The Competition Commission's long-awaited report on supermarket buying power has laid the foundations for the scrapping of the third-party rebate scheme. Until now, printers have had to pay up to 10% of a contract's value back to the supermarket.


In an attempt to improve relations between supermarkets and their suppliers, the report has recommended that a legally binding Code of Practice be drawn up within three months. The Commission stipulated that within the Code the third-party rebate scheme should be abolished.


"It's about clarity and honesty of the contracting process," said BPIF director of corporate affairs Mike Hopkins. "Printers are under no illusion that supermarkets will continue to drive a hard bargain, but at least this way they will be able to pay the price that they are given."


In response to the report, a Sainsbury's spokesman said that the firm had a strong commitment to its suppliers and that it would comply with the Commission's demands to draw up such a Code.


MY Holdings chief executive John Monks said that the rebate scheme was confusing for everybody in the packaging industry because no-one knows the true price. "I will be very pleasantly surprised if the supermarkets don't find an alternative way of enforcing the third-party rebate scheme," he said. "He who gives most, gets the most," he added.


Monks also said that it was often suppliers and printers who bore the brunt of grocery price cuts. "Printers are stuck between major packaging producers and major users - supermarkets won't accept a price increase in packaging," he said.


Story by Jeremy Allen