Both Labour and the Conservatives have lent support to a supermarket ombudsman. But does it actually protect suppliers? And does it matter at all to the consumers?
Tesco chief Sir Terry Leahy has today slammed the introduction of a supermarket ombudsman once again. The move, he says, will work in the interests of suppliers rather than consumers.
Some will argue that Tesco – being the biggest grocer – doesn’t want to be regulated because it already holds suppliers over a barrel in negotiations because of its buying power.
But those commentators would be wrong. Of course Tesco will have difficult negotiations with suppliers but that is no different to any other supermarket. Or indeed, any other retailer and supplier.
And it’s worth remembering that some of those suppliers are also big, global companies. The ombudsman would not just cover the one-man band suppliers; it would also work to protect companies like Procter & Gamble. And those companies are big enough to look after themselves.
For the smaller suppliers, they are already looked after by the Grocery Supplier Code of Practice (GSCOP). The code has been in force for some time but was last month expanded to include the top ten grocers, not just the big four. It also offers suppliers the chance to have an independent arbitrator for any disputes.
The GSCOP is all that suppliers need to protect their negotiations. An ombudsman would provide unnecessary regulation and also, unnecessary cost to the supermarkets.
Most importantly, an ombudsman would not have any impact on what offers the consumer has in stores. And that should be front of mind for the Government and for supermarkets and suppliers.
The UK consumer benefits from having one of the most competitive grocery sectors in the world. And no government – whether Labour or Conservative, both of which have given the ombudsman the thumbs up – should stifle it with regulation.
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