A senior MP has said the Groceries Code Adjudicator (GCA) was ‘set up in the wrong way’ because its remit does not cover prices paid by retailers to suppliers.
Neil Parish, chair of the Environment, Food and Rural Affairs Select Committee, questioned why the GCA, Christine Tacon, was not interested in how the now-rejected Sainsbury’s-Asda merger would affect primary producers.
When giving evidence to the Business, Energy and Industrial Strategy (BEIS) Committee about whether she had engaged with the Competition and Markets Authority (CMA) on the subject, Ms Tacon told MPs she had not.
“If you had two suppliers, one each to Sainsbury’s and Asda, and they got these two suppliers to compete against each other for the job, if the one which did not get it came to me, all I would be able to do according to the code is make sure it was given reasonable notice of losing the business,” she said.
But Mr Parish, who joined the BEIS committee hearing, said he was ‘amazed’ Ms Tacon was not more concerned about the potential for a new mega-retailer to make 10 per cent savings by squeezing suppliers.
“When we set you up, that is what we thought you were going to do,” he said.
“We probably set you up in the wrong way. I think you do a good job as far as you go, but every time we put an idea to you that we want to extend your remit, you resist it.”
Ms Tacon repeatedly told the committee she believed she had enough powers already to make a change for producers, citing evidence from her annual survey which showed the number of retailer suppliers who experienced a breach of the Groceries Code had halved in the five years she had been in post.
She went on to suggest the Government’s time might be better spent regulating other sectors instead of looking to do more in the groceries market.
But she was criticised by MPs for failing to acknowledge the changing nature of the sector.
BEIS committee chair Rachel Reeves said: “It is a bit surprising that, six years into your role, you are happy the powers you were granted then are the right powers for a very different market.
“All of us, in our constituencies, see a very different groceries market, whether because of the growth of some of the discount chains or the growth online.
“I would ask you to go away and reflect on that a little bit more.”