The key way this would be enforced was through the appointment of a dedicated Groceries Code Adjudicator, funded by a levy on the 10 largest supermarkets, with investigatory and retaliatory powers.
The inaugural adjudicator, Christine Tacon, was formally appointed at the end of June, more than five years after the current code came into effect (her appointment was held up by a lack of legislation backing her powers). In her former life, Tacon spent 11 years negotiating with the supermarkets as the head of a major British agricultural supplier.
“I’ve been in the middle of it,” she told a Melbourne University public symposium from London yesterday. “I’ve been frustrated by it.”
She stressed that her powers did not relate to prices, or to figuring out whether consumers were being treated fairly. She’s just empowered to apply the code regarding the relationships between supermarkets and their suppliers.
But she’s well empowered in how she goes about this. She has investigatory powers to investigate breaches of the code, and when she finds a breach, she can name and shame the offenders by requiring them to take out ads in major newspapers.
And where this isn’t sufficient, she’s empowered to issue the supermarkets with fines. And she wants these to be hefty. “I’m considering fines that are a percentage of British turnover,” she told the symposium. “It has to be punitive.”
It’s worth emphasising just how significant this level of power is. Our own competition regulator, the ACCC, can only investigate breaches of the Competition Act. To stop companies taking anticompetitive actions, or to issue fines and other punitive measures, it has to take the issue to court, where a judge decides on whether or not its case has merit.
Supermarkets will be able to dispute Tacon’s assessment through the British High Court, but Tacon will not need to wait for a successful prosecution through the legal system to seek redress.
She said she had two priorities for her first few months. Many suppliers are still frightened to come forward with stories of contract changes for fear of being barred from selling to the supermarkets in future. So she’s getting out there and building contacts within British supplier communities.
“When I do an investigation, everyone has a right to remain anonymous,” she said. “I need to stress that anonymity, and the fact that I operate from a pool of evidence, and not one person’s testimony.”
Her second priority is to educate and clarify the issues around the code, so that the supermarkets do not breach it unknowingly.
“None of the retailers want to break the law. And they don’t want me to find they’ve broken the law.
“So I see the compliance officers as my allies.”
Tacon has been in her role for just over a month. She has yet to issue any fines or conclude any investigations, but says she’s looking into several issues that suppliers have raised with her.
The next two to three years will reveal how the system has worked, said Bar-Isaac. “There was a lot of hope for the 2001 code to offer guidance. That didn’t happen. I hope it happens under the adjudicator.”
Myriam Robin is a reporter for SmartCompany and its sister site LeadingCompany. She has degrees in economics, international studies and journalism. She likes writing about businesses taking risks and doing new things.
