Tougher grocery code 'will make customers pay', warns BRC

Government plans for a grocery ombudsman are "even less necessary" after plans for wider regulation of supermarkets were released yesterday, according to the British Retail Consortium (BRC).

The group has criticised the Government for pushing ahead with the proposed reforms to the Grocery Supply Code of Practice, arguing that consumers will end up paying for the added bureaucracy. Today, the UK's top two supermarkets, Tesco and Asda, made similar complaints.

Under the plans, a strengthened code would extend to all supermarkets with turnovers exceeding £1 billion, a move that would go beyond the 'big four' to include others such as Waitrose, Aldi and the Co-operative.

According to Peter Freeman, Competition Commission chairman and chairman of the grocery inquiry, the new Code of Practice would ensure that suppliers do not have costs imposed "unexpectedly or unfairly" by retailers.

"We remain clear that an ombudsman is needed, but the code in itself will be a major improvement to relationships between retailers and suppliers, and ultimately we think that will be in everyone's interest," he said.

MPs called on the Government in December to push on with creating an ombudsman, without waiting for a voluntary agreement from the supermarkets.

However BRC director-general Stephen Robertson said creating an ombudsman would pander to supplier pressure.

"This should be about customers," he said.

"It would simply be expensive bureaucracy - unnecessary piling on costs with only one result; increased shop prices.

"If the economy were in good shape this would be a mistake but during a recession it is even more wrong."

IMAGE Jack Atley/Bloomberg News /Landov