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Fines for supermarkets that treat farmers badly a step closer say Farron & Cable

January 29, 2015 1:23 PM

TF ruralMeasures to grant the Groceries Code Adjudicator (GCA) powers to fine UK supermarkets have been laid in Parliament, Liberal Democrat Business Secretary Vince Cable has announced. This news has been welcomed by South Lakes MP and chair of the All Party Parliamentary Group on Hill Farming, Tim Farron, as a 'great win for farmers and suppliers'.

The Adjudicator will be able to impose penalties on large retailers of up to one per cent of a companies' annual UK turnover, dependant on the seriousness of the breach of the Code.

It comes despite Tory opposition to grant the watchdog the powers it needed to do its job. The GCA has published guidance on the principles that will be used to calculate the level of any fine. The Code imposes on the supermarkets an overarching principle of fair dealing with their direct suppliers, including farmers.

It includes specific provisions governing terms of supply, timing of payments, marketing and promotional costs, and payments as a condition of being a supplier. The Code does not govern issues relating to pricing.

These new measures will add to existing powers to issue supermarkets with recommendations as to their future conduct, and to 'name and shame' those that have breached the Code.

Tim has previously writing to Farming Minister George Eustice MP to ask the Government to activate those powers. The Groceries Code Adjudicator was first proposed by Tim when he was the Liberal Democrats' Defra spokesperson, and he made sure that the policy was included in the coalition agreement.

Tim said: "I have repeatedly called for the adjudicator to have its powers extended and to be able to fine. I have pressed on this behind the scenes over the last few months. Today's announcement is great news for farmers, suppliers and rural communities."

Liberal Democrat Business Secretary Vince Cable added: "The Groceries Code Adjudicator is a Liberal Democrat idea and was designed to make sure suppliers, such as farmers and small businesses, are given a fair deal by supermarket giants.

"Despite Tory opposition this important final step will give the GCA the power it needs to address the issues in the supply chain, between grocery retailers and their direct suppliers.

"I am pleased today to be giving the Adjudicator the final element in a set of powers that will give this new body all the tools it needs to succeed in this challenging and important role." 

The Groceries Code Adjudicator was created in 2013 to enforce the Groceries Supply Code of Practice that, since 2009, has governed the commercial relationships between the UK's ten largest supermarkets and their direct suppliers of food, drinks, and a range of household products.

These measures are subject to the successful completion of parliamentary process; including passage through the Joint Committee of Statutory Instrument and further debate in both the House of Commons and the House of Lords.

A copy of the statutory instrument can be found at http://www.legislation.gov.uk/uksi

A copy of the GCA guidance on the principles that will be used to calculate the level of any fine can be found at:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/226053/Consultation_introductory_text.pdf