Ombudsman to discipline supermarket bullies
by David Masters
August 9, 2009
Anti-poverty groups and farmers’ unions have welcomed calls from the Competition Commission for an independent Ombudsman to be appointed to oversee supermarkets’ treatment of suppliers.
Supermarkets would be forced to foot the £5 million annual bill for the Ombudsman, who would seek to protect suppliers from exploitation.
With the Competition Commission’s request officially submitted to the government, it is up to Peter Mandelson’s Department of Business, Innovation and Skills (BIS) to install the Ombudsman.
Supermarkets have long opposed calls for a composory Ombudsman, but have also failed to adhere to voluntary codes of practice designed to protect suppliers.
The Competition Commission said supermarkets’ conduct left it with “no alternative” than to recommend the Ombudsman.
Peter Kendall, president of the National Farmer’s Union, said he was “absolutely delighted” to hear of the Competition Commission’s request.
“This is an important day for suppliers, including farmers,” Kendall said.
The Ombudsman will help to eliminate the “climate of fear” suppliers endure, he added.
Anti-poverty charity War on Want also welcomed the news.
“In order to keep prices low and profits high, British supermarkets cut costs by squeezing suppliers abroad,” said Simon McRae, War on Want’s senior campaigns officer.
“These cuts are passed on to workers in the developing world who earn a pittance and suffer from appalling conditions.”
Tesco, Sainsbury’s, Asda and others plan to lobby the government to reject to proposals.
Representing the supermarkets, the British Retail Consortium (BRC) said taking £5 million from supermarkets’ £70 billion yearly turnover represents an “unnecessary cost”.
“Most supermarket suppliers are multinational food businesses perfectly able to stand up for themselves,” the BRC said.
“We have seen no evidence to support claims that retailers are unfairly putting the squeeze on their suppliers,” it added.
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