Mark Leftly: They gave the watchdog power to probe supermarkets. Shame they forgot the teeth


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The Independent Online

Westminster Outlook As well as being the Groceries Code Adjudicator, the rather ominous-sounding title for the watchdog overseeing the relationship between supermarkets and their suppliers, Christine Tacon is a non-executive director at the Met Office. She should, then, be able to forecast the storms ahead in her first big test in the role.

Granting any authority the retrospective power to punish those they oversee would, rightly, be treated with suspicion. Still, there is frustration that Ms Tacon would be unable to fine Tesco should she find that the supermarket giant breached rules over how it deals with suppliers, particularly if payments were unfairly delayed.

Announced yesterday and expected to take between six and nine months, this is the adjudicator’s maiden investigation. The reason Ms Tacon wouldn’t be able to impose financial penalties is that any wrongdoing would have taken place before she was granted the power to do so.

Sparked by information received in the wake of Tesco’s £263m profit overstatement, the inquiry covers the chain’s conduct from mid-2013 to yesterday.

Vince Cable, the Business Secretary, only secured government agreement last week to proceed with legislation for what should surely be the adjudicator’s most significant weapon – hitting wallets. That power to fine a guilty supermarket up to 1 per cent of its turnover might not even get through Parliament before May’s general election.

This has been a ludicrous delay. Ms Tacon, who ran the Co-operative’s farming business for 11 years until 2012, became the country’s first grocery adjudicator nearly 20 months ago.

We must not presume Tesco’s guilt, even though the group admits that it informed the adjudicator of “areas of concern” and is changing how it works with suppliers. But if substantial and extensive misbehaviour is proven, there will be an outcry that the supermarket has got off lightly: under the current plans, a fine could potentially run to hundreds of millions of pounds; instead, Tesco could face some “legally binding recommendations”, which is far enough away from a stick that it could be mistaken for a carrot.

Mr Cable has, as frustrated and embarrassed ministers tend to, blamed the Treasury for the delay in giving the adjudicator appropriate powers. Unsurprisingly, Labour – in the guise of the extravagantly named shadow food and farming minister Huw Irranca-Davies (the Ogmore MP fastened his wife’s maiden name to his own when they married) – accused the “Tory-led Government” of having “dragged its heels” on the issue.

Certainly, Ms Tacon has been asking for the power to impose fines since at least the end of 2013, and has given plenty of warning in recent months that she was pondering launching an inquiry. 

At a November meeting with code compliance officers from all the big supermarkets, including Waitrose, Lidl and Asda, she said it was unacceptable that 85 per cent of suppliers had mentioned potential code breaches.

Ms Tacon had grown increasingly irritated that such issues were being “explained away as commercial negotiations”, and even though many of the suppliers themselves accepted such breaches as “part and parcel of commercial life”, she warned that this was “still breaking the law”. She went on to state that concerns raised with her would be brought to a conclusion “either by closing the issue or taking another course of action”.

No need to read between the lines there; it was clear that Ms Tacon was ready to start exercising her investigative duties.

Had the Government noted this heads-up, now publicly available on its own website, Mr Cable could have accelerated  the authority to issue fines through the Commons and Lords.

MPs aren’t exactly overburdened with legislative debates at the moment, which is why so many of them are privately saying that the Coalition’s introduction of five-year fixed term Parliaments should be reduced by 12 months.

So it is conceivable that the Government could have got the power enshrined in the statute books between that meeting in early November and yesterday’s announcement, meaning that any wrongdoing found in that timeframe would have been open to the possibility of financial penalties.

By any measure, ministers and officials have messed up the introduction of its supposedly powerful new regulator. The public at large will find it ridiculous if the allegations against Tesco are proven, but it goes unpunished.

The forecast here is that, through absolutely no fault of her own, Ms Tacon would then endure accusations of being soft on supermarkets.