A UK Supermarket Code of Practice was introduced in March 2002 to redress the balance between the big supermarkets and

their suppliers, including farmers. However, it was strongly criticised for being too weak and finally in February 2010 a new, stronger Grocery Supply Code of Practice (GSCOP) came into force. Crucially, the new government has committed to introduce an Ombudsman to proactively enforce the new Code and stop abuses of power. In 2004, 17 public interest groups representing farmers, the environment, consumers and workers, came together to form the Breaking the Armlock Alliance to demand a legally-binding Code of Practice and an independent, pro-active watchdog. 2004 review of the Supermarket Code of Practice by the Office of Fair Trading (OFT) found 80-85% of respondents claiming that the Code had failed to bring about any change in supermarkets' behaviour. The review revealed that supermarket practices had not changed significantly, and that the position of suppliers has become weaker. In May 2006, following public pressure, the OFT referred the UK grocery retail market for a fresh market investigation by the Competition Commission (CC). In its Statement of Issues the CC stated that it would look at supplier issues, particularly whether the behaviour of grocery retailers towards their suppliers threatens the economic viability of suppliers or wholesalers, affects competition in grocery retailing, and affects competition among suppliers, for example by limiting the range of products. The CC completed its inquiry and published its final report in April 2008. It found supermarkets are guilty of transferring unnecessary risks and excessive costs onto their suppliers. In its proposed remedies the CC recommended a new Groceries Supply Code of Practice (GSCOP) and the establishment of a new Ombudsman to police the Code. The Grocery Supplier Code of Practice (GSCOP) has been developed by the Office of Fair Trading (OFT) and is designed to protect suppliers from being bullied by the larger supermarket chains. The code applies to 10 UK supermarkets with annual sales of more than 1b. In the absence of voluntary agreement, and without the power to establish a funded authority itself, the Competition Commission recommended to the government (BIS) that it should establish an Ombudsman to "encourage free and fair competition. The new Code of Practice will be included in all retailers contracts with their suppliers which include an element of supply of groceries and provide a much clearer framework for these agreements. To ensure that suppliers do not have costs imposed on them unexpectedly or unfairly by retailers. The key aspects of the GSCOP including the main obligations of designated retailers are as follows: Payment for goods must be made in accordance with the relevant supply agreement, and in any case, within a reasonable time after invoice.

A retailer may not require a supplier to contribute to the retailers marketing costs unless provided for in the supply agreement; Retailers may not require suppliers to pay for shelf space, although payments may be allowable for promotions or new product listings, where the payments are proportional to the risk incurred by the retailer in stocking the new line; Retailers may not require suppliers to fund the majority of the costs of a promotion, and any promotion in which a supplier makes a payment must only be held after reasonable notice has been given to the supplier;

The Order and GSCOP is an improved regime for suppliers and provides a number of benefits: