February 5, 2010

UK tightens supermarket-farmer code of practice

The Grocery Suppliers Code of Practice has come into force in the UK to oversee the way supermarkets treat farmers.

The new rule, effective February 4, 2010, will require supermarket buyers to keep written records of negotiations with their suppliers.

The code will be regulated by the Office of Fair Trading.

Its implementation came as further evidence emerged of retailers making retrospective demands for money and changing trading terms. The National Farmers' Union (NFU) had accused retailers of sustained bully tactics against suppliers ahead of the code, which contains guidelines on fair dealing.

NFU president Peter Kendall said he had heard how suppliers to major retailers have faced some of the most unreasonable demands for retrospective payments and changes to trading terms for the past 10 days.

Retailers were effectively launching pre-emptive strikes against farmers before protection afforded by the new code came into force, said Kendall.

The British Retail Consortium rejected claims that supermarkets were giving farmers a raw deal. Retailers did not control the food chain but were simply one link in a complex process from production to consumer, it said. The implementation of a supermarket watchdog would be a step too far and prove costly for consumers, the consortium added.