Government gives go-ahead for supermarket watchdog

A new ombudsman is to be created to oversee relations between large retailers and their suppliers, the Government has confirmed.

The supermarket watchdog will enforce the groceries supply code of practice (GSCOP) from next month, following the recommendations of the Competition Commission.

A consultation to decide how to implement the code will commence after its launch on 4 February.

The Department for Business, Innovation & Skills has estimated that the new body will cost £3.7 million to set up, followed by a yearly fee of £1.3 million.

Yet Minister Kevin Brennan said he did not anticipate that its creation would have a ‘significant impact on consumer prices or workers’.

In a written statement to Parliament, he said: ‘The power that large grocery retailers remain able to wield over their suppliers can still create pressures on small producers.

‘However the Government is mindful of placing unnecessary costs on to business especially in a period of economic difficulty, which is why we plan to issue a consultation on how best to take matters forward.’

The Forum of Private Business (FPB) has welcomed the decision, but called for further measures to help suppliers and shops.

‘While a dedicated watchdog for these businesses is welcome, it does not go far enough to hold large retailers to account or to address the need to reinvigorate small shops on our high streets and the communities they serve,’ commented the FPB's Chief Executive, Phil Orford.

Introducing a guarantee of anonymity, the organisation said, would help protect those suppliers who wish to make a complaint against a supermarket.