Saving the Supermarkets Watchdog
In 2013, on the back of thousands of us raising our voices, the Government created the Supermarkets Watchdog (officially called the Groceries Code Adjudicator [GCA])– an independent body to ensure that supermarkets treat their suppliers fairly and legally.
The watchdog now covers 14 supermarkets and grocery retailers, the most recent retailer to be brought under its remit was Amazon in March 2022. Every year suppliers are surveyed on how they have been treated by supermarkets, and every year (except for this year when there was an increase) the number of suppliers reporting bad treatment has reduced.
But now the supermarkets watchdog is under threat. The Government is considering scrapping the watchdog and merging its functions with a different Government body, the Competitions and Markets Authority. This would be catastrophic and would result return to supermarkets treating their suppliers unfairly.
Before the Government makes any decisions, they want to know what different groups think. When meeting with civil servants, they said they specifically wanted to hear from consumers. We expect supermarkets and retailers to be in favour of the merge because they know it will make it easier for them to return to profitable, unfair treatment of their suppliers. We need to show there is a lot of support for keeping the watchdog independent. If enough of us raise our voices, we have a good chance of stopping this from happening.
Government consultations can be confusing, and we don’t expect you to know all the answers, so we’ve put together a guide (below) for filling out your response. There’s 9 questions to answer and we’ve provided suggestions on what you could say for each question.
This is just to be taken as a guide, you do not need to include all the information if you feel that is not applicable to you. Please add in extra information if you have it. Please write your response in your own words and do not copy and paste because we want the responses to be counted individually.
Before you start:
You will need to download the consultation response form (it will download as a word document): https://www.gov.uk/government/consultations/groceries-code-adjudicator-statutory-review-2019-to-2022
Definitions:
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This is the supermarkets watchdog, it is the body that oversees the code (below)
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These are the rules that the GCA enforces. It is a legally binding text that sets out how supermarkets (and other food retailers) must treat their suppliers. As well as showing how to treat suppliers fairly, it also covers what behaviours are banned.
“A Retailer must at all times deal with its Suppliers fairly and lawfully. Fair and lawful dealing will be understood as requiring the Retailer to conduct its trading relationships with Suppliers in good faith, without distinction between formal or informal arrangements, without duress and in recognition of the Suppliers’ need for certainty as regards the risks and costs of trading, particularly in relation to production, delivery and payment issues.” https://www.gov.uk/government/publications/groceries-supply-code-of-practice/groceries-supply-code-of-practice
Step by step guide: filling out the consultation
About You
Name: your name
Organisation: (leave this blank if you are responding as an individual) the name of your group, say how many people’s views you represent and/or if you campaigned for the creation of the supermarkets watchdog before 2013
Address: This is just to confirm you are who you say you are. If you have an address where your organisation is based then use this, if you do not have a location then please provide the home address of the person who is responding to the consultation on behalf of your group.
Respondent type: Individual OR Other – consumer group
Part 1: Questions for all relevant parties – Everyone responding to the consultation has to fill in this section
1. Have you engaged with the GCA?
b) No
Ignore questions 2-4. These are only relevant to respondents who said yes to q1.
5. What do you believe has been the impact of the GCA on the groceries market?
Suggested points to include in your answer:
· Supermarkets have been fairer to suppliers
· Reports of abusive purchasing practices dropped massively
Graph showing the number of suppliers who reported experiencing bad treatment from supermarkets from 2013-2021. Source: GCA annual review
· Supermarkets have been held to account for breaking the code
o Tesco – GCA forced Tesco to pay suppliers what they were owed & Tesco had to make improvements based on recommendations from GCA to ensure these issues wouldn’t happen again https://www.theguardian.com/business/2016/jan/25/tesco-censured-supermarket-watchdog-suppliers-groceries-code-adjudicator
o Morrison – were requiring suppliers to pay lump sums that weren’t in their contracts, GCA forced Morrisons to tell their suppliers that these requests for money were illegal and so not necessary (according to the code) https://www.foodmanufacture.co.uk/Article/2016/06/24/Morrisons-sorry-for-breaching-groceries-code
o Co-op https://farming.co.uk/news/gca-recommendations-following-co-op-investigation-welcomed
· Good relationships between supermarkets and suppliers is necessary to ensure that there is food on the shelves for us to buy.
6. How effective do you consider the GCA has been in exercising its powers: For this question we are only providing a response to point b) because that is information which the public can find and could know. The evidence is the same as the previous question.
a) in providing arbitration?
b) in conducting investigations and undertaking enforcement activity?
c) in providing advice, guidance and recommendations?
Suggested points to include in your answer:
· Reports of abusive purchasing practices dropped massively (see graph in question 5)
· Supermarkets have been held to account for breaking the code
o Tesco – GCA forced Tesco to pay suppliers what they were owed & Tesco had to make improvements based on recommendations from GCA to ensure these issues wouldn’t happen again https://www.theguardian.com/business/2016/jan/25/tesco-censured-supermarket-watchdog-suppliers-groceries-code-adjudicator
o Morrison – were requiring suppliers to pay lump sums that weren’t in their contracts, GCA forced Morrisons to tell their suppliers that these requests for money were illegal and so not necessary (according to the code) https://www.foodmanufacture.co.uk/Article/2016/06/24/Morrisons-sorry-for-breaching-groceries-code
o Co-op https://farming.co.uk/news/gca-recommendations-following-co-op-investigation-welcomed
7. Do you think the GCA has been effective in enforcing the Code?
a) Yes
Suggested points to include in your answer:
· GCA reporting shows that suppliers are being treated better year on year since the GCA’s creation (see graph in question 5)
· GCA supplier survey regularly has over 2,000 respondents. This shows that the suppliers trust the GCA
· GCA oversees the implementation of the Code (definition at the top of the blog) – if the GCA didn’t exist and work effectively, then supermarkets wouldn’t be held to the Code
8. Do you think there are advantages of transferring the GCA functions to the Competition and Markets Authority (“CMA”) to increase efficiency, effectiveness and economy in exercise of public functions?
Suggested points to include in your answer:
We believe there are no advantages of transferring the GCA functions to the CMA:
Efficiency – efficiency will decrease because there will be a loss of expertise. It will take staff longer to get up to speed with the issues
Effectiveness – effectiveness will decrease because suppliers will no longer come forwards with complaints because the CMA is less confidential than the GCA. Good relationships between supermarkets and suppliers is necessary to ensure that there is food on the shelves for us to buy.
Economy – This regulator is not funded by the taxpayer. It is funded by retailers who previously have been found guilty of treating their suppliers in an unfair manner. A dedicated specific regulator is necessary for the food sector because we are all dependent on food.
9. Do you think there are disadvantages of transferring the GCA functions to the CMA and do you have thoughts on how these might be addressed?
Suggested points to include in your answer:
We believe there are significant disadvantages of transferring the GCA functions to the CMA:
1) Lose the independence – suppliers trust the GCA because it is separate from the Government department (BEIS) which fines supermarkets for breaking the Code.
2) Confidentiality - the GCA works because it allows suppliers to anonymously report abuses by supermarkets, which means that supermarkets can’t find out who reported them and punish the supplier by stopping using them. Merging the functions with the CMA puts this confidentiality at risk because the CMA can be subject to a Freedom of Information (FOI) request (the right to ask to see recorded information held by public bodies/authorities)
3) It would no longer be the sole focus of the body so could reduce effectiveness
4) Loosing expertise of the office of the GCA. Overtime this regulator has built up a very specialist knowledge base on how supermarkets treat and interact with their suppliers and what is fair or breaches the Code.
10. Do you there would be advantages of transferring to another public body. If so, could you explain which one and why and whether there are any disadvantages?
Suggested points to include in your answer:
No advantages, only disadvantages
· The functions of the regulator cannot be transferred to another body.
· The GCA is designed in a specific way so it can be effective for this sector, including its independence.
· No other public body is set up in the same way.
· Before the GCA and the Code existed, suppliers could have taken supermarkets to court if they breached contracts but they never did because they feared repercussion (such as losing the contracts altogether) from the supermarkets.
11. Do you think it is still necessary to have an Adjudicator to enforce the Code? This is a really crucial part of the consultation, we expect the supermarkets will say no because then it will make it easier for them to make larger profits by treating their suppliers badly.
Suggested points to include in your answer:
Yes, it is absolutely necessary to have an Adjudicator to enforce the Code
· The harmful and unfair practises of supermarkets which are banned by the Code are highly profitable and will return if there isn’t a regulator to deter them.
· Even with the GCA, we are seeing a rise in suppliers reporting abusive practises by supermarkets. In 2022 the number of suppliers reporting abusive purchasing practises has increased on 2021.
· Now is a critical time for the GCA to exist with the increase of raw materials and energy, impacting the cost of food during the cost of living crisis.
· This regulator ensures that negotiations between supermarkets and suppliers happen fairly.
Part 2 – 5 Ignore, these questions are not for consumers.
Part 6 – Questions for Consumers
This question isn’t clearly worded, we don’t know if they are asking about quality and choice before and after the GCA was set up (2013) or if they are talking about this specific period of review (2019-22). We don’t feel confident suggesting responses for bullets a and b however if you have noticed differences you are welcome to write your observations. Please note that the GCA has nothing to do with the current price increases we are seeing in response to the cost of living crisis or the supply chain issues that led to empty supermarket shelves during the Covid-19 pandemic.
1. What do you believe has been the impact of the GCA on consumers in relation to:
a) the quality of groceries supplied by the retailers.
b) the choice of groceries supplied by the retailers.
c) any other impact or effects?
Suggested points to include in your answer:
· We/I feel discomfort buying food which has not benefited all who helped to grow, harvest, process the food.
· GCA gives us confidence that the people who grow and make our food are treated better because if suppliers are being treated fairly and paid on time this then enables better treatment and pay of the workers, farmers and growers and small businesses.
· The yearly reports mean we can see which supermarkets are better and this can help with choosing where to shop
· We are in support of regulator which ensures there is fairness in relationship between supermarkets & their suppliers
· We want to see regulator retained as independent and focused (not subsumed into another public body)
That’s it! You’re finished. Thank you so much for taking time out of your day to respond to the consultation. Please email your form to GCAreview@beis.gov.uk.
One final thing (this is quick we promise), we’d love to know how many people have responded to the consultation, please can you email campaign@transform-trade.org letting us know if you’ve submitted a response and which group (if you’re comfortable saying) you represent.
To find out more information about the Groceries Code Adjudicator:
The 2022 annual report of the Groceries Code Adjudicator is here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/995915/Groceries_Code_Adjudicator_Annual_Report_and_Accounts_2020-2021.pdf (pages 34-40 are the results of the supplier survey)
A joint briefing on the need to keep the GCA independent is here: https://www.transform-trade.org/policy-resources/briefing-the-groceries-code-adjudicator-review