When the CC (Competition Commission) investigated the grocery market and proposed the twin remedies of the GSCOP (Grocery Supply Code of Practice) and the GCA, it did so for the benefit of consumers.
It found that the transfer of excessive risk and unexpected costs to suppliers in that market ultimately led to a reduction in choice and availability. The GCA plays a vital role in calling out and addressing unfair trading practices in the grocery supply chain.
Of course, nothing should stand still and the NFU recognises the importance of regular reviews to ensure the GCA’s role is performing well.
However, we have concerns with the proposals to either transfer the GCA functions to within the CMA (Competition Market Authority) or remove the role of the GCA entirely.
Read more about the review by visiting: NFUonline | Groceries Code Adjudicator statutory review – have your say
Groceries Code Adjudicator statutory review – NFU response
These are challenging times for businesses within the supply chain and for consumers. The country is facing the highest levels of inflation for 40 years and as a result retail and supply relationships are being put to the test.
While no doubt some will have suggested that consumers could benefit should retailers be allowed to abuse their market power, the exhaustive investigations of the market by the CC in the 2000s suggest otherwise.
Fairness across the supply chain
Indeed, in recent months we have heard increased reports from members experiencing unfair trading practices. This was also further reflected in the 2022 GCA annual survey results.
For the first time since the survey began supply relationships have reportedly gone backwards with disputes over CPIs (Cost Price Increases) at the centre of these challenges.
So now more than ever, we can’t afford for the role of the GCA to be diluted or worst-case scenario removed, when relationships between retailers and suppliers are under huge strain and the major multiples are launching their biggest ever price campaigns.
Improving relationships between retailers and suppliers
The GCA oversees the GSCOP, a code of practice which details how retailers are expected to manage their direct supplier relationships fairly and lawfully.
The NFU lobbied hard for the establishment of the adjudicator role, securing the support of all major political parties ahead of the 2010 General Election and we strongly support the vital work it does in regulating and improving trading relationships between suppliers and retailers.
GSCOP, actively policed by the GCA, has been a huge success changing the culture and behaviour of the top 14 retailers for the better.
When the first GCA survey ran in 2014, 79% of suppliers said they had experienced a code-related issue. In this year’s survey, that figure has fallen to 53%. The benefits of an adjudicator for the last 12 years is clear.
Diluting power, effectiveness and compliance
The success of the GCA has been thanks to its active interpretation of the GSCOP and hands on approach with retailers to ensure the code is not breached. Merging the GCA into the CMA would dilute the power and effectiveness of policing the industry and its compliance with GSCOP.
For more information on the consultation visit: NFUonline | Groceries Code Adjudicator statutory review – have your say