Doubts cast over grocery ombudsman

The Competition Commission’s consultation on an ombudsman, designed to draw up a scheme with the agreement of retailers, ends next Thursday. A source familiar with the situation said it was unlikely that a voluntary solution would be reached. In that event, the Commission would recommend that the Department for Business Enterprise and Regulatory Reform (BERR) should impose an ombudsman.

However, one source said that the Government was not “honour-bound” to act on any recommendation. Ongoing political and economic turmoil, combined with the Government’s general preference for light-touch regulation, may mean that the ombudsman scheme is put on the back-burner.

He said: “The general trend is for less regulation. You need regulation when it’s an industry with very high margins or that’s uncompetitive, and that’s not the case.”

The proposed establishment of a grocery ombudsman was proposed after an inquiry into the grocery
sector that took more than two years. An ombudsman, which would be appointed by the Office of Fair Trading, would arbitrate retailer-supplier disputes and hear complaints about alleged breaches of the grocery code of practice. However, retailers believe it would prove costly and safeguard the suppliers’ interests over those of consumers.

A Competition Commission spokesman said: “We are sure if it comes to us making a recommendation, then they [BERR] would treat it with the seriousness that it warrants, given the proposal stemmed from evidence collected during a comprehensive two- year investigation.

“The ombudsman will be there to intervene when there are problems and will be a light touch for those retailers who have good relationships with their suppliers.”