Date(s) - 19th February 2018
Taking Tacon down the farm was never going to wash
It’s no wonder farming groups are disappointed by the government’s decision not to extend the powers of the Groceries Code Adjudicator, Christine Tacon, to cover primary producers.
Going back now at least three years, they have been strung along by successive governments into holding out hope that the Adjudicator might be ordered to descend like an avenging angel to stop them being bullied by the big, bad supermarkets.
But, in reality, even the most ardent of campaigners on the issue must have seen the writing on the wall long ago: that this was to become yet another broken government promise.
What might be more difficult for them to accept, however, is the fact that the government is, albeit after some absurdly drawn out and bungled handling, making the right decision.
It was in January 2015 that former PM David Cameron expediently dangled the carrot in front of farmers when, in the midst of a crisis over milk prices and under pressure from the Efra committee, he promised to look at extending Tacon’s remit.
Yet, despite repeated signals along similar lines, the government took until October 2016 before it eventually launched a call for evidence on the issue.
Now, nearly a year and a half later, it has come to the conclusion that there is “no clear evidence” of the need to expand the GCA’s remit to new turf, at least as far as primary producers are concerned.
It’s easy to see why the likes of the NFU and a variety of other farm campaign groups were attracted to the idea of the Adjudicator’s role being expanded. Having seen a vast improvement in the behaviour of supermarkets towards suppliers on a whole range of key issues, despite the glaring lack of formal investigative action by Tacon, why wouldn’t indirect suppliers welcome coming under her umbrella?
Yet bodies such as the BRC always strongly argued that trying to bolt on extra powers flew in the face of the raison d’être of the Adjudicator, and had warned that they were certainly not about to cough up to fund any such extended remit, as they do the current system.
Tacon herself has also made no secret of her opposition to the idea and it’s a pretty sure-fire bet that the government would be looking for a new person to fill her shoes right now should they have decided the other way.
An impossible ask
The Adjudicator rightly argued that what suppliers had in mind was an impossible ask, not just in the scale of what her already lightly manned office was being asked to do, but also because of the fundamental change in remit.
She pointed out that at their heart the calls were concerned with supermarket prices, something that the GCA was never set up to police.
Not only that, but it’s been apparent for years that extending the remit would require a fresh CMA investigation and, potentially, primary regulation, which would not only take years but, against the backdrop of Brexit, is about as unlikely as it gets.
In contrast, the decision announced last week to get the CMA to look into expanding Tacon’s remit to cover other retailers (and wholesalers) outside the top 10 supermarkets makes much more sense.
The Grocer exclusively reported way back in October 2016 that this was the course the government was more likely to go down. And while it again looks like it could be a painfully long process, there is much greater logic for the CMA to approve this direction of remit extension.
The glaring need is, of course, for suppliers to be protected against possible abuses of buying power by the looming merger of Tesco and Booker, should the merger be approved by shareholders next week.
Beyond that, there is plenty of anecdotal evidence, at the very least, to support widening the Adjudicator’s powers.
It simply makes no sense that Asda, Sainsbury’s and Tesco are policed by Tacon, but the same is not true for the likes of Boots, Ocado and, surely at some point down the line, Amazon.
The Adjudicator was set up to ensure supermarkets’ power over suppliers did not lead to an “adverse effect on investment and innovation in the supply chain and ultimately on consumers”. So it makes no sense to persist with this artificial divide.
As for indirect producers, while it’s easy to have sympathy for farming groups, which are rightly suspicious that the government’s new £10m package of support will be anything other than sticking plaster, sadly they have been pinning their hopes for too long on a solution that was never going to happen.