Retailers condemn DTI over code delay

Leading supermarket groups are growing increasingly impatient at continued delays by the Government to publish a code of practice for stores.

The code was prompted by a two-year Competition Commission report into supermarket profitability, and it sets out rules for the stores about doing business with suppliers, including farmers and food manufacturers.

The draft aims to prevent major supermarket chains – those with a market share of about 8 per cent – from using their buying power to force unfair contracts on suppliers.

The code is thought to include rules that would ban supermarkets from charging suppliers for displaying their goods in prominent positions. Supermarkets would also be prevented from forcing suppliers to pay towards the cost of promotions, such as "buy one, get one free".

The final draft of the code was agreed between John Vickers, the director-general of Fair Trading, and the four major supermarkets, Sainsbury, Tesco, Safeway and Asda, who will be legally bound by it. The code was received by the Department of Trade and Industry (DTI) at the end of June. Nothing has been heard of it since. "All of us are getting a bit fed up with the continued uncertainty," said the Safeway spokesman Kevin Hawkins. "We would like the DTI to come out with the code and a clear timescale for implementations."

There are also questions over whether the extended uncertainty is due to internal debate about the toughness of the draft on retailers and whether the result will be a stricter code of practice. "The delays suggest a real debate is going on at civil service level about the strictness of the code," said one retail sector source. There was a desire to avoid returning to negoti-ations with the OFT, he said.

Tesco would welcome the arrival of the code as soon as possible, and particularly before the preparations start for the Christmas rush. The supermarket said it would be more difficult to find time to hire and train staff during this period.Sainsbury and Asda said they are waiting for the final version, or another draft version. But the timing of the announcement is down to the DTI.

The code is not expected to receive a universal welcome. Many small businesses and farmers are thought to be dissatisfied with the draft and think the code will not be strict enough on the supermarkets.

Some retailers are also dissatisfied that the new code of practice will include only the top four retailers. "We feel that it is an inconsistency that the code should be legally binding on the top retailers but voluntary on the others, despite their significant business with many small suppliers," said Dr Hawkins. The DTI refused to comment about what is happening to the new code, but said it was in the hands of Patricia Hewitt, the Secretary of State for Trade and Industry.

"It is not a standard procedure and there aren't statutory targets on timescale," said a DTI spokeswoman. "It is a difficult and complicated issue.

"We want to make sure we get it right and are hoping to be able to take it forward in the autumn."