Groceries Code Adjudicator Bill [Lords]

Robert Smith Excerpts

Monday 19th November 2012 Commons Chamber

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

I greatly welcome this Bill and I hope it makes good progress through the House. The Minister emphasises that it will help suppliers, but it is important to get across the fact that it will also help consumers by ensuring that a range of suppliers stays in the market and that there is variety and good security of supply.

[Jo Swinson]

My hon. Friend is absolutely right. We are introducing the adjudicator because of the benefits it will bring in dealing with potential issues of consumer detriment, as identified in the Competition Commission report.

I believe that our large supermarkets can be a very good thing for consumers, for employment and for our economy. In the vast majority of cases, they treat their suppliers lawfully and fairly. Unfortunately, as the House will be aware, the Competition Commission’s 2008 report on the supply of groceries showed that in some cases large supermarkets were transferring excessive risks and costs to their suppliers. That included practices such as the retrospective varying of supply agreements to force suppliers to take on unexpected extra costs, which is why the Groceries (Supply Chain Practices) Market Investigation Order 2009 came into force in 2010. The order contains the groceries supply code of practice and requires the 10 largest retailers with an annual turnover of over £1 billion to incorporate the code in all their supply agreements. The code sets out a general principle that retailers must treat their suppliers lawfully and fairly and also contains more specific requirements on how retailers should deal with their suppliers.