BRC criticises go ahead for supermarket ombudsman

The announcment follows the Competition Commission’s recommendation for a grocery sector body.

The plans have been criticised by the British Retail Consortium, which says it will add millions onto customers’ bills.

The BRC says the “costly new bureaucracy” is the only example of an ombudsman set up in favour of corporations over consumers.

BRC director general Stephen Robertson, adds: “This would tip the balance of negotiating power in favour of multi-national food manufacturers allowing them to drive up the prices customers pay. It’s disappointing that the Government has decided to pursue this despite the lack of evidence that it is needed.

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

Consumer minister Kevin Brennan says: “The revised 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. “

The government says the enforcement body would not have a “significant impact” on consumer prices but will “strike the right balance between farmers and food producers getting a fair deal” and supermarkets offering consumers quality food and affordable prices.

Following its investigation the Competition Commission found that that large grocery retailers were passing on excessive risks and unexpected costs to their suppliers and recommended a body be set up after supermarkets rejected voluntary measures.