The Groceries Code Adjudicator has received Royal Assent, creating the UK’s first independent adjudicator to oversee the relationship between large supermarkets and their suppliers.
The adjudicator will aim to ensure supermarkets abide by the Groceries Supply Code of Practice and treat their suppliers fairly and lawfully.
“This will give suppliers the stability to help them grow, innovate and compete in the market,” said competition minister Jo Swinson.
“I am sure that the adjudicator will make strides towards delivering fairer food supply chains and stronger growth in the industry.”
The code regulates the relationship between the 10 largest supermarkets – with an annual turnover of £1bn or more – and their direct suppliers. It was established by the Competition Commission in 2010 after its market investigation identified unfair practices.
The adjudicator has the power to arbitrate disputes between retailers and suppliers, investigate confidential complaints from suppliers, and fine or ‘name and shame’ retailers which break the rules.
Association of Convenience Stores (ACS) chief executive James Lowman has said small retailers would benefit because “everyone suffers when big stores bully suppliers”.
“In the case of small retailers the effect can be the supplier transferring the costs of unsustainable agreements with big customers onto smaller ones,” he added. “This could be through increased prices, reduced promotional support or simply worsening service standards.”
The Act will come into force in June.