Groceries Code Adjudicator Bill Lords third reading

25 July 2012

Members of the House of Lords completed the third reading of the Groceries Adjudicator Bill, final detailed line by line scrutiny, yesterday (Tuesday 24 July)

A government amendment made by Baroness Wilcox (Conservative), following a previous debate in the House, was agreed by the members of the Lords. This amendment to Clause 21 detailed was a minor and technical change to reflect the Arbitration (Scotland) Act 2010.

Lord Knight of Weymouth (Labour) moved the second and last amendment in light of farmers blockading dairy processors and crisis talks held at the Royal Welsh Show over the weekend. 

He explained the amendment ensures: '... in clear English that the groceries code supply order is defined to include, "any subsequent order made" by the Competition Commission under Section 161 of the Enterprise Act 2002.'

He questioned the minister on possible policy from Defra or BIS following talks at the weekend.  He also asked whether the code will apply only to large supermarkets and its direct suppliers and whether the Competition Commission will revise or devise a code to cover prices across the dairy supply chain. 

Baroness Wilcox responded and explained that Lord Knight's technical amendment ensures that 'references to the groceries supply order will refer to the order as varied, if that order is subsequently varied' and explained that in the bill's current status this is the government's intention. She said: 'It would not make sense for the adjudicator to exercise his or her enforcement and compliance functions by reference to a version of the order which was different from the version binding the retailers at the relevant time.'

Lord Knight withdrew his amendment and the bill completed its passage through the House of Lords. The bill will be reprinted with the Lords amendments and considered by the House of Commons after summer recess. The bill may return to the House of Lords if the House of Commons make changes to the bill and agreement and clarification is required - this is known as ping pong. 

The Groceries Code Adjudicator Bill so far

About the Groceries Code Adjudicator Bill

The bill was introduced in the House of Lords on 10 May and examines the practices of larger supermarket chains with regard to their suppliers, including farmers and small-scale producers.

Following a Competition Commission report published in 2008 concerns were raised that retailers were demanding retrospective charges from suppliers and altering contractual arrangements.

The new groceries code will apply to the UK's ten 'large' retailers, each with a turnover of more than one billion pounds in groceries. The code will ensure that retailers:

  • deal fairly and lawfully with suppliers
  • do not vary supply agreements retrospectively
  • pay suppliers within a reasonable time.

What is third reading?

Third reading in the chamber is the final chance for the Lords to debate and change the contents of the bill. At least three sitting days usually pass between report stage and third reading.

The day before third reading starts, amendments (proposals for change) are published in a marshalled list – in which all the amendments are placed in order. Amendments on related subjects are grouped together and a list ('groupings of amendments') is published on the day.

Unlike the House of Commons, amendments can be made at third reading in the House of Lords, provided the issue has not been fully considered and voted on at an earlier stage.

Amendments at third reading in the Lords are often used to clarify specific parts of the bill and to allow the government to make good any promises of changes to the bill made at earlier stages.

The Groceries Code Adjudicator Bill started in the Lords. It will go to the House of Commons for its first reading. The Commons reprints the bill with the Lords amendments. 

Further information

Image: iStockphoto

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