the profits of these corporate behemoths.

By and large, I favour a capitalist economy, although I am not an unbridled admirer of capitalism. How could I be? I am a Conservative, after all. But on balance, I think it is perhaps the best of a series of faulty options. As I said at the outset, capitalism works when people can buy and sell in a multiplicity of places—circumstances that do not prevail in the UK food sector. By empowering the Groceries Code Adjudicator, which henceforth will be known as the food ombudsman, I think, we may be able to rebalance the provision of food and join again the food chain, which is so badly broken.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

It is a real pleasure to serve under your chairship, Dr Allin-Khan. I thank the right hon. Member for South Holland and The Deepings (Sir John Hayes), as we all do, for leading the debate and setting the scene incredibly well.

The Groceries Code Adjudicator is imperative in setting out standards for fair trading between large stores and their suppliers. The right hon. Gentleman referred to doing his shopping locally. I am the same, but I know that for the generation after me—my son, my daughter-in-law and all their family—Amazon is probably their first contact. Life is changing, and it seems cheaper to do it that way.

People are becoming more interested in the food that they are eating and where it is sourced. I have been a member of the all-party parliamentary group for eggs, pigs and poultry for most of my time in Parliament. I am of a generation for whom there is no better way to start a day than with two boiled eggs. I remember the ’60s—that is how old I am—when the advertisements on TV said, “Go to work on an egg.” Well, I could go to work on two eggs and finish the day with two eggs as well. I am probably keeping the egg industry going just with my own purchases.

I understand the importance of the issue for the livelihoods of farmers in my constituency. The GCA’s jurisdiction extends across the entire United Kingdom of Great Britain and Northern Ireland: it regulates designated retailers with an annual groceries turnover exceeding £1 billion. In Northern Ireland, the GCA’s role is particularly significant. The Ulster Farmers Union— I declare an interest as a member—has highlighted the GCA’s importance in maintaining fair trade practices amid ever more challenging economic conditions. It believes that

“the GCA performs an essential role in a modern, sustainable and competitive grocery market in the UK.”

There is no doubt that reducing or weakening the powers of the GCA will put suppliers and consumers at risk. In my constituency of Strangford, large chains such as Tesco, Asda and SPAR have contracts with numerous suppliers, and their contributions keep the sector going. I have a great relationship with many local suppliers in my constituency, including the likes of Mash Direct and Willowbrook Foods, which provide fresh potato and vegetable dishes. One example is a local farmer, Roy Lyttle—a small farmer, but a decent enough producer—who has just developed a new salad product, Lyttle Leaves. I believe it will take off.

Local farmers and butchers, such as Carnduff butchers and Colin McKee’s, are incredibly popular throughout my constituency. The issue is that grocery inflation has risen to 4.1%, the highest in 15 months, and there is always a possibility that it will continue to rise. That highlights the financial pressure on suppliers and manufacturers to provide products at a competitive rate and ensure that they can make a profit with their wonderful produce.

[Carla Lockhart (Upper Bann) (DUP)]

My hon. Friend will know that farmers in Northern Ireland feed more than 10 million people across the United Kingdom every year. Does he agree that our farmers are treated as shock absorbers? They carry all the risk and receive the least reward. They are still being relentlessly squeezed by powerful retailers and processors. Does he therefore agree that the GCA’s role needs to go further in protecting our farmers from unjust and unbalanced practices?

[Jim Shannon]

I wholeheartedly agree. My hon. Friend’s words are on record, the Minister is here, and hopefully he will respond in a positive way.

Workers have reported feeling lonely, stressed and isolated. They find it hard to connect with others; they often work alone or as part of a small workforce. They are the ones who produce the food on our farms, and they must be properly rewarded for their actions to ensure that supermarkets always have produce to sell. Unfortunately, with inflation rates, people are working harder and under more pressure, with little recognition.

The scope of the problem is highlighted by a 2025 BFAWU survey that shows that nearly 60% of food workers are not earning enough to meet all their basic needs such as rent, heating, electricity and food. Some 86% say that they have had to reduce their heating to save money. It is important in this debate to give the perspective of workers, because they are the ones doing all the real graft.

I will conclude with this point: we must look at the sustainability of the UK food supply chain and ensure that suppliers have access to large food suppliers at a decent price that reflects their work. There are calls for DEFRA here and the Department of Agriculture, Environment and Rural Affairs back home to work together, as the GCA applies to the whole United Kingdom. We must do more to protect the collective UK food supply. I hope that the Groceries Code Adjudicator will commit to doing so in Northern Ireland. I thank the adjudicator for doing his bit to protect the farmers and suppliers of Strangford.