It has been a busy month in the Department for Business, Innovation & Science (DBIS) as it announced that the Government has accepted the Competition Commission's recommendation for the creation of a body to enforce the new Groceries Supply Code of Practice.
"Designated Retailers" with sales of groceries exceeding £1 billion in the UK will be required to incorporate the terms of the Code into their contracts with suppliers from 4 February 2010. The DBIS will carry out a consultation beginning in February as to how best to enforce the Code and who the enforcement body might be.
The Competition Commission also felt that there was a need to set up an Ombudsman to arbitrate in disputes between suppliers and retailers over the application of the Code and to investigate breaches of the Code. Although the Commission was not able to negotiate a voluntary agreement amongst the retailers on the terms of such an Ombudsman's power, the DBIS felt that its introduction was a necessary step to assuage some of the concerns outlined by the Commission.
The introduction of the Code aims to redress some of the adverse effects on competition which the Competition Commission found present in the UK groceries sector, primarily due to the buying strength of certain retailers in the market. These concerns should also be partially alleviated by the new planning restrictions on grocery retail planning applications, which we reported in the previous property E-Bulletin article: Planning ahead - competition knocks at the door of the planning regime.