Suppliers are not using Supermarkets Code of Practice

Grocery retailers have been found to be largely complying with the Supermarkets Code of Practice, but the Office of Fair Trading (OFT) has warned that the Code is not being used effectively by suppliers to resolve their disputes with the big four players.

The OFT conducted a compliance audit, examining 500 supplier relationships with the UK's largest four supermarkets, Tesco, Asda, Sainsbury's and Morrisons, and found little evidence that the Code - which came into force in June 2004 - was being breached.

However, OFT suggested that the Code would be rendered largely ineffective 'without the use of mediation [being used] to resolve disputes', and that its success was dependent on suppliers using it for that purpose.

'The OFT believes that suppliers should overcome the fear of complaining and use the Code's dispute resolution procedure when they have concerns about their dealings with supermarkets,' said a statement from the regulatory body. Nevertheless, it suggested that changing the Code itself would be unlikely to tackle the problem.

The agency gave its approval to proposals for a voluntary Buyers' Charter designed to ensure that the supermarket and supplier relationship is conducted fairly, but some analysts remain sceptical of its chances of success.

'A proposal for a voluntary charter is welcomed by the authorities,but is this, in reality, any more likely to be adhered to than the Code?' said Seymour Pierce director Richard Ratner. 'All in all, it looks as if nothing much is likely to change, especially given that most of the suppliers are too frightened to complain. Plus ça change,' he said.