A lobby group is calling for local suppliers and traders to be granted anonymity when reporting abuses of power in the grocery sector.
The Forum of Private Business (FPB) made the call as it welcomed the news that an independent watchdog would be set up to enforce the Groceries Supply Code of Practice (GSCOP), a code drawn up by the Competition Commission in 2008.
The code, which covers areas such as late payment, retrospective pricing and consumer complaints, was created following a two-year inquiry into alleged abuses in the groceries market.
A study conducted by the FPB found that 76% of small businesses wanted an ombudsman to oversee the code, but 74% wanted guaranteed anonymity when giving evidence to the Office of Fair Trading or Competition Commission.
The FPB is concerned that many small suppliers will be reluctant to speak out against the supermarkets openly, for fear of having their products pulled.
“Small suppliers and retailers continue to suffer as a result of supermarkets’ anti-competitive practices. One of the main problems is that many suppliers feel intimidated into silence and do not speak out; a situation we need to change,” said FPB chief executive, Phil Orford.
The FPB also questioned the effectiveness of a proposed ‘competition test’, designed to stop large retailers from dominating local markets, arguing that it would simply enable other supermarkets to compete.
In 2006, the All-Party Small Shops Group warned that around 2,000 small shops are closing every year, a rate which could see the majority of the UK’s independent retailers disappear by 2015.
“While a dedicated watchdog for these businesses is welcome, it does not go far enough to hold large retailers to account or to address the need to reinvigorate small shops on our high streets and the communities they serve,” added Orford.
A consultation on how best to implement the GSCOP, including the extent of the ombudsman’s jurisdiction, will be launched by the government next month.
© Crimson Business Ltd. 2010
