Watchdog for store giants 'will boost fairness'

A supermarketS ombudsman would bring "fairness and firmness" to the grocery supply chain for consumers and producers, MPs were told yesterday.

Labour's Albert Owen (Ynys Mon) said the creation of an ombudsman would help correct an "imbalance" identified by the Competition Commission.

Mr Owen told the Commons: "The purpose is to institute both fairness and firmness – fairness that a new code of practice will provide and firmness that a referee would bring to it.

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"The grocery market, like a game of rugby, is a very rough game. It needs a set of rules. But it also needs a referee to ensure those rules are adhered to by all sides."

Mr Owen was introducing the second reading of his Grocery Market Ombudsman Bill, which would set up an independent ombudsman to ensure "fair dealing" and enforce a code of practice.

The move follows growing concern about the power of the major supermarkets over food producers and suppliers.

It comes just two months after the Government announced it was accepting the Competition Commission's case for an ombudsman to enforce a code of practice and would consult on the proposal.

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Mr Owen denied he was "anti-supermarket", insisting: "In fact, I am pro-supermarket. I'm also pro-small shops, pro-local suppliers and pro-consumer."

He said setting up an ombudsman would help get the best deal for suppliers and consumers but acknowledged opposition from the British Retail Consortium and some leading supermarkets.

"I believe the momentum is going in favour of an ombudsman and the supermarkets will find they have nothing to fear from this."

Liberal Democrat Andrew George (St Ives) welcomed the Bill, claiming the supermarkets had "nothing to fear" from effective regulation.

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The question that needed to be examined was "when does effective, successful, clever, even creative use of market muscle become abuse of market muscle?".

Mr George said the ombudsman should be given the power to conduct independent investigations.

"At the end of the day, if the supermarkets have nothing to hide they have got nothing to fear from this."

Labour's David Drew (Stroud) backed the Bill and claimed there was a "culture of fear" among suppliers to the supermarkets if they complained about underhand practices.

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"Even the biggest suppliers do live in fear of what could happen to them. This is about the big guys who still fear the even bigger guys," he told MPs.

The ombudsman, like a referee, would bring "fairness and justice and transparency".

Tory spokesman John Penrose also supported the Bill but stressed: "What's being proposed is a mechanism to enforce and drive home fair dealing, not price-setting."

Mr Penrose said the Conservative Party was "in favour in principle" of the creation of an ombudsman but would not be giving a "blank cheque" to Mr Owen.

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But Shipley Tory MP Philip Davies, who worked for Asda before entering Parliament, said his party was "grossly mistaken" to support the creation of an ombudsman.

He said: "It's a depressingly familiar approach that we stand in this House pontificating about things that we have absolutely no knowledge of whatsoever."

Backing the Bill, Business Minister Rosie Winterton said Ministers were determined not to place "unnecessary costs" on business and this was why they were consulting on the scope and scale of the ombudsman's powers and the sanctions he or she could impose.

The consultation exercise will end on April 30 and the Bill provided a "sound basis" on which to proceed.

It was given a second reading by 44 votes to nil and now goes into committee.

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