Page last updated at 20:34 GMT, Monday, 19 November 2012

Groceries Code Adjudicator Bill part one

The introduction of a groceries code adjudicator to oversee the relationship between large supermarket chains and their suppliers will provide "real benefits for consumers, business and the UK economy", Business Minister Jo Swinson has said.

On 19 November 2012, as MPs began debating the Groceries Code Adjudicator Bill at second reading, Ms Swinson said that the adjudicator would not initially be given the power to fine supermarkets found to be in breach of the groceries code.

The adjudicator would be able to name and shame non-compliant supermarkets, she told MPs, and since they are "rightly very careful about their reputation", this would be sufficient at first.

But the legislation will also give the government the power to introduce financial penalties to the regulatory regime if this were deemed necessary in the future.

Shadow business minister Ian Murray warned that the adjudicator would be "toothless" without the ability to fine retailers.

"There is absolutely no way you can put fear into the hearts of the supermarkets by having an adjudicator that doesn't have the power to fine," he said.

Introducing this power at the outset would turn a "good bill" into a "great bill", he argued.

The groceries code was introduced in 2010 in an attempt to protect groceries suppliers from the transferral of excessive risk and unexpected costs from large retailers.

But the Competition Commission has expressed concerns that many retailers may have since been in breach of the code.

The adjudicator will be expected to investigate allegations of code violations and attempt to resolve differences between retailers and suppliers.

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