What’s happening?
In a bid for efficiency, the government could merge the functions of the Groceries Code Adjudicator (GCA) with the Competition & Markets Authority.
What does the GCA do?
The role was established in 2013. The GCA acts as an independent regulator of the relationship between retailers and their direct suppliers, making sure they’re treated fairly and lawfully. It enforces the Groceries Supply Code of Practice.
For example, from 1 March 2022 Amazon became the 14th retailer to be bound by the Groceries Supply Code of Practice. The GCA has been working with Amazon to help them make the transition and has invited suppliers to contact the GCA if they have any concerns about how they’re being treated by Amazon.
Why would scrapping the role be a problem?
Power and market dominance in the food retail sector has become increasingly concentrated. And while this arguably allows supermarkets to take advantage of economies of scale to keep prices down – sometimes artificially low – it also means that suppliers could be forced into accepting unfair trading practices.
The GCA addresses unfair trading practices and power imbalances in the food retail sector. It’s needed now more than ever because – as the GCA’s own findings show – inflation has weakened the relationships between the UK’s retailers and their suppliers.
What’s the Food Ethics Council’s response?
Dan Crossley, executive director of the Food Ethics Council, said:
“Scrapping the Groceries Code Adjudicator role now would be a huge own-goal for the UK’s food retail sector. Over the years power has become highly concentrated in the hands of a few big supermarkets, with attempted mergers and acquisitions by the likes of Amazon having the potential to give some companies even more market dominance. We need the Groceries Code Adjudicator to call out and address unfair trading practices, protect the supermarket’s suppliers from abuse and help retailers become fairer in their trading practices.
“With rampant inflation putting even more pressure on the already tumultuous retailer-supplier relationship, now would be the worst time to end the Groceries Code Adjudicator role. We should be doing the opposite and instead consider expanding its remit so it can make meaningful interventions that make food fairer for everyone.”