WIREDGOV

Government Announces Go-Ahead For Supermarket Enforcer

News Release issued by the COI News Distribution Service on 13 January 2010

Consumer minister Kevin Brennan has today announced that he has accepted the Competition Commission’s recommendation for a body to enforce the Groceries Supply Code of Practice (GSCOP).

The Code of Practice comes into force on 4 February 2010 and this will be quickly followed by a consultation, beginning in February, on how best to enforce the GSCOP, including who that body might be and the powers it could have.

Consumer minister Kevin Brennan said:

“The revised Grocery Supply Code of Practice (GSCOP) is a great improvement on the current regime. However, the power that large grocery retailers remain able to wield over their suppliers can still create pressures on small producers, especially in these difficult economic times, which ultimately may impact on consumers.

“Free and fair competition is the key to a healthy market and it is right that there should be an enforcement body to make sure that consumers are getting the best value for money.

“We do not anticipate a significant impact on consumer prices or workers resulting from the creation of an enforcement body. It is not a question of whether a body is needed, but exactly how that body will operate. The next step is to consult formally on its nature and role, to ensure that all interested parties can make their views heard and that informed decisions are made.”

Environment Secretary Hilary Benn said:

“The new ombudsman will help strike the right balance between farmers and food producers getting a fair deal, and supermarkets enabling consumers to get the high quality British food that they want, at an affordable price.”

Notes to Editors

1. The Competition Commission (CC) found that that large grocery retailers were passing on excessive risks and unexpected costs to their suppliers. The CC failed to obtain voluntary undertakings from retailers to set up a GSCOP Ombudsman. On 4 August 2009 the CC recommended that BIS take steps to set up, as soon as practicable, an ombudsman that can levy penalties on large grocery retailers for GSCOP non compliance. The letter is available at http://www.competition-commission.org.uk/inquiries/ref2006/grocery/pdf/gscop_2_bis_letter.pdf

2. On 12 January the Government also said that, following its public consultation, it had decided to revoke the Land Agreement Exclusion Order. The order currently allows certain land agreements to restrict grocery retailing, and the CC found that, in certain local areas, this could restrict competition.

3. The CC recommended in their 2008 report on UK groceries that the Government consider amending or revoking the Land Agreements Exclusion Order so that it no longer applied to certain agreements which restrict grocery retailing. This was on the grounds that the CC had found that, in highly concentrated markets, such agreements had an adverse effect on competition in the groceries sector.

4. BIS undertook a public consultation between at the end of last year on the future of the Order. The consultation document is available on the BIS website at http://www.berr.gov.uk/consultations/page52385.html

Please contact the Department for Business press office on 0207 215 3496 for more information.

Department for Business, Innovation & Skills

The Department for Business, Innovation and Skills (BIS) is building a dynamic and competitive UK economy by: creating the conditions for business success; promoting innovation, enterprise and science; and giving everyone the skills and opportunities to succeed. To achieve this it will foster world-class universities and promote an open global economy. BIS - Investing in our future.

Contacts:

BIS Press Office
NDS.BIS@coi.gsi.gov.uk