Supermarkets will soon face fines of up to 1% of their annual turnover for treating their suppliers unfairly.
Measures that will grant the Groceries Code Adjudicator (GCA) the power to fine UK supermarket have been laid in Parliament.
MPs on the Environment, Food and Rural Affairs Committee recently urged the government to activate the GCA’s power to fine retailers in breach of the Groceries Code.
The new measures will sit alongside existing powers to issue supermarkets with recommendations as to their future conduct, and to ‘name and shame’ those that have breached the code.
The code imposes on supermarkets an over-arching principle of fair dealing with their direct suppliers.
Business secretary Vince Cable said: ”This important step will give the Groceries Code Adjudicator the power it needs to address the most serious disputes between the large supermarkets and their direct suppliers.
“I created the Groceries Code Adjudicator to ensure a fair deal for those who supply goods to supermarkets such as farmers and small businesses.”