1. What’s wrong with supermarkets?
2. How will an Adjudicator help?
3. Won’t the Adjudicator push up the price of my weekly shop?

4. How much will the Adjudicator cost the taxpayer?
5. Isn't it wrong for UK authorities to meddle in other countries?
6. Isn’t the government usually on the side of big businesses like supermarkets?

ActionAid is concerned that UK supermarkets’ power over their supply chains, and therefore the millions of women who produce their goods in developing countries, has grown rapidly in recent years. This growth has not been matched by appropriate rules to govern how they act and protect the basic rights of women workers.

Supermarkets are demanding lower prices, faster delivery times, and greater flexibility from suppliers. ActionAid has seen first hand the impact on the poorest workers when supermarkets wield this power.

After running a two-year inquiry into supermarkets, the Competition Commission found that big retailers consistently use practices like:

• delaying payments to suppliers – a practice that can push small companies out of business, and people out of work;
• reducing the agreed price of an order after it’s been delivered;
• requiring payments from suppliers when supermarket profits are not as big as expected;
• requiring suppliers to contribute to the cost of opening a new store;
• changing orders at the last minute – for example, demanding different packaging and forcing suppliers to pick up the cost.

These and other unfair practices used by supermarkets can damage farm businesses, and make it extremely difficult for the workers who pick and pack our food to improve their pay and conditions.  

British supermarkets buy huge quantities of goods from farms in the developing world. This brings vital trade and jobs. At the same time, unfair trading practices take money away from producers and workers in poor countries and transfer it to retailers in rich countries. 

The Adjudicator would monitor and enforce a code of practice designed to prevent unfair trading practices. If a supermarket breaches the code, suppliers will be able to notify the Adjudicator – including farmers in poor countries. 

The Adjudicator could then investigate the case and – if it found in favour of the supplier – publically ‘name-and-shame’ the supermarket, and make specific recommendations to the retailer to change its behaviour. If the supermarket didn’t comply it could be referred to the Office of Fair Trading, which has the power to take stronger legal action.

By stopping these practices, the Adjudicator would help farmers and exporters in poor countries build stronger businesses, and relieve some of the pressures that prevent improvements to poverty pay and poor conditions for workers. The Adjudicator would also ensure that British shoppers continue to enjoy a wide choice of good quality products, and is likely to result in lower prices in the long run.

Supermarkets are simply scaremongering when they say prices will go up because of the Adjudicator. 

• The Competition Commission has said it will cost supermarkets around £3 million a year to fund the Adjudicator. This is a tiny sum compared to the approximately £5.5 billion in profits made by the top five supermarkets last year, and an overall UK food industry worth around £150 billion.
• The Adjudicator would not bother supermarkets who trade fairly with their suppliers, so for these companies there’d be hardly any costs to pass on to shoppers.
• The Adjudicator would not decide prices between supermarkets and suppliers, so supermarkets would still be free to secure the best deals they can for consumers. 
• The Adjudicator is designed to make it easier for suppliers to invest in their businesses, and come up with better production processes. Not only would this improve choice and quality for shoppers, the Government believes this could also lead to lower prices in the long run.

The Competition Commission has said the Adjudicator will cost between £4 million and £5.5 million a year to run, with £3 million of this coming from supermarkets. This leaves between £1 million and £2.5 million to come from taxpayers. 

ActionAid is acutely aware that at a time of spending cuts and job losses, some people would like to see this money spent elsewhere. But it’s a tiny outlay that, by encouraging suppliers to invest in their businesses, will allow smaller companies to thrive, help preserve and create jobs, and prevent the job losses that happen when supermarket buying practices push supplier companies into bankruptcy.

The Adjudicator would regulate British supermarkets, not suppliers in other countries. This would benefit overseas suppliers, not interfere with them. Governments in developing countries have the main responsibility for ensuring workers’ rights are respected. But when supermarkets buy goods produced in poor countries, they should ensure their own business practices don’t make it harder for suppliers to ensure decent pay and working conditions. We have a responsibility to ensure UK companies act responsibly around the world, so the UK’s ethical footprint is one of decent work and conditions for people.

The Government has said it intends to ensure the watchdog has enough powers to stop supermarkets from unfair trading practices. These include making sure the Adjudicator can get from supermarkets all the information it needs to do its job properly. The Government has also said the Adjudicator would allow suppliers – including farmers in poor countries – to make complaints anonymously. However, there’s always a danger that the Government may cave in to supermarkets that want to weaken the rules, which is why we need to keep the pressure up.