Tesco crisis: A watchdog with no teeth is no use at all

Outlook As the Tesco scandal sees gruesome details emerge of the oft-antagonistic relationship between big grocers and their suppliers, perhaps now is the time to reassess the last round of legislation on the industry.

The Competition Commission, when it probed the supermarkets after receiving floods of complaints about their behaviour, recommended in 2008 that the grocers set up and fund a powerful independent ombudsman to keep the peace. But the big retailers refused to countenance such a beast.

In the face of that inaction, the government passed legislation to set up an alternative instead. That sounds great, but the watchdog the suppliers got was only an “adjudicator”, not an “ombudsman.” Many suppliers say its powers are watered down. Thanks largely to the retailers’ sustained protests, it only got launched last summer – a full five years since the Commission’s recommendations. The recent annual accounts do not bode particularly well.

For example: how many staff do you think this watchdog might have to take on this £175bn-a-year market? Fifty? Sixty? Er… five. Three of whom, including the adjudicator herself, are part-timers.

How big is its baddie-busting budget? £450,000 a year.

And here’s the acid test: how many investigations have its crack team launched so far? None. And how many adjudications from this Groceries Code Adjudicator? None, although it has had two requests.

I wondered if these accounts, being for the year to March, might be out of date. So I phoned to see how things had progressed. One of the two full-timers picked up. Her answers: no, still no investigations, nope, still no adjudications and, er... yes, still only two requests. Busy summer, then? I asked. Yes, it has been busy, actually, but we can’t act unless we’re given evidence, she tells me.

And here’s the rub. None of this is their fault. Even if they had the resources, which they clearly don’t, thanks to the legislation that spawned their organisation, they lack the muscle to do the kind of spot checks that, say, the Financial Conduct Authority does. Instead, they have to wait until a supplier lodges a complaint. But suppliers are terrified of the supermarkets, and are reluctant to complain, even anonymously, for fear of losing business.

Unless we can give it teeth, and more cash, perhaps we should take this watchdog back and get a new one before the guarantee runs out.