Supermarket ombudsman bad for customers, says BRC

Customers would be the ultimate losers from an expensive and unnecessary supermarket ombudsman, said the British Retail Consortium (BRC).

Reacting to Conservative plans, announced today, to establish an ombudsman to oversee relationships between supermarkets and their suppliers, the BRC said the proposal revealed ignorance of how the market really works.

British Retail Consortium Director General Stephen Robertson, said: "This will harm customers. The last thing they need is a new multi-million pound bureaucracy - unnecessarily piling on costs and pushing up shop prices.

"The proposal reveals disappointing ignorance of how the market actually works. Very few farmers deal directly with retailers. Most supermarket suppliers are multi-national food businesses perfectly able to stand up for themselves. Retailers are right to defend customers' interests by negotiating robustly with them. In sectors such as dairy, where supermarkets have
set up direct relationships with suppliers, they are the best paying contracts in the market.

"Where's the evidence to support claims that retailers are unfairly putting the squeeze on their suppliers? There is already a supplier code, overseen by the Office of Fair Trading (OFT), which has long been compulsory for the ‘big four' supermarkets and is about to be extended to more retailers.

"OFT Chief Executive John Fingleton has said supermarkets are pro-consumer, bringing lower prices, innovation and new services and an ombudsman is not necessary. Any Government attempt to interfere in the running of the OFT by imposing on it an ombudsman funded by retailers would dramatically undermine its independence, as established in the Enterprise Act."