Retail sector prepares for a Groceries Code Adjudicator

The Groceries Code Adjudicator Bill is expected to become law later on this month.  It will create the first independent adjudicator in the UK to oversee the relationship between large supermarkets and their suppliers.

The Groceries Code Adjudicator Bill will give teeth to the Groceries Supply Code of Practice (the “Groceries Code”) which has been in place since 2010.  The Groceries Code regulates the relationship between the ten largest supermarkets and their suppliers and obliges them to deal fairly and lawfully with their suppliers, not vary supply agreements retrospectively, except in circumstances beyond the retailer’s control which are clearly set out in the supply agreement, and pay suppliers within a reasonable time.  However, critics that complained that the lack of an independent adjudicator has left disgruntled suppliers reluctant to enforce their rights against the commercial might of the big supermarkets. 

The Adjudicator has powers to:

  • Arbitrate disputes between retailers and suppliers
  • Investigate confidential complaints from direct and indirect suppliers
  • Hold to account those retailers who break the Groceries Code, as well as ultimately imposing financial penalties, if necessary

 

The Groceries Code Adjudicator Act 2013 is expected to come into force later this month, and the Adjudicator is expected to produce guidance over the next few months setting out how she plans to operate.

A link to the Government press release can be found here.

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