3rd October 2023
The Department of Business and Trade (DBT) has carried out its third statutory review of the Groceries Code Adjudicator (GCA). The review states that the overwhelming view of retailers, suppliers and others is that the GCA is a highly regarded, efficient and effective regulator. Because of this, Government has decided not to merge the GCA with the Competition and Markets Authority, in recognition of the importance of the GCA in ensuring fairness in the UK food supply chain.
The Department of Business and Trade (DBT) has published a report setting out the conclusions and recommendations of the third statutory review of the Groceries Code Adjudicator (GCA), covering the period 2019 to 2022. Section 15 of the Groceries Code Adjudicator Act 2013 requires the Secretary of State to review the Groceries Code Adjudicator’s performance every three years.
Overall, the review found the GCA to be a highly effective regulator that made good use of its powers. The GCA takes a balanced and collaborative approach that usually resolved issues before the need for an arbitration or investigation. While there had been steady improvement in compliance with the Groceries Supply Code of Practice (Code) since the GCA had been created, external factors such as the pandemic and the war in Ukraine had brought unprecedented challenges to the grocery sector and meant a continuing need to ensure the enforcement of the Code.
In particular, the review found that inflationary pressures resulting from these external factors had introduced greater tension between the interests of retailers in limiting price increases and those of suppliers who have faced increased cost pressures. The GCA’s understanding of these potential risks to Code compliance, and the action taken as a result, has helped ensure that suppliers are given a fair hearing and that retailers are aware of their Code responsibilities.
The review found no evidence to support the need to change the Permitted Maximum Financial Penalty the GCA can impose following an investigation into non-compliance. The maximum fine of 1% of all turnover gives the GCA significant scope to impose an appropriate financial penalty and was supported by stakeholders as being at an appropriate level.
Government considered the case for transferring the functions of the GCA to another public body and found that such a move would not increase the effectiveness or efficiency of the enforcement of the Code.
You can read the full review here.