Groceries Code Adjudicator Bill [Lords]

Debate between Justin Tomlinson and Philip Davies

Tuesday 26th February 2013 Commons Chamber

[Justin Tomlinson (North Swindon) (Con)]

On the evidence of what has happened so far, has the current groceries code been well utilised since its introduction?

[Philip Davies]

My hon. Friend asks a good question and strikes at the heart of why the Bill is a nonsense. There is no evidence that the groceries code is being abused. Nobody has yet been able to come forward with any such case. They all give reasons why they cannot do so, but the fact remains that there are none. There is no evidence that the code is not being applied properly.

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[Philip Davies]

So my hon. Friend does not think that Procter & Gamble is big enough to look after itself. He thinks poor little Procter & Gamble—that poor mite—needs a state adjudicator to intervene on its behalf because it might find itself at the wrong end of an unfair negotiation with a supermarket.

[Justin Tomlinson]

We are on the side of David, not Goliath. It seems eminently sensible that my hon. Friend’s new clauses would focus attention on the genuine David, not on supporting the real Goliath.

[Philip Davies]

I am grateful to my hon. Friend. We were told that that was exactly the purpose of the Bill in the first place. When it was being sold to us, nobody said it would benefit Procter & Gamble. As has been rightly said, if we want the adjudicator’s time freed up to look after the small suppliers, we do not want its time being taken up by these big multinational corporations.

As it happens, I am going to say something that might seem controversial, but to be perfectly honest I do not particularly care. If supermarkets are going around screwing Procter & Gamble into the ground to get the cheapest possible price to pass on to their customers, I say, “Good on them!” Procter & Gamble’s profits will not be massively impacted on by the supermarkets. I want supermarkets to negotiate robustly with big companies in order to get prices down for my constituents. The Labour party is supposed to support the working person—the people on fixed incomes—but the early indications are that its Members will vote to protect Procter & Gamble’s interests over the interests of their constituents. What on earth has the Labour party come to, when it sides with Procter & Gamble?

It is not just Procter & Gamble, however. We have Harvest Energy, Green Energy Fuels, Imperial Tobacco, Arla Foods and Gallaher—the top suppliers to supermarkets. The naive people who think that the adjudicator will not empire build are living in cloud cuckoo land. If they think that the adjudicator will not look into all sorts of things, they obviously have no experience of these matters.

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[Philip Davies]

I am grateful to you, Mr Speaker.

The hon. Member for St Ives (Andrew George) misreads the Bill, but I will come to the point about the recovery of investigation costs when we debate the other groups of amendments. The Bill does not say that those costs have to be recovered in that way; it says that they “may” be recovered. He seems to have huge faith in allowing the adjudicator to do just as it pleases, but I do not want it to do just as it pleases. I want it to follow strict rules that will prevent it from empire building, and that is part of the purpose of my new clauses.

[Justin Tomlinson]

The adjudicator will clearly have finite amounts of time and resources. Surely it would be better for it to focus on the smaller suppliers who do not have the confidence or the resources to take on the supermarkets.

[Philip Davies]

My hon. Friend is absolutely right; that is the purpose of the Bill. The big multinational companies that I have mentioned are the biggest suppliers to the supermarkets, in that they supply the biggest volume of the 40,000 or so products on sale in supermarkets at any given time, and they therefore have the most scope to benefit from the Bill. Why on earth should we wish to enable them to do that? I do not know the answer, and no one has yet argued that Heinz or Nestlé cannot afford to take their contractual disputes to court or explained why we need an adjudicator to act on their behalf. They do not need an adjudicator; they are perfectly big enough and bad enough to look after their own interests without needing an adjudicator to step in, and so are the supermarkets.

When there is an agreement between a huge multinational supermarket such as Asda, which is owned by Wal-Mart, and a huge multinational supplier such as Heinz or Walkers or Nestlé, let them get on with it. If there is then a row about who has broken a particular rule, let them get on and sort it out themselves. Believe you me, Asda needs Heinz products in its stores just as much as Heinz needs Asda to sell its products. It is a perfectly even arrangement between the two; the one could not manage without the other. Let them sort the disputes out between themselves. Why on earth are we legislating to get involved in those disputes? That is completely ridiculous. Members are arguing that the introduction of a groceries code adjudicator will help small suppliers, and supporting new clauses 1 or 2 will give them an opportunity to make it abundantly clear to the House that the Bill is designed to help the smaller suppliers to supermarkets.

I want to explain why I have used the figure of £500 million in new clause 1 and £1 billion in new clause 2, and why—with your permission, Mr Speaker—I shall put new clause 2 to a vote. I have listed some of the suppliers that would be covered by the £1 billion figure in new clause 2. The adjudicator will deal with retailers with a turnover of more than £1 billion. The Bill is effectively saying that other people need protecting from such huge organisations, and that they are too big not to have an unfair advantage in any contract negotiation. The Bill therefore puts in place a kind of backstop. My point is that if a supermarket with a turnover of £1 billion a year is deemed big enough to look after itself without any extra help or support, surely suppliers with a similar turnover are in exactly the same situation. If a supermarket with such a turnover is deemed too big to be trusted to negotiate properly, why would a supplier with a similar turnover need the protection of the adjudicator? Where on earth is the logic in that?