The GCA is the UK’s first independent adjudicator to oversee the relationship between supermarkets and their suppliers. It ensures that large supermarkets treat their direct suppliers lawfully and fairly, investigates complaints and arbitrates in disputes.
The Groceries Code covers the 10 largest UK supermarkets.
A recent YouGov survey showed an 8% fall in code-related issues reported by supermarket suppliers from 2015, and a 17% decrease compared to 2014.
Alongside the statutory review, government will also launch a call for evidence to explore the case for extending the remit of the GCA to include indirect suppliers to supermarkets.
Dairy UK response
In response to the consultation, Dr Judith Bryans, chief executive of Dairy UK said that with limited resources, the GCA, Christine Tacon, has shown herself to be effective in improving commercial relationships between suppliers and retailers.
“The clearest and most immediate benefit to the dairy sector will come from extending the remit of the adjudicator to large food service companies and to smaller retailers and wholesalers,” Bryans said.
“These outlets constitute an important and growing part of the market for dairy. They need to be brought under the scope of the Grocery Supply Code of Practice.”
Brexit means challenges
Responding to suggestions that the adjudicator should oversee the dairy industry voluntary Code of Practice, Bryans added, “Brexit means the dairy industry will operate in a new and challenging environment.
“If we are to successfully face these new challenges, contractual relations between farmers and purchasers will need to engender trust and collaboration whilst giving the industry the flexibility to respond to a dynamic and volatile market place.
“Without this flexibility, the industry will not be able to attract the investment necessary to fulfil its potential.”
Dairy to retain control
Bryans added that the Code was developed under different circumstances and needs to be adapted to the changing market situation, and that this is a debate that should be kept within the control of the dairy sector.
“Regulating agricultural supply contracts would effectively require the adjudicator to oversee the commercial relationships between tens of thousands of businesses,” Bryans said.
“This would significantly increase bureaucracy and abandon the idea of a market driven sector.
“If our industry is to prosper, we must work together to take on the challenges and opportunities of a global market place and develop our own solutions. Regulation of contracts would detract from this necessity.”