Fines for supermarkets who treat suppliers badly announces Cable

Measures to grant the Groceries Code Adjudicator (GCA) powers to fine UK supermarkets have been laid in Parliament, Liberal Democrat Business Secretary Vince Cable has announced. The Adjudicator will be able to impose penalties on large retailers of up to one per cent of a companies’ annual UK turnover, dependant on the seriousness of the breach of the Code. 

It comes despite Tory opposition to grant the watchdog the powers it needed to do its job. The GCA has published guidance on the principles that will be used to calculate the level of any fine. The Code imposes on the supermarkets an overarching principle of fair dealing with their direct suppliers, including farmers.

It includes specific provisions governing terms of supply, timing of payments, marketing and promotional costs, and payments as a condition of being a supplier. The Code does not govern issues relating to pricing. These new measures will add to existing powers to issue supermarkets with recommendations as to their future conduct, and to ‘name and shame’ those that have breached the Code.

Liberal Democrat Business Secretary Vince Cable said: “The Groceries Code Adjudicator is a Liberal Democrat idea and was designed to make sure suppliers, such as farmers and small businesses, are given a fair deal by supermarket giants. Despite Tory opposition this important final step will give the GCA the power it needs to address the issues in the supply chain, between grocery retailers and their direct suppliers." 

"I am pleased today to be giving the Adjudicator the final element in a set of powers that will give this new body all the tools it needs to succeed in this challenging and important role." Dr Cable added