Ivan: 0:00

Hello and welcome to the Bench Report. You're listening to Amy and Ivan. Today, we're taking a look at the Groceries Code Adjudicator here in the UK, the GCA. We're digging into its powers, its impact, and some recent parliamentary discussions about fairness right across the food supply chain.

Amy: 0:19

That's right. We're using a recent debate in Parliament as our main source. It really shone a light on some tricky questions.

Ivan: 0:26

And our aim is to understand... You know, why the current setup is being questioned, how it affects producers and ultimately you as a consumer, and what changes people are talking about.

Amy: 0:36

It's fascinating how discussions in Westminster can connect so directly to, well, your weekly shop and the pressures farmers face. This isn't just dry regulation. It's about power dynamics in our food system.

Ivan: 0:47

Definitely. That debate painted a picture of... Quite a changing landscape. It talked about Britain once being this nation of shopkeepers.

Amy: 0:56

Lots of smaller local places to buy food.

Ivan: 0:59

Exactly. But now the sources describe a very different scene. It's dominated by just a handful of massive supermarkets. One MP even quoted the idea that the food chain is broken.

Amy: 1:09

And that concentration of power, it creates real imbalances. For you, the shopper, it often means less choice. You might feel you have to go to one of the big names.

Ivan: 1:19

Because the alternatives just aren't there sometimes.

Amy: 1:21

Right. And it pushes us towards that big weekly shop model.

Ivan: 1:24

Which could maybe make it harder to see the value in individual items when it's all one big total.

Amy: 1:30

Absolutely. Bulk buying and tactics like loss leaders, those super cheap items to draw you in, they can kind of mask the real costs and where the pressure points are further down the chain.

Ivan: 1:41

And there's the issue of waste, too, which came up.

Amy: 1:43

A huge issue. The sources mentioned studies suggesting maybe 20% or even more of the food people buy just gets thrown away, uneaten.

Ivan: 1:52

Wow. That's quite stark when you think about how squeezed producers might be.

Amy: 1:56

It is. And that pressure isn't just on shoppers. Producers, farmers, growers, they face immense challenges because often they have so few places to sell their goods.

Ivan: 2:05

The debate mentioned them feeling like a gun put to their head. That's strong language.

Amy: 2:10

It shows the feeling of powerlessness. And it leads to specific unfair practices the source has detailed. Things like orders being canceled suddenly, even when the produce is, you know, ready to go.

Ivan: 2:23

So they've done all the work, incurred the costs.

Amy: 2:25

And then the order disappears. Or supermarkets suddenly adding extra costs for marketing, maybe, or transport that weren't really agreed or seem out of proportion.

Ivan: 2:36

No, it's not just about the price they get paid. It's these extra hits, too.

Amy: 2:39

Precisely. It all squeezes their profit margins, making it incredibly hard to reinvest in their farms, buy new equipment, innovate.

Ivan: 2:46

And they're competing with imports too, right? Which might be produced a different standard.

Amy: 2:51

That adds another layer of pressure, yes. Imported goods might not meet the same environmental or welfare standards, potentially undercutting UK farmers who are meeting those higher standards.

Ivan: 3:01

It sounds incredibly difficult just to stay afloat sometimes.

Amy: 3:04

For many, it is. There was a striking example about potatoes, perfectly good potatoes being rejected just because they weren't the exact right shape or size for the supermarket specification.

Ivan: 3:15

Even though they're perfectly edible?

Amy: 3:16

Totally edible. It seems so wasteful and so unfair on the farmer. It really highlights that disconnect.

Ivan: 3:22

And when you think about key producing areas, the sources pointed to Lincolnshire, producing, what, 12% of UK food and high percentages of specific crops.

Amy: 3:31

Potatoes, veg, poultry, sugar beet.

Ivan: 3:35

You see how this pressure doesn't just hit one farm. It affects whole regions and our national food production capacity.

Amy: 3:41

Which naturally raises those bigger questions about food security resilience. Are we undermining our own ability to produce food? The calls for supporting British jobs, buying British, they really stem from this.

Ivan: 3:54

Some in the debate called it a kind of economic tyranny. It captures that sense of unfairness when a few players hold so much sway over something essential like food.

Amy: 4:02

Which brings us nicely to the body set up to deal with the groceries code adjudicator, the GCA.

Ivan: 4:09

Right. So what exactly is its role?

Amy: 4:11

It was set up in 2013. Its job is to enforce the grocery supply code of practice, basically. Rules for fair dealing between the biggest grocery retailers and their direct suppliers.

Ivan: 4:21

And biggest means.

Amy: 4:21

Retailers with over one billion pounds in annual grocery turnover. Currently, that's 14 retailers covering something like 97% of the market, according to the sources.

Ivan: 4:31

OK, so it covers most of the market share. But the debate suggested it hasn't really had the teeth people expected.

Amy: 4:36

That's the criticism. Despite being around for over 10 years, it's only done two major investigations under the code itself. Tesco back in 2015 and Co-op in 2018.

Ivan: 4:46

And no fines resulted from those?

Amy: 4:48

No fines under the code, no. For Tesco, the power to fine wasn't active yet. With Co-op, breaches were found, but the adjudicator decided it didn't merit a fine, though Co-op had to cover costs and compensate suppliers. The GCA can fine up to 1% of turnover, but hasn't used that power under the code. An investigation into Amazon is ongoing now, though.

Ivan: 5:09

Two investigations, no fines. It does make you wonder, what What were the specific limitations brought up in Parliament?

Amy: 5:18

Several key things. First, its scope. The code doesn't directly cover price negotiations, though fairness is required. Crucially, it doesn't cover indirect suppliers.

Ivan: 5:28

So farmers selling to a processor who then sells to the supermarket, they might fall outside.

Amy: 5:34

Potentially, yes. That's a major gap many see. Also, the ornamental sector, flower growers, for example, isn't covered. And there's no explicit protection for workers in the supply chain.

Ivan: 5:44

Okay, scope is one issue. What else?

Amy: 5:46

How proactive it is. The criticism is it mainly waits for complaints rather than actively investigating based on market intelligence. Though the minister did clarify it can launch inquiries itself.

Ivan: 5:58

But maybe doesn't often enough or doesn't get the info needed.

Amy: 6:02

Which links to maybe the biggest hurdle. fear of reprisal. Suppliers are apparently terrified that if they complain, the retailer will find out and they'll be punished delisted, basically.

Ivan: 6:12

So they just suffered in silence.

Amy: 6:13

That's the worry. There's this contrast between the GCA's service showing some satisfaction and the anecdotal fear MPs hear about constantly. Anonymity is a huge, persistent problem.

Ivan: 6:25

And resources. Is it equipped to take on these giants?

Amy: 6:28

That was another point. It has a small team, a budget around £2 million, funded by a levy on those 14 retailers. Compare that to the retailer's profits. Some question if it has enough clout. The cost of just one big investigation could potentially eat up its whole budget.

Ivan: 6:45

Right. Feels like an uneven match.

Amy: 6:47

That's the perception. But the discussion wasn't just about the GCA itself. It broadened out.

Ivan: 6:52

Things like pricing. We've all felt the pinch with food inflation, that 4.1% jump mentioned in the sources.

Amy: 6:59

Yes. And this connects to the whole greedflation debate. The concern raised was that wholesale prices, the prices farmers get, might fall or stabilize, but retail prices don't follow downwards as quickly.

Ivan: 7:10

So who's pocketing the difference?

Amy: 7:11

Well, the Competition and Markets Authority, the CMA, looked into this. They didn't find widespread abuse exactly, but they did flag a fundamental issue of fairness in the system.

Ivan: 7:20

An example of that fairness issue?

Amy: 7:22

The sources highlighted the CMA report on infant formula milk. They found manufacturers had raised prices way beyond cost increases, making high profits. The point made was the GCA didn't really pick up on this proactively. It needed a separate CMA probe, highlighting its limits on pricing.

Ivan: 7:39

And this is happening while big retailers and manufacturers are reporting really strong profits.

Amy: 7:44

That contrast was stark in the debate. Bumper profits, record executive pay, shareholder payouts alongside high consumer prices and struggling suppliers.

Ivan: 7:55

Someone used the phrase obscene spectacle.

Amy: 7:57

Yes. Talking about things like veg sold for 12p a bag way below the cost of production for the farmer. It just feels wrong.

Ivan: 8:05

And this pressure affects workers too.

Amy: 8:06

Absolutely. Pressure on costs fills Okay, so given this whole

Ivan: 8:20

picture, the power imbalance, the perceived issues with the GCA, pricing questions, the impact on people, what solutions were proposed, what are people calling for?

Amy: 8:29

A lot of ideas came up. A big one was strengthening the regulator. Either beefing up the current GCA or maybe even creating a new single regulator for the whole chain from farm gate to supermarket shelves.

Ivan: 8:41

A more joined up approach.

Amy: 8:42

Exactly. And expanding the scope, maybe lowering that one billion threshold to include more retailers, definitely bringing in food manufacturers, processors, the ornamental sector.

Ivan: 8:53

Giving it wider reach. What about powers?

Amy: 8:56

Calls for more proactive investigation powers, maybe even controversially some ability to intervene on pricing fairness like price floors for farmers. The idea of a broader food ombudsman also surfaced.

Ivan: 9:07

And tackle that fear factor

Amy: 9:09

crucial finding much better ways to guarantee anonymity and protect whistleblowers was seen as vital without that getting information is just too hard

Ivan: 9:17

more resources too presumably and better coordination

Amy: 9:20

yes arguments for more funding and staff and definitely better links between the gca dra and the new agricultural supply chain adjudicator ssca to avoid gaps and overlaps

Ivan: 9:31

any other ideas thrown into the mix

Amy: 9:33

a few others investigating private equity impacts boosting collective bargaining for workers maybe even a statutory right to food, and using regulation to actively shape the market towards, say, healthier or UK-produced food.

Ivan: 9:47

So a wide range of potential reforms being discussed.

Amy: 9:50

And timely, too, as the government is actually reviewing the GCA right now, so these points have a chance to be heard.

Ivan: 9:55

Well, this look at the sources really shows how concentrated power in the food chain isn't just abstract economics. It affects farmers, workers, your choices, your prices, even how much food gets wasted. It's also And it makes

Amy: 10:11

you think, doesn't it? The Wells governing how supermarkets deal with suppliers really shapes so much the sustainability of farming, rural jobs, worker welfare, what actually ends up on your plate. So what does a truly fair food system look like? And, you know, how much can regulation realistically achieve in getting us there? Something to mull over.

Ivan: 10:31

Definitely food for thought.

Amy: 10:32

Indeed.

Ivan: 10:32

As always, find us on social media at BenchReportUK. Get in touch with any topic important to you.

Amy: 10:37

Remember, politics is all about fairness. is everyone's business. Take care.