British government’s plans to introduce a supermarket watchdog were confirmed on 9 May 2012, with the inclusion of the Groceries Code Adjudicator (GCA) Bill in the Queen’s speech.

Under the new legislation, farmers and food processors will have more power when it comes to dealing with supermarkets and the GCA will ensure the fair treatment of supermarket suppliers.

The Department for Business, Innovation and Skills (BIS) said the bill establishing the GCA, which will oversee the Groceries Supply Chain Code of Parctice (GSCOP), is likely to receive an early introduction.

"It will address the market dominance of the large retailers and ensure suppliers are treated fairly and lawfully," BIS said.

"The GCA would address these competition issues by arbitrating disputes between retailers and suppliers, investigating anonymous complaints, and taking sanctions against retailers who break the rules."

Liberal Democrat MP for West Cornwall Andrew George, who chairs the Grocery Market Action Group (GMAG), said the announcement was good news for farmers, growers and consumers.

"After a decade of campaigning with GMAG and others I welcome today’s announcement. Though it is not before time," George said.

"The code is fine. But it’s like having a game of rugby with a rule book, but no referee! So the code needs an Adjudicator.

"The Government should now press on with its plans and create the watchdog to ensure fair trade runs through the supply chain from the farm to the shopping trolley."

Food and Drink Federation (FDF) communications director Terry Jones said the legislation to enable the appointment of a GCA will go forward in this session of Parliament to enforce the already established GSCOP.

"Together these measures will address the abuses of market power identified by The Competition Commission giving businesses especially small and medium sized manufacturers the confidence to innovate and invest which in turn secures choice and availability for the consumer," Jones said.

"As the Bill proceeds through both Houses, FDF will work to establish trade associations as providers of confidential information on behalf of their members.

Small suppliers need to be assured that they will not face retaliation from retailers for using the Code or speaking out about unfair practices."