Groceries Code Adjudicator

Neil Parish Excerpts

Tuesday 17th November 2015 Westminster Hall

[Neil Parish (Tiverton and Honiton) (Con)]

It is great to serve under your chairmanship, Mr Gray. I thank my hon. Friend the Member for York Outer (Julian Sturdy) for securing the debate—in fact, he could be considered a young farmer in this day and age. It is great to see him here fighting the corner for agriculture as well as for his constituency. It is good to follow the hon. Member for Strangford (Jim Shannon). Northern Ireland has particular problems because it needs to export much of its food. All products—dairy, beef, lamb and poultry—are under pressure, so this debate is timely. I will not go into the history of the adjudicator as my hon. Friend the Member for York Outer did that very well.

I am unashamedly going to make a speech that is pro-farming and pro-food production. We produce some of the best food in the world with some of the highest welfare standards, but that often adds cost to the food we produce. We have massive retailers, which are good for consumers. They can have a good war with each other and drive prices down, but as they drive the prices down, the suspicion is—it is not always the case—that the farmer and the processor pay for those low prices in the shop. If Tesco has a price war, the price comes down; I just wonder, for Wiseman or whoever supplies Tesco, whether the farmers are getting a good price from the Tesco direct milk contract. Are the processors then being squeezed? Are the other parts of that milk contract—cheese, butter and yoghurt—then being affected? All those things are appropriate and we need to look into them.

We want to produce more and more food in this country. We are becoming less self-sufficient every year, but we should be more self-sufficient every year. I have every faith in the Minister to ensure that we are more self-sufficient in food. The only way that will happen is if the farmer and the producer are paid a full price. The Groceries Code Adjudicator needs to be able to go into a retailer, whoever it might be—a bit like a spot check—and check that it is not using unfair practices to keep the commodity price or the price that is paid to the producer down. It could be milk, beef, lamb or perishable products. With perishable vegetables, the farmer or the grower is even more vulnerable because there is no way of storing much of that produce. Often the large retailers know that and they will drive the price down until it is uneconomic to produce.

The Groceries Code Adjudicator has powers. She appears before the Select Committee next month, so we will be able to put these questions to her directly. Five members of the Select Committee are here this afternoon, which shows the importance we attach to this subject. Is the Groceries Code Adjudicator using her powers sufficiently? Is she resourced enough? I echo my hon. Friend the Member for York Outer in saying that I do not usually come to Westminster Hall to demand more bureaucracy and more money, but if we are to take on these massive retailers, which have billions of pounds-worth of trade, we need someone who is resourced enough to be able to go in and stand up to them.

Few processors are feeding milk, beef, lamb and poultry into Tesco, Sainsbury’s and Morrisons, or whoever it might be, so if there is a complaint, the retailer knows very well where it has come from. Suppliers are therefore not likely to make a complaint. Whistleblowers and people with a real complaint must be able to come forward and must be protected. If the big retailers are using their muscle unfairly, the Groceries Code Adjudicator should have the power to come down on them in an even heavier fashion, because 1% of the turnover of Tesco or Sainsbury’s is quite a fine. Such a fine would send a message to the rest of the retailers that they need to behave properly.

[Rebecca Pow]

Will my hon. Friend give way?

[Rebecca Pow]

We have heard much about the 25-year plan for the future of great British food and farming, not just for Taunton Deane, where I come from, but for the whole of Britain. Is it not important that we give the Groceries Code Adjudicator teeth, so that she can be part of that 25-year plan and help to enable everything that we want for our home-grown food?

[Neil Parish]

I could not agree more. Greater production in this country would mean that we did not have to import so much food. That would be good for our balance of payments, and it would be good not only for farmers but for our processing industry—all this can help to build the industry. We are therefore looking forward to the Minister proposing greater powers and more resources for the Groceries Code Adjudicator so that she can look into more of these large retailers to ensure that the farmer, the grower and the processor get a fair deal.

--- Later in debate ---

[The Minister for Small Business, Industry and Enterprise (Anna Soubry)]

It is, as ever, a pleasure to serve under your chairmanship, Mr Gray. I sat through some of the previous debate and was looking forward to this one on the basis that my job would not be as difficult as that of the Minister in that one. I fear that I was mistaken. As you have heard, Mr Gray, everybody has ganged up on me. [Hon. Members: “Aww.”] I am not complaining particularly, because I think I have robust rebuttals to some of what has been said.

Given that, as ever, I have 10 minutes, the usual rules will apply. My hon. Friend—he is my hon. Friend—the Member for Strangford (Jim Shannon) will know my rules, which are that if I do not answer any questions or points raised by hon. Members from whatever party, they will of course receive an answer in a letter. It is always good to say that, because I can simply put off the more difficult ones to another time by putting the answers in a letter.

Being serious, and with great respect to everyone who has spoken—particularly my hon. Friend the Member for York Outer (Julian Sturdy), whom I congratulate on securing this debate—I think that there are some fundamental misunderstandings about the Groceries Code Adjudicator. I will be even more controversial, and a little churlish, by saying that I am sure that the adjudicator is looking forward to appearing before my hon. Friend the Member for Tiverton and Honiton (Neil Parish) and his Committee. Clearly, nobody else here has met Christine Tacon. I have had the great pleasure of meeting her. She is a lady who takes no prisoners, and she is forthright not only in her views but in defence of the great work that she does. She is a formidable player, and in her we have an excellent first adjudicator.

I point out the following facts. The Groceries Code Adjudicator and her team are funded wholly by a levy on the 10 designated retailers, as outlined by my hon. Friend the Member for York Outer. The levy for 2015-16 has been set at £1.1 million, but the important point is this: the adjudicator decides for herself what her resource requirements will be for each year, based on her assessment of forthcoming work. They are approved by the Department for Business, Innovation and Skills, and then the amount is levied on the retailers. She is very much in charge.

I was looking at the Groceries Code Adjudicator website only today. I noted that in her report published today on her work over the last three months, she says, for example, that she has just appointed a new compliance officer. I urge hon. Members to read her three-monthly report to see the great advances that she is making. There is also scope to bring in additional resource if required, for example to help with investigation work. The adjudicator is satisfied that she has adequate resources and with the process for agreeing those resources with BIS. She has made that clear. It is up to her: if she is not satisfied, or thinks that she does not have enough, she can say so. If we agree, and there is no reason why we would not, she can increase the levy on those supermarkets. She has those powers.

The adjudicator also has powers to initiate her own investigations where she has reasonable grounds to suspect a breach of the code. That can be based on, but is not restricted to, information from direct and indirect suppliers, whistleblowers and the public domain. I argue that despite the complaints made by some, she has the ability to take complaints from other sources. In addition, it is clear from the Groceries Code Adjudicator Act 2013 and the guidance that the investigation threshold is determined by the adjudicator herself, which means she can be proactive in her approach.

[Neil Parish]

The point I was making was not so much about whether the adjudicator is able to take these complaints but that those who are making the complaints are too identifiable by the big retailers and therefore are not prepared to come forward.

[Anna Soubry]

I have a rebuttal for that somewhere, because I am told that regarding whistleblowers—the clue is in the title, I suggest—the adjudicator has a statutory duty to protect confidentiality. That addresses the fear factor among suppliers. Also, the National Farmers Union has a scheme that allows suppliers to make anonymous reports of code breaches via an online form on its own website. The NFU is exactly the type of third party that can take up a complaint on behalf of somebody in the manner that my hon. Friend would like. I thank my officials for that information.