The ombudsman is a regulatory empire we can do without

We’ve got a grocery code of practice. It’s just been toughened and extended. It’s overseen by the Office of Fair Trading (OFT), so why would we need a costly new enforcer layered on top of that?

In my dictionary, bureaucracy is next to burden and the planned supermarket/supplier ombudsman would be a definition of both.

So where are we up to? The Government launched a 12-week consultation on its proposal last week and the Opposition has said it too would create an ombudsman if it wins power.

But also last week, the extended Grocery Supplier Code of Practice came into force.

Talk about rushing to judgement on whether it’ll work. All politicians need to appreciate its strength and scope - something the BRC is working hard to achieve - before looking to pile on a costly new regulatory empire.

Judging by some of our recent meetings, a worrying number of those pushing for an ombudsman seem not to have even read the Grocery Supplier Code of Practice. I can’t believe they’d think an ombudsman was needed if they had.

The code gives any supplier the right to apply to have an independent arbitrator appointed under the Chartered Institute of Arbitrators’ rules to look into their case, with the initial costs being met by the retailer.

It protects suppliers from being asked for unexpected retrospective payments or to cover the costs of shrinkage. It will mean much more detail being confirmed in writing and more certainty on both sides.

Rather than just the big four supermarkets, it applies to the UK’s 10 biggest grocery retailers. They all now have a compliance officer directly responsible for it and reporting to the OFT. A retailer in breach faces a fine under the Enterprise Act.

Why would you need an ombudsman within the OFT when this is all being overseen by the OFT anyway? And remember OFT chief John Fingleton has said supermarkets are pro-consumer, bring low prices, innovation and an ombudsman is not necessary.

Does anyone believe it would only cost the £5m a year that’s been claimed? I can just see the self-justifying, make-work regime that would follow as it built its role not just as arbitrator, but investigator.

Retailers would be paying the ombudsman’s bills but they would also be paying all the costs of responding to the latest general inquiry into say beef or potato contracts or indeed cola or detergent contracts.

The idea that complaints could be anonymous is an affront to natural justice and completely impractical.

And, turnover thresholds aside, it would hand negotiating power to big food manufacturers who’d use the threat of the ombudsman to push prices up.

The benefits of honest competition in a free market seem to have been forgotten.

Certainly it’s time some of the people concerned thought about the words ‘customers’ and ‘interests’.

Stephen Robertson is Director-general of the British Retail Consortium