Supermarkets : The Groceries Code Adjudicator - Commons Library Standard Note

Published 28 June 2014 | Standard notes SN06124

Authors: Antony Seely

Topic: Competition

Following an investigation by the competition authorities in the groceries market, in 2001 a code of practice was introduced to govern the relations between the major supermarkets and their suppliers. Over the next few years there continued to be many complaints by suppliers, smaller retailers and commentators that supermarkets were using their market dominance to compete unfairly. In April 2008 the Competition Commission completed a second enquiry, and as part of its recommendations, it proposed a strengthened and extended code, to be overseen and enforced by an independent ombudsman. In August 2009 the Commission recommended that the Government should put this body on a statutory basis, as it had proved impossible to reach a voluntary agreement on setting up an ombudsman with the supermarkets. In February 2010 the Labour Government launched a consultation exercise on doing this, but this was interrupted by the 2010 General Election.

In its Coalition agreement published in May 2010, the new Conservative-Liberal Democrat Government announced that it would establish an ombudsman to “proactively enforce the Grocery Supply Code of Practice and curb abuses of power.” Following consultation, the Government published a draft Bill in May 2011. In July 2011 the Business, Innovation and Skills Committee completed scrutiny of the draft Bill, recommending that it should be proceeded with forthwith. In May 2012 the Groceries Code Adjudicator Bill was introduced in the House of Lords as one of the first Bills of the 2012/13 Session, and received Royal Assent on 25 April 2013.

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