A ministerial roundtable on abusive supply chain practices and how to stop them

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On Tuesday 9th March, Julian Sturdy MP coordinated a group of cross-party MPs and representatives of civil society to meet with the government ministers who are looking at the role and remit of the Groceries Code Adjudicator (GCA).

Small business minister Margot James and farming minister George Eustice heard about the unfair purchasing practices that persist in the groceries sector. Farmers, processors and exporters – both in the UK and abroad – want to get healthy, affordable food onto our shelves. However, in selling groceries many of these businesses are exposed to unfair risks and costs, making day-to-day operations difficult and unpredictable.

MPs proposed the extension of the remit of the GCA as the best way to provide support to businesses selling food into supermarket supply chains.

What are the problems?

In the first part of the meeting, two farmers presented their experience of selling dairy and livestock to processors, highlighting the unfair purchasing practices that persist in the parts of the groceries supply chains that aren’t covered by the Groceries Code Adjudicator. This included unilateral deductions to invoices and short notice changes to pricing, making it impossible for the farmers to predict their income and therefore hampering their ability to employ, invest and innovate.

Shivani Reddy from the Fairtrade Foundation and Tom Wills from Traidcraft noted that the unfair sharing of risks and costs along a supply chain is also experienced by producers and exporters selling fruit, vegetables, nuts and other tropical commodities to the UK from overseas.

Another issue, described by Christine McDowell from the National Farmers’ Union, is that the flowers and plants sector is not covered by the GCA at all. Growers, both in the UK and in some of the big flower exporting countries such as Kenya, therefore have no protection from abusive purchasing practices despite the many similarities between flowers and other perishable products such as horticulture.

What needs to be done

The MPs (Julian Sturdy, Mark Williams, Dr Paul Monaghan, Neil Parish, Albert Owen) had called the meeting to ask ministers to extend the remit of the GCA.

The GCA is already having a significant impact on the relationship between the UK’s biggest supermarkets and their direct suppliers: an extension of its remit would allow the GCA to use its insight into the food sector and the trust that it has built up to drive better purchasing practices amongst other parts of the supply chain too.

Concluding thoughts

The Groceries Code Action Network, a group of membership organisations, ethical investors, services sector and civil society organisations, have been pushing for some time for the extension of the GCA to support fair trading relationships in groceries supply chains. Having presented our case to the relevant government ministers, we look forward to seeing how the government chooses to respond to the Call for Evidence that closed on 10 January when they release their response, and to continuing to work with a cross-party group of MPs looking to ensure a fair deal for the farmers and workers that produce our food.