The creation of the Grocery Code Adjudicator (GCA) is an overdue step towards a fairer and more competitive market, say small store representatives.

The watchdog, announced earlier this month, will investigate allegations of abuse of buying power by supermarkets, based on evidence provided anonymously by suppliers and other businesses. Funded by the retail giants themselves, it will be able to name and shame supermarkets which make unreasonable demands on suppliers, but will not initially have the power to fine them.

Association of Convenience Stores chief executive James Lowman said: "The GCA represents significant progress for those who want to see a fairer grocery market."

While this was in the interest of independent retailers, Lowman warned that the GCA's remit wasn't about protecting suppliers and smaller retailers. "It's about stopping the worst excesses of buying behaviour that ultimately disadvantage consumers," he said.

Stephen Robertson of the British Retail Consortium, which represents large retail chains, called the GCA an "unnecessary quango". "The additional costs will ultimately affect the prices customers pay," he added.