Groceries Code Adjudicator

Rebecca Long Bailey Excerpts

Tuesday 25th February 2025 Westminster Hall

[Rebecca Long Bailey (Salford) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Twigg. I thank the hon. Member for Brecon, Radnor and Cwm Tawe (David Chadwick) for his fantastic speech. I draw the House’s attention to my role as the chair of the Bakers, Food and Allied Workers Union parliamentary group, which I thank for its helpful briefing.

As we have heard, the UK grocery sector is shaped to a large extent by the huge concentration of power in the hands of the major supermarket retailers, which are competing to achieve the lowest prices and the biggest profit margins on key goods, but there is a limit to suppliers’ ability to keep prices down through productivity, automation or cheaper input costs. The story that the hon. Member told was about the pressures faced by farmers, but there is also often a relentless downwards pressure on labour costs, which has led to attacks on the pay and conditions of workers employed across supply chains. This race to the bottom has resulted in a proliferation of low-paid and casualised jobs, and the growing exploitation of agency and migrant workers.

Surveys of food workers conducted by the Bakers, Food and Allied Workers Union show that in-work poverty has spiralled in recent years, with food workers worrying about feeding themselves and their families. At the same time, staggeringly, the supermarket chains have continued to report huge profits and dividend payouts to their shareholders. We have also seen rocket and feather pricing: because of wholesale cost rises, the price of key items is increased excessively, but when those wholesale costs come down, the price on the shelf does not come down in tandem.

The role of the Groceries Code Adjudicator is therefore an important one. The GCA has helped to tackle some of the most abusive practices, such as unreasonable short-notice terminations of contracts, abusive promotional practices and other failures of compliance with the code. But sadly, as it stands, the GCA cannot intervene to protect suppliers or consumers when it comes to supermarket pricing. This puts the short-term interests of shareholders above the wider public interest.

In this context, I have a few suggestions for the Minister to consider. First, the existing powers of the GCA should be incorporated within the remit of a new groceries regulatory authority, with a wider responsibility to protect the sustainability of UK suppliers and the interests of consumers. The new regulator should be given the power to introduce price floors and ceilings to protect suppliers and consumers from aggressive pricing tactics and exploitative price-gouging. Secondly, a sectoral collective bargaining framework for workers employed in the UK food supply chain should be restored and extended, to ensure decent pay and security. Finally, a statutory right to food should be introduced in UK legislation, to protect consumers and address the root causes of food insecurity.

I will finish by drawing Members’ attention to another matter of concern, which is the impact of private equity acquisitions on UK supermarket chains and food manufacturers. As FoodChain magazine recently put it,

“Under private equity ownership, the strategic focus often shifts towards short-term profitability, which can lead to decisions that are not always aligned with long-term market positioning. For example, cost-cutting measures may involve reducing staff, limiting store refurbishments, and cutting back on product variety.”

There are a couple of examples of major supermarket chains engaging in those practices recently, and many fear that it is just the tip of the iceberg. To that end, I would also be grateful if the Minister considered launching a joint investigation, across the Department for Environment, Food and Rural Affairs, the Department for Business and Trade and the Competition and Markets Authority, about the impact of private equity acquisitions of UK grocery retailers on the security and sustainability of the UK food supply chain.