Give '˜toothless tiger' real power, says Alyn Smith

The European Parliament's backing of a report calling for more to be done to level the balance of power between producers and large multinational retailers shows the growing appetite for EU-wide legislative controls to curb supermarket powers, it was claimed yesterday.

MEP Alyn Smith welcomed the EU report. Picture: Francois Walschaerts/European Parliament

Commenting on the report, which looked at ways to root out unfair trading practices imposed by retailers on farmers, such as late payments and listing fees, Scottish MEP Alyn Smith said that he especially welcomed the recognition that the existing EU mechanism, the Supply Chain Initiative (SCI), was a toothless tiger.

Stating that farmers’ organisations were “quite right” in having nothing to do with it, he said: “With no ability to anonymously complain, and no facility to impose effective and dissuasive financial sanctions, the SCI is in the retailers’ pocket. It is also positive that the report highlights the cross-border reach of the giant retailers, and the need for EU action to counter regulatory arbitrage.”

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However, although the farming unions welcomed the fact that the UK’s Grocery Supply Chain code of practice has been proposed as a blueprint for an EU-wide scheme, Smith said that more was needed here too.

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“I still think we need to be doing a lot more at national level,” he said. “The Groceries Code Adjudicator only covers the top ten retailers and their direct relations with suppliers, completely missing out on the much more numerous farmer-processor relationships, where actions illegal under the Groceries Code still can – and do – happen.

“The GCA needs significantly more financial and human resources, and needs to be prepared to get tough with retailers: for instance I was disappointed that Tesco, despite being found guilty of late payments, were not fined.”

Smith added that the UK code also did little to address the huge imbalance of bargaining power in the food supply chain: “All this needs to change if farmers are to get fair prices from the market.”