The Groceries Code Adjudicator, Christine Tacon, will soon be able to fine those who breach the Groceries Supply Code of Practice. Until now the Adjudicator has had more limited enforcement powers at her disposal to secure compliance with the Code. The Adjudicator can make recommendations on compliance with the Code and require those who breach the Code to make a public statement.
You would be forgiven for thinking these powers were toothless - until Tesco was exposed by the Adjudicator for breaching the Code. This created enough adverse publicity to make other retailers think twice.
Now an Order has been laid before Parliament to give the Adjudicator additional powers to fine retailers up to 1% of their UK turnover (not profits) for breaching the Code. If the Order is approved in its current form, we could see the Adjudicator issuing fines in excess of £10 million from April, when the Order is set to come into force.
The power to issue fines could see the Adjudicator act as a form of quasi-regulator, rather than ombudsman, to the Code. This is something that will undoubtedly make the industry sit up and pay full attention.
We continue to monitor developments in the application of the Code and would be interested to hear from anyone who suspects a breach.
The author Chris Lewis works in our commercial and food, farming and land teams with Philip Davey.