The announcement that the Department for Business Innovation and Skills (BIS) has accepted the Competition Commission’s recommendation for a body to enforce the Groceries Supply Code of Practice (GSCOP) has been warmly welcomed by the Bishop of Exeter, the Rt Rev Michael Langrish, and the Chairman of the Church of England's Ethical Investment Advisory Group (EIAG), John Reynolds.
The EIAG published 'Fair Trade Begins at Home; supermarkets and the effect on British farming livelihoods' in 2007, which documented the harm inflicted on farmers and agricultural businesses by the buying practices of supermarkets.
However, the church continued to maintain large shareholdings in several supermarkets, including Tesco (£27m) and Wal-Mart (£13.9m) which owns Asda.
Tesco in particular has been the subject of campaigns by groups such as Friends of the Earth for its damaging effect on local communities, smaller retailers, suppliers and consumers. The Church has also been criticised for lending legitmacy to the unethical behaviour of such supermarkets by seeking to profit from them.
The Church claims that its investments give it leverage to change the behaviour of supermarkets. Its investments however, did not have a bearing on supermarket practices in this instance. The EIAG's findings, submitted to the Competition Commission enquiry which reported in 2008, instead directly contributed to three of the Commision's final recommendations.
Bishop Michael Langrish said: "I very much welcome the fact that the government have finally indicated that they will take steps to enforce the Groceries Supply Code of Practice. The forthcoming consultation will be key to ensuring the creation of an ombudsman. The need for effective enforcement of the Groceries Supply Code of Practice remains as urgent and necessary now as when the recommendation was made by the Church's Ethical Investment Advisory Group in 2007. I very much hope that this indication of support will be translated into action to create an ombudsman post as quickly as is practically possible."
John Reynolds said: "The Ethical Investment Advisory Group has long been concerned about supermarket practices around the areas of labelling, promotions, payments and contracts, all of which have caused real harm to farming livelihoods. We have raised the issues with the government, opposition and the supermarkets whose shares the Church investing bodies hold. We are delighted that the creation of an ombudsman at last seems a real possibility. The post must now be established as soon as possible and we hope that the supermarkets will engage constructively with government in the light of the BIS announcement."
However, campaigners remain concerned about many other practices of supermarkets such as Tesco.
Last year, War on Want criticised Tesco for paying 7p an hour to garment workers in Bangladesh whilst its shareholders were rewarded with record £3 billion profits. However other campaigners did achieve a victory earlier this week, getting Tesco to double the amount of faitrade cotton school uniforms they stock.
Friends of the Earth has also called for a cap on the retail floorspace of superstores and for local authorities to consider more carefully the impact of out-of-town developments on businesses in town centres before granting planning permission.
The Church of England has been pursuing an investment strategy which involves selling its social housing and investing instead in out of town retail parks over the last two decades, in order to pursue its stated strategy of maximising profit.
Yesterday the Church's over exposure to equities in the pursuit of profit was examined by the Financial Times.