Archived press release

OFT Fails to Regulate on Supermarket Abuses

3 August 2005

The Breaking the Armlock Alliance [1] condemned today's Office of Fair Trading ruling on the supermarket code of conduct as "a failure to regulate". The Alliance, which includes environment, consumer and farmer organisations, has consistently called for the supermarket Code of Practice to be strengthened and an independent ombudsman set up to monitor and enforce the Code's use.

Without this, the Alliance believes, the big foursupermarkets will continue to abuse their market share bymaking unfair demands on small suppliers, cross-subsidising and unfairly competing against smaller players.

John Taylor, Director of Local and Regional Economies at nef (the new economics foundation), said:

"Our biggest supermarketswill not act as their own `check and balance,' we must have regulatorswith teeth to protect an open market place in which the small suppliers, farmers and stores who contribute so much to communities and economies across the UK can survive."

Friends of the Earth Senior Food Campaigner Vicki Hird said:

"This decision by the Office of Fair Trading beggars belief. How many UK farmers need to go out of business before the OFT recognises that the Supermarket Code of Practice protects no-one but the supermarkets themselves? What we need is an independent watchdog and a moratorium on further takeovers by the big four supermarkets - what we've got is a supermarket-friendly report, which leaves farmers and independent shops hanging out to dry"

The Alliance believes an independent watchdog is needed, which will allow suppliers to bring forward complaints in confidence. Under the current system suppliers are unlikely to report abuses as complaints must go through the retailer, putting their livelihoods at risk.

The Alliance also believes regulation is the only approach that will to stop supermarket abuse of power. Evidence shows that even the most robust voluntary initiatives with supermarkets do not work. Farmer, development, environmental and consumer organisations across the UK and globally are now calling on their governments to introduce regulation to protect suppliers, consumers and independent retailers from increasing supermarket power.

Notes

[1] www.oft.gov.uk/News/Press+releases/2005/146-05.htm

[2] Friends of the Earth and the nef (New Economics Foundation) are part of an alliance of 15 organisations calling for a strict Statutory Code of Practice to protect supermarket suppliers and an independent Retail Regulator to enforce it. The new Code would replace the existing code introduced in 2002. See www.breakingthearmlock.com

The Alliance includes Banana Link, British Independent Fruit Growers Association, farm, Farmers for Action, Farmers' Link, Farmers' Union of Wales, Friends of the Earth, Grassroots Action on Food and Farming, International Institute for Environment and Development, National Federation of Women's Institutes, nef (the new economics foundation), Pesticide Action Network UK, Soil Association, Small and Family Farms Alliance and WyeCycle

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Published by Friends of the Earth Trust