Groceries Code Adjudicator Bill [Lords]

Julian Sturdy Excerpts

Monday 19th November 2012 Commons Chamber

[Julian Sturdy (York Outer) (Con)]

I am grateful for the opportunity to speak in this debate. As a Member representing a series of villages linking the city of York to the distinct rural north and east Yorkshire countryside, I am always keen to speak in debates touching on the agriculture industry. Before my election to Parliament, I, too, was a farmer, and as such I have first-hand knowledge of some of the pressures facing many of the UK’s independent producers. I must therefore draw Members’ attention to my declaration of interests.

Like many Members from both sides of the House, I congratulate the Government on introducing this Bill. Like many Members, I have long called for some form of adjudicator or ombudsman to ensure that our major supermarkets and retailers operate fairly throughout the industry’s supply chain. This is about treating farmers and suppliers fairly and lawfully. My representations have followed on from first-hand experience of dealing with constituents’ cases in many parts of York Outer, where small independent farmers or producers feel unfairly treated by the tactics of some national supermarket chains. However, it would be wrong to view this Bill simply as a reflection of a fundamental battle between big supermarkets and small producers. On the whole, our national supermarkets should be a source of great pride. They are massive job and wealth creators in our country, which is something the Minister touched on in her opening remarks. Many supermarkets undertake superb community work whenever they open a store. I am sure that, like me, Members from across the House will have first-hand experience of the community work that supermarkets do in their patch.

Nevertheless, as in all areas of industry, it is right that accountability, transparency and an independent watchdog should encourage and ensure fair practice for all involved. That is what a groceries code adjudicator will do. As such, I am pleased that the general principles behind the Bill seem to be attracting cross-party support, allowing today’s debate to focus on the powers and responsibilities that the adjudicator will have. Introducing a groceries code adjudicator represents a common-sense step in the right direction, but that will be undermined if the body lacks the teeth it needs to operate effectively.

It is worth mentioning that we have had a groceries supply code of practice in force for a few years now. As the president of the National Farmers Union, Peter Kendall, has said, it is

“essentially a rulebook without a referee.”

I would go one step further and suggest that without adequate teeth, the groceries code adjudicator would be like a referee without a whistle—or, as the hon. Member for Edinburgh South (Ian Murray) said, one without a red card in his top pocket. As a Leeds United supporter, I would not mind a referee at our next match without a red card in his top pocket, but we need a groceries code adjudicator with the ability to take action. The fear with all new regulatory bodies is that they are set up too cautiously, becoming ineffective talking shops, unable to gain influence or authority in the sector. To me, the idea of setting up an adjudicator now, before adding powers at a later stage, is frankly flawed. If we are going to do this, we must do it properly and equip the adjudicator with the necessary powers from day one.

In my view, the necessary powers should at least include the ability to fine retailers for major—I stress the word “major”—breaches of the groceries supply code of practice. Without that power, I fear that the adjudicator will have limited impact. One example of where a properly empowered adjudicator would make a real difference in the supply chain is the current plight of the dairy industry. Over the past few years, many dairy farmers have been unfairly penalised by what can only be described as unfair, inflexible contracts that have sought to take advantage of the product’s perishable nature. There is hope on the horizon, following the agreement of a voluntary code of practice for milk supplier contracts between UK dairy farmers and processing firms. However, getting the voluntary code agreed required substantial political pressure and lengthy negotiations, with dairy farmers sadly going to the wall in the meantime. This is a perfect example of where a strong groceries code adjudicator could make a difference, intervening in such disputes with authority at an early stage.

In conclusion, this Bill is welcomed across the country by the independent suppliers who need the reassurance and support of an independent watchdog. Moreover, a strong groceries code adjudicator would encourage strong links between all parties in the supply chain, benefiting those at each level and ultimately the consumer too. It has to be in the interests of consumers that we have a thriving agricultural sector in this country supplying high quality products, while at the same time reducing our reliance on imports, at a time when food security will undoubtedly become one of the big issues of the future. However, the Government have grasped the nettle on a groceries code adjudicator, and they should be applauded for doing so. This is a good Bill, but the question throughout its legislative journey will be about its strength. I encourage Ministers to show strength by adding the powers required to make the groceries code adjudicator a real success.