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Groceries Code Adjudicator's role could be extended to cover more of the supply chain

The Department for Business, Energy and Industrial Strategy (BEIS) has recently launched the first statutory review of the Groceries Code Adjudicator (GCA). 

Alongside the review of the GCA’s role, BEIS has also launched a call for industry evidence on the case for extending the GCA’s remit. The GCA enforces the Grocery Supply Code of Practice (GSCOP), which applies to the ten largest UK supermarkets and their direct suppliers. It does not apply elsewhere in the groceries supply chain. However a number of indirect suppliers, such as farmers and primary producers, have argued that they require similar levels of protection afforded by the Code.

BEIS invites comments on the review and call for evidence by 10 January 2017. 

GCA statutory review

The GCA’s statutory review covers the period from June 2013 to 31 March 2016. BEIS is seeking views and evidence from stakeholders, to allow it to make an assessment on the GCA’s performance against the measures set out in the Act. This includes:

  • how much the GCA’s powers have been exercised;
  • how effective the GCA has been in enforcing the Code;
  • whether to make an Order setting out the information that the GCA may consider when deciding whether to investigate;
  • whether to amend or replace the GCA (Permitted Maximum Financial Penalty) Order 2015;
  • whether some or all of the GCA’s functions should be transferred to a public body; and
  • whether to close down the GCA.

Call for evidence 

At the end of the call for evidence, BEIS will consider whether there might be competition issues existing elsewhere in the groceries supply chain, which are not covered by GSCOP. The relevant evidence received during the call for evidence will be passed to the CMA for them to consider and decide whether to commence a market investigation or use other competition law powers.  If the CMA decides that further action is justified, having applied its prioritisation principles, BEIS will wait for the outcome of that process.

If the CMA decides not to take action itself, the government will make its own assessment of the evidence. The government will consider whether there is sufficient evidence to support proposals for regulatory intervention. As part of this, the government may conclude that there is no evidence of a problem with the supply chain or insufficient evidence to warrant government action.

Next steps

There have been industry calls for the extension of the GCA’s remit to farmers, manufacturers and primary producers. There have been industry calls for the extension of the GCA’s remit to farmers, manufacturers and primary producers. But it is understood that Christine Tacon (the current GCA) is concerned that an extension could stretch resources and focus.

In any event, this review and call for evidence will provide more clarity to the CGA’s role and work. It will highlight whether competition issues in the wider groceries supply chain arise, which justify the CMA’s intervention.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at November 2016. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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