Supermarkets could soon be fined for unfair trading practises

A recent proposal made by the UK government will soon give the Groceries Code Adjudicator (GCA) the power to fine supermarkets up to 1% of their annual turnover for breach of the Groceries Supply Code of Practise.

Feedback welcomes this long-awaited decision that will give the GCA the ability to effectively challenge supermarkets on unethical business practices, such as uncompensated forecast order cancellations. However, having launched an investigation into Tesco this month, prior to her fining powers being granted, the GCA will be unable to fine the supermarket for any breaches of the code. It is of paramount importance that the GCA is given her fining powers prior to further investigations to ensure supermarkets feel the full force of this office’s powers.

The Groceries Code has the potential to be an effective legislative tool to curb systemic food waste in supermarket supply chains. The code directly addresses the issue of order cancellations, a significant cause of farm-level food waste. WRAP estimate that 5% of farm-level waste is caused by supply chain management issues such as order cancellations, although this figure is thought to be underestimated given the hesitance of farmers to speak out of these problems for fear of being de-listed, despite the large financial loss associated with being forced to waste their produce.

Apples saved on a farm from going to waste by The Gleaning Network

Apples saved on a farm from going to waste by The Gleaning Network

However, the GCA currently lacks an essential tool needed to ensure a fair deal for many farmers and other indirect suppliers – namely the remit to adjudicate on issues that arise between indirect suppliers and the supermarkets. At present the GCA is restricted to adjudicating only those issues that arise between retailers and their direct suppliers. Only a small number of farmers directly supply supermarkets.

Forecast order cancellations and last minute order adjustments leave farmers with excessive quantities of food that they can’t sell. Instead the food is left to rot or is ploughed back into the field. This is a global problem that affects farmers across the world and is an issue that Feedback are uncovering through its research and campaigns, as well as through the activity of The Gleaning Network.

Feedback are calling for the remit of the GCA and the code to be reviewed and extended to protect primary producers and other indirect suppliers of the UK’s major grocery retailers.

Feedback is not alone in this demand. The National Farmers Union (NFU) and the House of Commons Environmental Farming and Rural Affairs Committee (EFRA) amongst other are calling for a review of the operations of the GCA. A review is currently scheduled for 2016 but there is a need for urgent consideration of extending the remit of the GCA to include indirect suppliers, both in the UK and abroad.