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Trade Bodies Unite to Urge Statutory Grocery Ombudsman
29 May 2009
Trade organisations representing local shops and wholesalers have called on the Competition Commission to act swiftly and decisively to introduce an Ombudsman to tackle excessive use of buyer power by major grocery retailers. The Commission’s Grocery Market Inquiry found that such an Ombudsman was necessary to prevent damage to suppliers and to the consumer, yet since the publication of their report in April 2008, the Commission’s progress towards introducing an Ombudsman has been extremely slow. The Scottish Grocers’ Federation (SGF), ACS (the Association of Convenience Stores), the Federation of Wholesale Distributors (FWD), and the Northern Ireland Independent Retail Trade Association (NIIRTA) have today submitted comments in response to the Commission’s latest consultation on this issue.
SGF Chief Executive John Drummond said: “We are concerned that the slow rate of progress in bringing about an Ombudsman presents a risk to consumers – as it is their interests that the recommendation for an Ombudsman and Grocery Suppliers Code of Practice were designed to protect. We believe that the major multiples will not voluntarily agree the terms for creating an Ombudsman, and that it is time for the Commission to move towards introducing an Ombudsman through primary legislation.”
James Bielby, Chief Executive of the Federation of Wholesale Distributors, said: “It is tough for wholesalers to compete on price in the face of abuse of suppliers by the multiple supermarkets identified by the Competition Commission inquiry. A strong ombudsman is needed to enforce an effective code of practice to prevent this abuse, and take a step towards a fairer grocery market, not just for wholesalers and suppliers, but ultimately for consumers as well.”
Introducing an Ombudsman on a statutory footing would bring the following benefits:
• the possibility of punitive fines for breach of the code
• more extensive powers of intervention
• making compliance with a Grocery suppliers Code of Practice a direct obligation
The Commission’s report highlighted the consumer detriment caused by the buying practices included in the Code of Practice, which were primarily due to the transfer of excessive risk and unexpected costs to suppliers, for example:
• the potential for suppliers to increase costs to retailers other than the largest
• the removal of planned promotional activity from smaller customers due to unexpected demands from larger customers
• the shelving of plans to introduce new products into other retail channels
Scottish Grocers Federation Tell MSPs that Plans to Ban the Display of Tobacco in Shops are Not Supported by Compelling Evidence
20 May 2009
John Drummond, Chief Executive of the Scottish Grocers’ Federation (SGF) has given evidence to the Scottish Parliament’s Health and Sports Committee as it scrutinises the Tobacco and Primary Medical Services (Scotland) Bill at Stage 1.
During a round table discussion with MSPs and representatives from organisations including the Tobacco Retailers Alliance, BII Scotland, Sinclair Collis Ltd and FOREST, John gave the view of convenience stores to issues including a tobacco display ban, a national registration scheme and fixed penalty notices.
Opening the discussion Mr Drummond said,
“ I would like to start with a quote from John Key, the Prime Minister of New Zealand, which encapsulates our position -: ‘The lack of international evidence (to support a display ban) does not justify the burden this would place on small shops’. Two issues are included therein a) The lack of evidence – good legislation requires sound and compelling evidence, therefore this is bad legislation b) the disproportionate cost to our members in complying with the measures in this Bill, in many cases, a major refurbishment of the store, which will result in many millions of pounds for the Scottish convenience store sector.”
Speaking after the evidence session John Drummond said:
“This was an opportunity to express our concerns with the measures in the Bill. We do not believe this Bill will address the illicit trade in tobacco and measures that could make a difference including education, deterrents against adults that knowingly purchase tobacco for youngsters and ensuring Trading Standards have the appropriate resources to tackle the black market have been overlooked.”
National Minimum Wage – Not the time for an increase in costs
12 May 2009
The UK Government has announcement that from the 1st October 2009 the National Minimum Wage (NMW) will increase by 1.2%. This will mean that the adult rate NMW rate will increase from £5.73 per hour to £5.80.
John Drummond, Chief Executive of the Scottish Grocers’ Federation (SGF) said:
“Whilst this is a more realistic rise in the NMW compared to previous years it is still an increase in costs for small retailers already struggling with escalating levels of regulation and bureaucracy while in the grips of a recession.
“A survey of SGF members conducted earlier in the year unanimously supported the national minimum wage remaining at its current level until the economic situation improved.
“For many small retailers, this increase combined with the effect of a recession and its impact on customer footfall, has left them with no alternative but to review staffing levels and to consider a reduction in hours and in the worst case scenario redundancies.
“Many convenience store owners earn less than the minimum wage as they have no alternative but to work the additional hours themselves. A 60 to 65 hour working week is not uncommon for a convenience store owner.”
Scottish Grocers Federation