OFT supermarket review a ‘whitewash’
Trade organisations have reacted angrily to today’s announcement by the regulation watchdog that current guidelines on dealings between supermarkets and suppliers are fair.
In a new report, the Office of Fair Trading (OFT) finds no evidence that the supermarket code of practice is being breached and believes the current guidelines do not need changing.
It rejects suppliers’ calls for an independent body to respond to complaints about unfair dealings with retail giants such as Sainsbury’s, Tesco and Asda, saying a procedure already exists but just needs to be used more effectively.
The British Retail Consortium (BRC) welcomed the decision, saying it confirms supermarkets are observing the code but suppliers are not making use of it.
However, the National Farmers Union for Scotland (NFUS) dismissed today’s report as a “whitewash”, saying an independent complaints procedure was the only way suppliers could be persuaded to complain about supermarkets.
“The fear of losing supermarket contracts as a result of complaining is so widespread that the supermarkets code of practice is never used,” it said.
NFUS president John Kinnaird added that as some supermarket relationships work well, they should have no opposition to an independent watchdog to protect suppliers.
“We will not let this matter rest and will continue to take this issue up with the Department of Trade and Industry. This whole OFT investigation stinks and has now shown itself to be nothing more than a whitewash,” he said.
The Forum for Private Business (FPB) echoed these sentiments, saying small firms “desperately need the OFT to bear its teeth” and enforce the code.
“The fact that suppliers are so afraid to speak out is symptomatic of the culture of fear and intimidation the supermarkets have created – despite the existence of a code of practice,” said policy spokeswoman Victoria Carson.
She added: “But because the OFT will not accept anonymous complaints from suppliers the gapping wound is not receiving surgery.”
The OFT says it will continue to work to ensure the code of practice is kept to, by ensuring greater transparency in dealings, regularly monitoring supermarkets’ code compliance procedures and confirming trade associations can take action where necessary.
But it insisted suppliers must not misinterpret the purpose of the code, which above all was to give guidelines in which business could be conducted.
“The code is not meant to shield suppliers from hard bargaining driven by supermarket competition, but to help ensure that suppliers’ deals with the supermarkets are honoured,” it said.
