Groceries Code Adjudicator Bill [Lords]

Mark Tami Excerpts

Tuesday 26th February 2013 Commons Chamber

[Philip Davies]

New clause 1 stands in my name and that of my hon. Friend the Member for Bury North (Mr Nuttall).

I do not want you to think, Mr Speaker, that my speech would be better suited to a debate on Second or Third Reading, but it is important that I give some context as to why new clauses 1, 2 and 3—which all stand in my name—are important.

I do not have any interest to declare, but I do have considerable experience that is relevant to the Bill. Before entering Parliament in 2005 I spent the previous 12 years working for Asda. I spent four years working in-store and eight years working at the head office in Leeds, so I have first-hand knowledge of how the supermarket industry works. To be perfectly honest, it works in a completely different way from the way in which people might be forgiven for thinking it works if they listened to previous debates on the matter. We have been given to believe that terrible, shocking, awful, nasty supermarkets care nothing about their suppliers, that their only role in life is to screw their suppliers into the ground and leave them destitute—bankrupt, if we are to believe previous debates—and that the only way to prevent that from happening is to have this ridiculous adjudicator, which is the Bill’s premise. That argument is complete and utter nonsense—that is not how it works at all.

[Mark Tami (Alyn and Deeside) (Lab)]

I think that I have raised this point with the hon. Gentleman in the past, but the supermarkets’ power means that they are able to tell suppliers, “Provide this product at this price or do two-for-one offers at your cost, or we will go somewhere else.” Does the hon. Gentleman not accept that that is an unacceptable power in some cases?

[Philip Davies]

I am afraid that the hon. Gentleman is highlighting the misconceptions. The Office of Fair Trading is already able to enforce a grocery code of practice. It is already in place. It is not being introduced by this Bill. The code of practice already exists under the auspices of the OFT. If the hon. Gentleman has any concerns about how supermarkets are operating with regard to their suppliers, he can take his complaint to the OFT and ask it to investigate it. The adjudicator is not supposed to introduce a new code of practice, although we fear that they might. The code of practice already exists. If the hon. Gentleman has evidence of supermarkets breaking the code of practice, I would be happy for him to come forward and tell me about it. If anybody has evidence of supermarkets breaking the code of practice, let us hear about it today and we can all decide what the best course of action is. However, there is no evidence that the code of practice is being breached.

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[Philip Davies]

My hon. Friend makes a good point. If he has a big problem with the middleman, so to speak, for example in the dairy industry, he should pursue his complaint with the middleman, rather than having a go at the supermarket.

The hon. Member for Alyn and Deeside (Mark Tami) made a point about special offers. There is a view that supermarkets have been forcing suppliers against their will to do special offers, such as buy one, get one free or buy three for two. Let me tell the House, as somebody who has worked in this environment, what happens in the real world, rather than in the invented world that people want to talk about.

My hon. Friend the Member for Fylde (Mark Menzies) is here and he will know what happens as well as I do because he worked for Asda at the same time as I did. He will recall that, before I left, Asda decided that it did not want to do special offers any more and that it would have no special offers in its stores. It did not want any buy one, get one frees or three for twos. It asked its suppliers instead to just sell it the product at an everyday low price and to put what they would have invested in a promotion into providing that price. It was not companies such as Asda that were forcing suppliers to do buy one, get one frees; suppliers were falling over themselves to do special offers in the supermarkets and to get their products in the promotional areas.

Some of those firms have massive marketing budgets. They have marketing budgets that supermarkets would love to have. They use that budget to do offers such as buy one get one free or three for the price of two. They are trying to persuade people who buy Daz for their washing, for example, to move to Persil. To persuade people to do so, they give them a buy-one-get-one-free offer.

[Mark Tami]

Will the hon. Gentleman give way?

[Philip Davies]

I will in a second, because it was the hon. Gentleman who started me off discussing this misconception in the first place, so I will happily let him come back in.

A special offer such as “Buy one, get one free” on Persil is intended to encourage people to buy Persil in the hope that by the time the special offer ends, they will stick to that brand. It is a way of promoting a brand, and it has absolutely nothing to do with the supermarket.

[Mark Tami]

The hon. Gentleman is talking about very large companies, but does he accept that some smaller companies are almost totally reliant on the supermarkets for their business, and whatever the supermarket says goes? Does he also accept that one thing that we have to recognise from the horsemeat scandal is that if we keep driving prices down, some suppliers will look to cut costs by whatever means they can in order to survive?

[Philip Davies]

I am grateful to the hon. Gentleman, because he seems to have indicated—I will take it as such—that he will support my new clause 1 or new clause 2. He gets to the nub of the point, although I suspect he has not even bothered to read the new clauses, because if he had he would not have led with his chin in the way that he just has.

I wish to make it clear at this point that, with your permission, Mr Speaker, I would prefer to press new clause 2 to a Division than new clause 1, but I will be guided by you later on that.

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[Philip Davies]

I have no doubt that the hon. Gentleman does not believe in the free market—that is why he sits on the Labour side of the House. I have no quibble with Opposition Members agreeing with this nonsensical Bill. He was elected to try and introduce this kind of interventionist nonsense. What I object to is Government Members believing in this kind of stuff. I have no quibble with him believing it.

[Mark Tami]

The hon. Gentleman has painted a picture, which no doubt he actually believes in, where the supermarkets are fair and always have everyone’s best interests at heart. What would they have to fear, regardless of the size of the companies that could take them through this process? According to him, they have never done, and will never do anything wrong.

[Philip Davies]

In a Westminster Hall debate I heard one of my hon. Friends, who is in favour of the Bill, make it abundantly clear that he thought the adjudicator would have nothing to do, and that it would, in effect, be a sinecure post. The adjudicator would just be there in case he was needed at some point. It is unnecessary, and I do not believe in creating unnecessary bureaucracies. They end up empire building. They start off small and targeted, but of course once they find out that they have nothing to do they find something to do, even when it is not necessary.