Groceries Code Adjudicator

Lord Grantchester Excerpts

Tuesday 20th March 2012 Lords Chamber

[Lord De Mauley]

I am sorry to hear that the noble Earl thinks that I am being hesitant. I do not think that it is reasonable to imply that we have been dragging our heels. The process was triggered in 2008 during the previous Government’s term of office by a report from the Competition Commission. I would not criticise the previous Government for dragging their heels because, in fact, they were getting on with the business of trying to persuade the grocery industry itself to put in place a process. The industry did not do that. We all want to get this right, which is why we have been through a thorough process of pre-legislative scrutiny—and I think that that is something of which noble Lords generally approve.

[Lord Grantchester]

My Lords, we all wish to see the consumer get the best possible deal. However, this should not be at the expense of suppliers to the supermarkets; their confidence is crucial if this is to be seen to work effectively. If I might press the Minister again, will he confirm whether the adjudicator will have authority to levy financial penalties, should an abuse of power be upheld against any supermarket? Furthermore, however any resulting fine may be levied, will he confirm that this will not simply disappear to some central agency but rather be paid directly to those businesses deemed to have suffered abuse?

[Lord De Mauley]

My Lords, the noble Lord’s question is in line with comments from the BIS Select Committee, which said that the arguments on whether to introduce fines from inception are finely balanced. I think that that is fair, and the Government’s view is that financial penalties should be kept as a reserve power, as I have said. We consider that the appointment of the adjudicator is in itself important to the effectiveness of the groceries code. The adjudicator already has sanctions available, and large retailers will immediately be conscious that if there is evidence of significant non-compliance and the existing regime seems not to be sufficiently effective, there is the prospect of a swift introduction of financial penalties. As to the noble Lord’s last question, as the Treasury Whip I could not possibly say where the proceeds will go.