Dairy Products

Department for Business, Innovation and Skills written question – answered on 8th December 2014.

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Photo of Nicholas Soames Nicholas Soames Conservative, Mid Sussex

To ask the Secretary of State for Business, Innovation and Skills, if he will bring forward proposals to extend the remit of the Groceries Code Adjudicator to cover the dairy supply chain.

Photo of Jo Swinson Jo Swinson Parliamentary Under-Secretary of State (Department for Education) (Women and Equalities) , The Parliamentary Under-Secretary of State for Business, Innovation and Skills

The jurisdiction of the Groceries Code Adjudicator already extends to direct suppliers of the large supermarkets in the dairy supply chain. I have no plans to bring forward proposals to extend its remit.

The Adjudicator was created under the Groceries Adjudicator Act 2013 to oversee and to enforce the Groceries Supply Code of Practice. The Code applies to the ten largest grocery retailers in the UK; and governs their commercial relationships with their direct suppliers of food, drink and some household goods. It imposes on retailers an over-arching principle of fair dealing with their suppliers; and includes specific provisions governing terms of supply, the timing of payments, and commercial arrangements related to marketing and promotions.

The Code does not extend to pricing, which is the responsibility of the Competition and Markets Authority (CMA). The CMA can carry out investigations where there is evidence of abuse of a dominant position or market abuse.

Whilst the Government does not generally intervene in what businesses charge consumers for their goods and services, we do recognise the concerns over the current pressures on milk prices. That is why the Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs brought forward and chaired a meeting of the Dairy Supply Chain Forum last month. Members – including retailer representatives – discussed the recommendations made in the recent independent review of the dairy industry voluntary Code of Practice, one of which was to explore the possibility of expanding adoption of the Code within the supply chain to include retailers.

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