Last updated: May 2013
Winning the campaign for a supermarket watchdog – with teeth
For more than ten years, campaign groups have argued that UK supermarkets are abusing their buying power and creating huge difficulties for small farmers and food suppliers both in the UK and overseas. The proposed solution – an ‘ombudsman’ who would hear complaints and make rulings – is close to realisation. Traidcraft has been one of the leading groups in this campaign, as Paul Chandler, Traidcraft’s Chief Executive, explains.
Despite repeated attempts by corporate lobbyists to derail or water down its powers, a Bill to establish a Groceries Code Adjudicator (GCA) successfully passed its final scrutiny stage in Parliament in December 2012. A coalition of campaigning groups successfully harnessed public and parliamentary opinion to persuade the government to amend the Bill at the last minute, introducing a power for the GCA to impose fines from the outset, a victory that should ensure that the new watchdog will have real teeth.
The establishment of the GCA is the culmination of ten years of Traidcraft’s engagement with UK supermarket practices. Why has this been a priority for an organisation better known for its focus on promoting fair trade products?
Traidcraft’s mission is to establish justice in the world of trade. But all too often those who grow and process the food we eat are vulnerable to pressure from more powerful players. As we worked on reports in sectors such as tea and horticulture, time and again we saw evidence of poor working conditions, low pay, forced overtime and employment insecurity impacting on the human rights of workers and farmers. Large companies regularly transfer undue risk down the supply chain, with one-sided contracts that protect the retailer at the expense of overseas suppliers and routine disregard for their own codes of ethical practice.
Abuse of buyer power appears commonplace within the food sector. Traidcraft could appreciate the problems first hand through our own experience of trading with supermarkets in the UK. We found ourselves unable to secure written contracts, forced to pay for additional marketing support, or suffering losses as a result of last minute changes of orders already placed, all in direct contravention of the supermarkets’ own codes of practice.
In 2006, Traidcraft was one of a tiny number of companies prepared to provide the Competition Commission with documentary evidence of abusive practices we had experienced – most did not dare for fear of being de-listed. When the Commission demanded the release of emails by the big supermarkets they found endemic bad practice, in spite of retailers’ own declared codes of practice, and the passing of excessive risks and costs onto suppliers who had little choice but to accept them.
The evidence gathered by the Commission showed the dangers posed by this concentration of buyer power.Realistically, this market concentration won’t disappear, and voluntary regulation has proved insufficient to constrain bad practice in this climate of fear. Traidcraft concluded that there was a need for statutory regulation and an authority to whom suppliers can turn when major retailers have not lived up to their own standards.
The Commission’s report reinforced that view, and we welcomed the establishment in 2010 of a Groceries Supply Code of Practice to replace and strengthen the previous voluntary code. The Commission also saw the need for an enforcement authority to which complaints of malpractice could be made. Through further campaigning, we secured all-party support in the 2010 general election manifestos for establishing the GCA and kept up continuous campaigner pressure to ensure the passage of the GCA Bill was given sufficient momentum. The Adjudicator has now been appointed, and the Bill will receive royal assent in early 2013.
But the work is not over. We need to ensure that the existence of the Adjudicator is sufficiently well known so that suppliers feel confident that they can make complaints with anonymity. And we are keen to see that the Adjudicator uses complaints not just to put right specific instances of bad practice, but to identify and address the systemic issues which warrant larger-scale investigations. So we are under no illusion that our work is complete.
Unfortunately UK retailers are not alone in applying abusive purchasing practices. So, whilst continuing to apply pressure within the UK, in the coming year we will also broaden the scope of our campaigning to a wider, pan-European level.
Some argue that supermarkets bring benefits to the economy, and that they are convenient for many customers. Be that as it may, their very scale and strong focus on margins, efficiency and profitability will inevitably lead to negative consequences, both intended and unintended. When these affect the livelihoods and rights of some of the world’s most vulnerable people, we must continue to work to place limits on that power.
More information from Traidcraft.
Paul Chandler has been chief executive of Traidcraft since 2001. He is a Fellow of St Chad’s College in Durham University, and is a Lay Canon and Chair of the Council at Durham Cathedral.