UK supermarket suppliers fail to complain regulator says
major fresh evidence of supermarket malpractice during an extended
consultation with suppliers and food producers, a spokesperson said
The OFT gave supermarket suppliers until yesterday to provide evidence of malpractice or any other breaches of the Supermarkets Code of Conduct. The consultation was extended due to a lack ofcomplaints from the suppliers under the mandatory code. Since the code came into effect on 1 November 2001 there has been no official complaints under the dispute process set out by the code, OFT spokespersonKate Wilcox told FoodProductionDaily.com.
"There is anecdotal evidence of supermarket malpractice but not a lot of hard evidence," she said. "We are getting very little feedback. Suppliers are not using the code to resolve any disputes."
Wilcox said the OFC had received a "number of submissions in the double digit" range but did not want to reveal the exact figures yet. The low number of submissions may be due to the oral nature of the contracts between supermarkets and their food suppliers, she said.
While the informal nature of the contracts gives the supermarketsflexibility in quickly switching from products that are not selling well, it means there is a lack of paper evidence from which to determine if there are any malpractices, she said.
"Our problem in assessing whether malpractices exist is the lack of evidence and the impossibility of getting evidence," she said.
In March this year the OFT published a review of the code, stating that the UK's four big supermarket chains were in general compliance. The regulator then extended the consultation process to givethose supplying food to the supermarkets a chance to make additional submissions about any malpractice. The voluntary code covers Tesco, Asda, Sainsbury's and Safeway/Morrison, who hold about 80 percent of market share.
An investigation by the Competition Commission in 2000 found more than 30 exploitative practices directed by supermarkets at their suppliers. Afterwards the code, amended by the supermarkets who signed undertakings to follow the rules, was put in place.
The OFT last year quizzed suppliers, trade associations and the four supermarkets about how well the code was working. About 80 per cent of respondents said that it had failed to bring about any change in supermarket behaviour.