Page last updated at 20:20 GMT, Monday, 16 July 2012 21:20 UK

Groceries Code Adjudicator Bill

Peers completed consideration of the Groceries Code Adjudicator Bill at report stage on 16 July 2012.

The bill would create a Groceries Code Adjudicator to oversee the relationship between large supermarket chains and their suppliers, following concerns expressed by the Competition Commission that many retailers may have been in breach of the Groceries Code.

Peers considered amendments relating to the effectiveness and scope of the Groceries Code, which requires large retailers to deal fairly and lawfully with suppliers, and the role and responsibility of the adjudicator.

Labour proposed an amendment, with the backing of crossbench peers Lord Cameron of Dillington and Lord Curry of Kirkharle, to give a statutory basis to the code.

Opposition spokesman Lord Grantchester said Labour supported the strengthened code of practice that the bill proposed but argued that the legislation contained an "anomaly" in that it did not enable ministers and Parliament to scrutinise directly the workings of the code.

The amendment also required a review by the Office of Fair Trading, in consultation with the adjudicator, into the effectiveness and scope of the Groceries Code.

Business, Innovation and Skills Minister Baroness Wilcox said the amendment went "beyond the natural evolution of the code's interpretation and [risked] undermining the basis for the code itself".

She told the House: "Remedying competition problems should be addressed by the independent competition authorities, rather than directly by ministers."

Labour pushed the amendment to a vote but it was defeated by 195 votes to 164, a government majority of 31.

A later Labour amendment concerned the powers of the adjudicator, who under the bill would be able to name and shame offenders if a retailer is found to have breached the code, and may have the power to impose fines in the future.

Labour called for the adjudicator to have powers to impose fines as soon as the the post was established, with Labour peer Lord Whitty saying that "naming and shaming is not enough".

However, Conservative peer Lord Howard of Rising argued that "naming and shaming is a genuine deterrent in a cutthroat business like this" and warned that "the only person who pays those fines in the end is the consumer".

Baroness Wilcox said the information-gathering and cost-recovery powers that the adjudicator would have meant that no retailer would want to risk breaching the code.

Shadow environment spokesman Lord Knight of Weymouth said the adjudicator would not begin with sufficient powers if the amendment was not agreed, but peers rejected the amendment by 217 votes to 186 - another government majority of 31.

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