The Office of Fair Trading requested a report from the FPC as part of its review of the code of practice for supermarkets' dealings with suppliers.

The FPC's conclusion was that the code could not ensure compliance with its undertakings because it is voluntary and relies on suppliers initiating the code's dispute resolution procedure.

The dispute settlement procedure has not been used, so it is unlikely that a legally enforceable code would be used by suppliers either.

Four supermarkets gave statutory undertakings to the government in relation to this code of practice, but some of the other supermarkets have adopted the code or an equivalent set of principles and practices as their own interpretation of best trading practice.

The FPC has therefore recommended that all supermarkets should adopt the code or an equivalent statement of best trading practice, which should be made available to their staff and suppliers.

It has received reports of issues of concern relating to trading practices a number of which are specific to the fresh produce industry.

The FPC recommendation is that an addendum to the Code addressing such issues should be developed for the produce industry. It also recommends that the code be extended to include intermediary businesses such as packers and distributors as well as primary producers.

The FPC has been asked to discuss on submission with the office of fair trade on April 28 and will report further after the meeting.

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