Groceries Code Adjudicator

My hon. Friend is very impatient for the adjudicator. He has campaigned with many others for it. I can assure him that we hope to be able to publish the draft Bill soon after Easter. Our objective is to introduce a final Bill in the Second Session, although we will look at the opportunity for introducing the Bill earlier if parliamentary time allows. One reason for publishing the draft Bill as soon as possible is that if parliamentary time allows, we may be able to make it a first-Session Bill, but that is not within my control. I should also make it clear that the timetable even for publishing the Bill is subject to the necessary Cabinet clearances and the outcome of pre-legislative scrutiny. I hope that hon. Members will understand that, but I can assure them that we are working hard to get the draft Bill published. It is worth putting our debate into context. A persuasive case for an adjudicator has been made by all parties. As others have done, I remind the House of its genesis. The groceries supply code of practice was recommended by the Competition Commission following its market inquiry into the supply of groceries. Its final report was delivered in April 2008. The commission concluded that, although the exercise of buying power by grocery retailers was in general a good thing for consumers, it could raise concerns in certain limited circumstances. For instance, if retailers transfer excessive risks or unexpected costs to their suppliers in the hope of gaining competitive advantage, it is likely to blunt suppliers' incentives to invest in new capacity, products and production processes. That is bad for consumers, and the code of practice is intended to remedy the problem. Like my hon. Friend the Member for Shipley, I believe in the free market and in competition; and like him and others, I believe that our supermarkets do a fantastic job. The Competition Commission has inquired into the matter and made its recommendations, and we are not going outside those in establishing a groceries code adjudicator. Bearing that in mind, it is clear that it is not some sort of dramatic interventionist policy; I believe that it goes with the flow of ensuring fair dealings in that market. The groceries supply code will apply to all companies active in the sector with an annual retail groceries turnover of £1 billion or more. Its provisions are now included in all retailers' contracts with their grocery suppliers. It gives suppliers greater security, which should encourage them to invest in their operations. The code sets out a clear and overarching requirement for fair dealing, and bans retailers from imposing retrospective changes to terms and conditions agreed with suppliers. It also limits the extent to which suppliers are required to foot the bill for listings, promotions, inaccurate forecasts by retailers, or customer complaints. In short, the code is about introducing clear standards and greater certainty. As a result, those parts of supply agreements that may subsequently change are discussed up front, and both parties are agreed on how costs and payments will be allocated in such situations. The Competition Commission concluded that the code would be far more effective if it was enforced by an adjudicator. That should dispel the climate of fear among suppliers, who felt that they risked being de-listed by their buyers if they invoked the previous code of practice. The commission does not have the power to establish new bodies. After failing to win universal agreement from retailers to establish such a body on a voluntary basis, it asked the then Government to act. The present Government agree that the code of practice needs to be independently monitored and enforced if it is to succeed. The groceries code adjudicator will act as arbitrator in disputes arising under the code. He will receive complaints about potential breaches and, when appropriate, conduct investigations. The adjudicator will have the power to accept complaints about retailers' treatment of primary suppliers from anyone in the supply chain, at home or overseas. That will include indirect suppliers who, like many farmers, may not supply the large supermarkets directly. The adjudicator will have the power to require information from retailers in the course of an investigation so that conclusions are based on reliable evidence. He will also take account of other evidence in the public domain, but will not be obliged to investigate every complaint. I emphasise that last point, because it deals with questions about how the adjudicator will act. The adjudicator can take complaints from suppliers directly, as I said, but it can also take account of other evidence that has been published. That is important; in my judgment, it strikes the right balance between preventing the adjudicator going on fishing trips and enabling him to consider information that is available to others.