Patricia Hewitt, trade and industry secretary, has announced that she has accepted undertakings from the four leading supermarkets to abide by a code of practice drawn up by the director general of fair trading in October. The code was devised as a response to problems identified by the Competition Commission in its monopoly report on supermarkets and their dealings with suppliers earlier this year.
Only those supermarkets with a market share greater than eight per cent have been asked to give undertakings to respect the code. The four retailers are Asda, Sainsbury's, Safeway and Tesco. Somerfield has indicated that if its market share rises to the threshold level, it too would be prepared to sign the undertaking.
The director general of fair trade will monitor the code's operation and dispute resolution procedures form an important part of the code.
Other key elements are that supermarkets will have to give advance notice of changes in arrangements with their suppliers or be prepared to compensate them.
The code becomes effective from March 17, 2002.
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