Groceries Code Adjudicator statutory review – NFU response

First published: 12 October 2022

A close up picture of hands pushing a supermarket trolley

The GCA (Groceries Code Adjudicator) role is being reviewed by BEIS (the Department of Business, Energy and Industrial Strategy). We have submitted our response. 

The GCA is the UK’s first independent adjudicator to oversee the relationship between supermarkets and their suppliers.

Established in 2013, its role is to make sure that retailers treat their direct suppliers lawfully and fairly by investigating suspected breaches of the Groceries Supply Code of Practice (GSCOP) and arbitrating in disputes.

The government is required to review the role of the GCA every three years.

“The GCA is incredibly valuable to the food supply chain, holding retailers to account and allowing farmers and growers to highlight breaches of the Groceries Supply Code of Practice without fear of repercussion.”

NFU chief food business adviser Amy Fry

12 October 2022

NFU Director General Terry Jones comments

During the period under review, the GCA (Groceries Code Adjudicator) has been incredibly valuable to the food supply chain in continuing to hold retailers to account and allowing farmers and growers to highlight breaches of the GSCOP (Groceries Supply Code of Practice) without fear of repercussion.

Our response recognises this but also where improvements can be made to improve the effectiveness of the GCA’s role including better emphasis on ensuring confidentiality throughout the process.

In our submission, we also highlight that proposals to transfer the GCA’s functions into the CMA (Competition Market Authority) or removing the GCA altogether, would have hugely damaging impacts on the groceries sector, as the effectiveness of the policing of GSCOP could be diluted with the proactive and focussed approach no longer a priority among all other competition issues.

Against a challenging economic backdrop with rising inflation, supply chain relationships are under pressure, which places even more importance on the GSCOP. To dilute or weaken the role of the GCA puts both suppliers and shoppers at risk but would also erode our national food resilience at a time when the sector is highly vulnerable.

11 October 2022

NFU submits response to GCA Review

It is our view the GCA has effectively enforced the code during the period in review. However, improvements need to be made to increase awareness of the GCA amongst suppliers to address the culture of fear and business reticence which still prevents suppliers from reporting issues to the GCA.

The NFU is strongly of the view that transferring the GCA’s functions into another public body such as the CMA (Competition Market Authority) or removing the GCA altogether, would have hugely damaging impacts on the groceries sector.

Continuing improvement to trading behaviour

Since its creation in 2013 the GCA has continued to improve the trading behaviour of the regulated retailers, evidenced by the fact that suppliers experiencing any code-related issues has decreased year on year from 2014–2021.

Against a challenging economic backdrop with rising inflation, supply chain relationships are under pressure which places even more importance on the Groceries Supply Code of Practice (GSCOP). To dilute or weaken the role of the adjudicator primarily puts both consumers and suppliers at risk but it would also erode our national food resilience at a time the sector is highly vulnerable.

Strategic importance of domestic food production

Government has recognised the strategic importance of domestic food production and our food resilience and has instigated initiatives to strengthen producers negotiating position in the supply chain. It would be counterproductive for another arm of government to undermine this effort and weaken producers and suppliers’ position.

27 July 2022

BEIS launches consultation into the effectiveness of the GCA

The government is conducting its statutory review of the GCA between 2019 and 2022.

The consultation seeks views and evidence which will allow the government to make an assessment of the GCA’s performance against measures set out in the GCA Act. These include:

  • How the GCA’s powers have been exercised
  • How effective the GCA has been in enforcing the Code
  • Whether to amend or replace the permitted financial penalty powers
  • Whether there is a need to set out guidance for the GCA to consider when deciding to investigate a breach

The consultation closes on 11 October 2022.

Our concerns

In addition to the standard considerations, the government has included questions around the GCA’s role and whether there might be gains in efficiency and effectiveness in transferring the GCA functions to the Competitions Market Authority (CMA).

We have concerns around these questions and the potential removal of the GCA.

We lobbied hard for the establishment of the adjudicator role and we strongly support the vital work it does in improving trading relationships between suppliers and retailers.

At a time where farmers and growers are facing unprecedented levels of inflation and supply chain challenges the GCA’s role is more vital than ever.

Feed into our response

We will be submitting member views into the review and would like to hear from you about how effective the GCA has been in exercising its powers to regulate retailer buying behaviour.

Any feedback we get from members will remain confidential and will only be used to shape the NFU submission. No members will be identified in our response.

For more information, or to feed into our response, please email us at: [email protected]

You can also submit your own response to the consultation at: GOV.UK | Groceries Code Adjudicator: statutory review, 2019 to 2022

More information can be read in this member briefing: Groceries Code Adjudicator statutory review, 2019 to 2022

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Summary

  • Read NFU Director General Terry Jones’ comment 
  • The NFU believes transferring the GCA or removing it would have hugely damaging impacts on the groceries sector. 
  • The government is required to review the role of the GCA every three years.
  • The NFU expressed concern about the potential removal of the role.
  • The NFU was influential in the establishment of the adjudicator role and we strongly support the vital work it does in improving trading relationships between suppliers and retailers.