The Forum of Private Business (FPB) is responding to comments made by Iceland boss Malcolm Walker dismissing a new supermarket code of conduct and ombudsman as a "waste of time".
In an interview with the Daily Telegraph, Mr Walker insisted the company would "do the bare minimum" to comply with the revamped code. The code has been introduced today to protect small suppliers from the bullying tactics often employed by supermarkets.
He dismissed the practice of large retailers bullying small suppliers – and big suppliers bullying smaller retailers – as "a fact of life". The FPB strongly refutes the notion that this behaviour should be deemed acceptable.
"Malcolm Walker’s comments are extremely disappointing and reflect the common attitude supermarkets have towards their suppliers," said the FPB’s Chief Executive Phil Orford. "This bullying behaviour is simply bad practice and an abuse of their dominant market position. To attempt to normalize it is unacceptable.
He added: "Mr Walker goes on to admit the importance of supermarkets co-operating with suppliers in order to ensure the quality of the products they sell to consumers. Similarly, the old code of practice said large retailers should be ‘reasonable’ in their dealings with suppliers.
"But time and time again they are simply unreasonable in the demands they place on suppliers and fail to properly negotiate and co-operate with them. That is why a new, more robust code of practice and an ombudsman to enforce it are entirely necessary."
The Forum of Private Business (FPB) is writing to Mr Walker to express its concerns at his comments, and to invite Iceland to sign up to the Government’s Prompt Payment Code, which ha been launched to encourage big businesses to pay their small suppliers promptly.
The Groceries Supply Code of Practice (GSCOP) was drawn up following the Competition Commission’s two-year inquiry into alleged abuses in the groceries market.
Research carried out by the FPB shortly after the inquiry was launched found that 76% of respondents wanted a watchdog to oversee the GSCOP, which covers supplier issues such as late payment and retrospective pricing as well as consumer complaints.
In a separate survey 74% of business owners believed they should be guaranteed anonymity when giving evidence to both the Competition Commission and the Office of Fair Trading (OFT).
Last month, the FPB welcomed the code of practice and ombudsman but reiterated its call for more protection against supermarkets for small high street shops.
The Competition Commission recommended a ‘competition test’ for local planning authorities when considering applications for new stores. It has yet to be implemented. The FPB is concerned that the test will allow big brands to compete more effectively but do nothing to protect smaller shops.