A new Code of Practice for the 10 grocery retailers with annual turnovers of more than a £1bn comes into force this month.

The Code, intended to protect suppliers from the multiples' abuse of their buying power, gives suppliers the right to an independent arbitrator, with initial costs being met by the retailer. It also protects suppliers from being asked for unexpected retrospective payments, or being asked to cover the costs of shrinkage, and demands that more dealings between the parties must be put in writing.

Independent retailers believe the Code will help narrow the supermarkets' price advantage, but say an ombudsman, as recommended by the Competition Commission, must have sufficient powers to enforce it.

ACS chief executive James Lowman said: "An ombudsman is a vital step towards creating a fairer grocery market. Ministers will be under immense pressure to weaken the powers of the ombudsman, but they must stick faithfully to the recommendations of the Competition Commission findings and ensure it is independent, has proactive powers to investigate compliance and can exact meaningful financial penalties where necessary."

However, a spokesman for the British Retail Consortium said: "Politicians of all parties need to recognise that these strong and wide-ranging new rules make an ombudsman unnecessary."

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