David Prosser: We're the ones squeezing out the suppliers


Outlook Whoever wins the election, the writing is on the wall for the supermarkets, with both Labour and the Conservatives now signed up to the idea of an ombudsman to police the relationship between the sector and its suppliers. The "enforcer" will rule on breaches of a code of practice – in theory preventing those nasty giant supermarkets from driving hard-working small businesses (think vulnerable farmers) into the ground.

It's a nice idea, but what difference will the plans make? After all, we've had a code of best practice governing relations between the supermarkets and their suppliers for some time, but operating on a voluntary basis. Not a single grocer has ever been found to be in breach of it. So the supermarkets are all thoroughly decent folk, or the rules aren't up to much. Either way, making the code compulsory isn't going to make much difference.

The Government itself insists that its proposals aren't going to have much impact on the prices that consumers pay in the shops. In which case, why is it bothering? Does it imagine, somehow, that the supermarkets are going to take the hit from the ombudsman's rulings as it tries to protect suppliers? No, the Government is right because there isn't going to be a hit.

The difficulty with this industry is that the competition to supply it is so cut-throat. Suppliers to grocers are prepared to accept whatever terms of business they are offered. And for each one that says no, there are several more prepared to step into the breach.

The responsibility for that lies not with the grocery sector itself but with consumers, who consistently vote with their feet. If everyone who claimed to support small butchers, bakers and candlestick makers got round to shopping on their local high street occasionally, rather than trouping out to the massive supermarkets they apparently dislike so much, the grocers might not be so profitable. But people like the value and convenience that supermarkets offer, so they support the system to such an extent that the supply chain can be squeezed.

There was a good deal of bleating from the supermarkets yesterday, which feel duty-bound to protest about the ombudsman. They have a point in their claim that the biggest beneficiaries of the increased regulation are likely to be the largest suppliers to the sector. And they are even more justified in complaining about the bureaucracy coming their way. After all, it is almost two years since the Competition Commission first recommended that the Government take this step and we still don't even have final proposals.

Still, if the retailers are unhappy now, wait until a Tory government arrives. It accuses Labour of not going far enough and promises much tougher action on the grocers. So much for the party of big business.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive / Foreign Exchange Dealer - OTE £40,000+

£16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

Day In a Page

The long walk west: they fled war in Syria, only to get held up in Hungary – now hundreds of refugees have set off on foot for Austria

They fled war in Syria...

...only to get stuck and sidetracked in Hungary
From The Prisoner to Mad Men, elaborate title sequences are one of the keys to a great TV series

Title sequences: From The Prisoner to Mad Men

Elaborate title sequences are one of the keys to a great TV series. But why does the art form have such a chequered history?
Giorgio Armani Beauty's fabric-inspired foundations: Get back to basics this autumn

Giorgio Armani Beauty's foundations

Sumptuous fabrics meet luscious cosmetics for this elegant look
From stowaways to Operation Stack: Life in a transcontinental lorry cab

Life from the inside of a trucker's cab

From stowaways to Operation Stack, it's a challenging time to be a trucker heading to and from the Continent
Kelis interview: The songwriter and sauce-maker on cooking for Pharrell and crying over potatoes

Kelis interview

The singer and sauce-maker on cooking for Pharrell
Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea