Asda is resisting pressure from the Office of Fair Trading to go to mediation under the supermarket code of conduct following a dispute with a supplier.

Without negotiation, 600 jobs will be lost as Asda follows though its plan to de-list ready meal supplier Ferndale Foods who sell 40m of ready meals to Asda each year.

The debate raises questions about the effectiveness of the Competition Commission’s practice of overseeing supermarkets’ deals with suppliers.

Asda notified Ferndale of its intention to cut the supplier loose in June, and has recently extended its original12-week notice period following pressure from the company.

Asda says the company had plenty of warning that it could be de-listed, and had as much as 18 months to change its operations.

The OFT has suggested that the decision to de-list should be suspended while mediation is in process, but Asda claims that delisting is outside the code of conduct’s jurisdiction.

The OFT said it is still trying to determine whether the code has been violated.