UK Groceries Code comes into force

The UK's farmers are thought to be "delighted", as today saw the introduction of the new Groceries Supply Code of Practice.

Under the Code, practices such as altering supply terms retrospectively, or asking suppliers to fund promotions such as two-for-one deals, are outlawed.

For years, farmers and suppliers in the UK have been complaining of unfair dealings and unreasonable demands from the major supermarket chains. The new rules will give them access to independent arbitration and potect them from these and similar practices.

The Code is being reulated by the Office of Fair Trading, which is requiring retailers to train staff to use the code and to appoint compliance officers.

The new framework covers the 10 biggest grocery retailers in the UK - those with annual sales in excess of GBP1 billion. The old rules covered only the four largest grocery retailers.

Later this year, the UK is due to introduce an ombudsman for the sector. Farmers have said that this additional measure is absolutely necessary. Retailers, however, have dismissed it as unnecesssary, adding that it will simply add to bureaucracy.