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Give the Supermarket Watchdog Sharp Enough Teeth

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You would be startled if a supermarket tried to charge more than the sticker price at the till and shocked if they took extra money from your credit card several days after you went shopping. Supermarket suppliers, on the other hand, face these practices every day. And it's driving them to the wall. From struggling British dairy farmers to poor pineapple workers in Costa Rica, unfair supermarket tactics are destroying livelihoods around the world.

It seems outlandish to think that supermarkets demand payments from their suppliers just because their profits are less than expected. But this is only one in a long list of predatory practices uncovered by the Competition Commission during its investigations into food retailers' dizzying market power. From cutting supplier prices after an order has been delivered, to charging producers for losses incurred through shoplifting, the Commission showed that when it comes to exploiting suppliers, supermarkets don't lack for imagination.

As a development agency that supports poor farmers overseas, ActionAid appreciates the jobs and investment that supermarkets bring to developing countries. Around a million people in sub-Saharan Africa alone depend on the trade in fresh fruit and vegetables with British supermarkets.

But it doesn't always follow that the terms of this trade are fair and equitable. As Betserai Biti, a vegetable exporter from Zimbabwe told ActionAid: "Any way that we are treated unfavourably negatively affects our ability to make a profit and expand our business - whether it's by keeping prices low, or rejecting more product that should have been rejected, or putting products onto promotion at my cost." Unfair supermarket practices also make it much harder for him to pay workers enough to live on.

It's not just those who want a fairer deal for farmers that have an interest in stopping these practices. For environment campaigners, they make it harder for producers to invest in farming methods that protect eco-systems. The same goes for improving animal welfare. For corner shop-keepers, they give supermarkets an unfair advantage that can turf them out of business. And labour rights defenders know that by siphoning wealth out of rural areas, these practices leave a smaller slice of the economic pie for farm workers who desperately need decent wages.

One such worker, Gertruida Baartman, a fruit picker from South Africa, was so unhappy about conditions on her farm that she came to Tesco's AGM and spoke out about her situation, even though this put her job at risk. "I don't get paid enough to feed my children and I have to work with pesticides with my bare hands," she told the chief executive.

Happily for Gertruida, and millions of others who earn their living in supermarket supply chains, it looks like the bullying tactics will soon be a thing of the past, as today the government announced it will bring a 'Groceries Code Adjudicator' bill into parliament. While it may sound like the title of a second-rate action movie, the adjudicator has the more prosaic but important job of snuffing out unfair buying practices.

Cue howls of outrage from supermarkets, who are fighting hard to water down the legislation. They say it would push up food prices, a case that might sway shoppers whose living standards are being squeezed.

But those who've followed the story more closely know it's a flimsy argument, as the adjudicator would have no remit over day-to-day price negotiations between retailers and their suppliers: supermarkets will still be free to negotiate the best deals for shoppers. The government, meanwhile, believes that by encouraging suppliers to invest in their businesses, the adjudicator is likely to lead to lower prices for shoppers in the long run.

To date only one supermarket - Waitrose - has publically backed the adjudicator. It seems the company recognises that retailers also have an interest in setting up an industry watchdog, as it would prevent reckless buyers in one supermarket from undercutting responsible buyers in another, thereby ensuring retailers compete on a level playing field.

So will the adjudicator be able to rein in the mighty supermarkets? That depends on whether lawmakers fend off pressure from the retail lobby and give the watchdog sharp enough teeth to stamp out bad practice once and for all. While it won't be a panacea for all the problems that lurk in supermarket supply chains, the adjudicator would be a major step towards a fairer food chain that works for producers, workers, animals, the environment, small shops and supermarkets alike. Bring it on!

*The name of this farmer has been changed to protect their identity.

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