Supermarkets complain as Government backs ombudsman plan

Tesco, Asda and Sainsbury's last night attacked the Government for giving the green light to the appointment of a "supermarket enforcer" who will police relationships between the country's biggest grocery chains and suppliers to the £130bn industry.

The British Retail Consortium claimed the new ombudsman would add an extra £130m to shopping bills if he or she allowed multinational food companies to squeeze even 0.1 per cent more out of the big supermarkets. The grocers will also be ordered to pay about £5m to set up the new quango, which they say will add an unnecessary tier of bureaucracy to the fiercely competitive sector. Lucy Neville-Rolfe, Tesco's executive director of corporate affairs, said: "We remain unconvinced of the case for an ombudsman."

A spokesman for Asda said the move would "lead to price increases during tough times for customers", pointing out that "the overwhelming majority of our business is with large multinational suppliers who can, quite frankly, look after themselves".

Yesterday, the Consumer minister Kevin Brennan said the Government had accepted the Competition Commission's case for an ombudsman to "enforce" the new Groceries Supply Code of Practice (GSCOP).

The Government will begin a 12-week public consultation shortly after the GSCOP, which applies to relationships between the 10 biggest grocers and suppliers, comes into force on 4 February. While ministers declined to provide a timeframe, it is thought the "supermarket enforcer" could be in office as early as the summer.

Mr Brennan said: "The power large grocery retailers remain able to wield over suppliers can still create pressures on small producers, especially in these difficult economic times, which ultimately may impact on consumers."