Groceries Code Adjudicator

Stuart Blair Donaldson Excerpts

Tuesday 17th November 2015 Westminster Hall

[Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate the hon. Member for York Outer (Julian Sturdy) on securing this debate on an issue that is important to many of my constituents and to the constituents of Members on both sides of the House.

I am sure all Members would agree that the Groceries Code Adjudicator is well intentioned but its powers do not go far enough. In particular, it is insufficiently responsive to a failing supply chain. Earlier this year, the Scottish Government’s Cabinet Secretary for Rural Affairs, Food and Environment, Richard Lochhead, wrote to the Secretary of State for Environment, Food and Rural Affairs, stating:

“I have long been pressing the UK Government to widen the Groceries Code Adjudicator’s remit and powers so that she can shine a spotlight on contracts between primary producers and processors, as well as processors and retailers.”

In conjunction with that, Mr Lochhead has continued to press the milk prices crisis with the adjudicator. There has been huge volatility in dairy prices over the past two years, and no fewer than 19 Scottish dairy farmers have gone out of business this year. Dairy is the most visible area in which the GCA’s remit does not go far enough. The GCA has no remit to investigate prices; it may investigate only the relationship between the largest supermarkets and their direct suppliers. The fact that the code extends only to retailers with a turnover of more than £1 billion and deals only with direct suppliers is unacceptably restrictive, as the vast majority of farmers supply the market through processors.

As few dairy farmers sell direct to supermarkets, consideration should be given to extending the scope of the GCA’s powers to provide a mechanism to tackle the problem. Dairy farmers who deal with large retailers often receive substantially less than the cost of production for their milk. Dairy producers cannot be expected to subsidise retailers in that way. It is not in the long-term interests of either our food security or our consumers to push dairy farmers out of business. That is why I echo the recommendation of the Environment, Food and Rural Affairs Committee’s report on dairy prices that the Government should give urgent consideration to how the GCA’s remit could be amended.

Expanding the role of the GCA would give it the powers that it should have, and indeed that many people already think it has. That is reinforced by the words of the adjudicator, Christine Tacon:

“I think very many farmers thought I was going to be there to get involved with price. I have been asked to get involved in the price of beef and milk and fleece. None of these can I get involved with: first, because I cannot get involved on price, and secondly they are very rarely direct suppliers themselves.”

That restrictive remit seems to be hampering the work of the GCA. Ms Tacon has also said:

“I continue to spend a great deal of my time explaining the remit of the GCA. This has hampered my ability to pursue important work that is within my remit…. The continued misrepresentation of my role is of great concern to me and I am keen to resolve this issue swiftly.”

I suggest that expanding the GCA’s remit would help to resolve that issue.

As has been mentioned, the GCA must have the power to initiate her own investigations, rather than only being able to act on complaints, as is currently the case, and she should be able to do so at any time. The GCA also needs to be given a role to look at the whole supply chain, rather than only being able to investigate direct supply contracts. That would finally bring the vast majority of farm produce into her remit. Finally, she should be able to investigate and report on the balance of pricing throughout the supply chain. That would bring transparency and help farmers and others in their negotiations with the retailers. Farmers across the UK are vital contributors to the rural economy and to the sustainability of our nation. They deserve a better deal and fairer pricing. I urge the Government to consider the points raised in this debate and broaden the remit of the Groceries Code Adjudicator.