To be effective, the supermarket ombudsman should be as aggressive as communications regulator Ofcom and "actively go out looking for trouble", the Liberal Democrats have urged.
Liberal Democrat shadow Department for Environment, Food and Rural Affairs (DEFRA) secretary Tim Farron warned that an ombudsman could be counterproductive if not implemented carefully. He was speaking at the National Farmers' Union (NFU) conference last month.
The last thing food manufacturers and producers needed was to give retailers an excuse to "pretend that they are being regulated", he said. "We want a proactive food market regulator that will constantly monitor prices and enforce the [Grocery Supply] Code of Practice (GSCOP)."
Consequently, the Liberal Democrats are calling for a food market regulator, rather than an ombudsman. An ombudsman would likely "only accept about one in 10 of the cases referred, and then only find in favour of the applicant in about a third of those cases", said Farron.
An ombudsman could also scare suppliers off, as they might fear putting "their head above the parapet", he claimed. "This does not strike me as being the sort of stuff that would make Tesco quake in its boots. Industry needs a regulator with real teeth, which will actively go looking for trouble like Ofcom and stand up to the big players in the market."
Farron said that, when shopping in a supermarket, many consumers might pay a premium for Fairtrade Columbian coffee, while simultaneously, they might unknowingly pay an unfair price for a pint of milk or other dairy products made in the UK. "We demand fair trade in Britain too ... and we want a regulator that has the power to make sure producers get a fair deal."
At the same conference, Hilary Benn, secretary of state for DEFRA, said the government was currently in consultation to work out the details of how a supermarket ombudsman should be implemented. He did not commit to a timetable.
Benn's comments were made a month after a new GSCOP came into force in early February. The code is intended to ensure that manufacturers and farmers are treated fairly by large retailers, including the major supermarkets. It aims to protect against practices such as big chains altering supply terms retrospectively or asking suppliers to fund promotions such as two-for-one deals.