A Grocery Code Adjudicator will be introduced as early as next year to make sure retailers comply with the code of practice established in February 2009.
The CGA can act on information received by any supplier – anonymously if necessary.
Consumer minister Edward Davey said: “We want to make sure that large retailers can’t abuse their power by transferring excessive risks or unexpected costs on to their suppliers.
“These sorts of pressures are bad for producers and bad for consumers. Ultimately they can lead to lower-quality goods, less choice and less innovation.
“The adjudicator will be able to step in to prevent unfair practices continuing, ensuring a fair deal for producers and safeguarding the consumer interest.” Provision will be made in the legislation to allow retailers to face financial penalties, though the initial plan is to use publicity to expose transgressors.
Association of Convenience Stores chief executive James Lowman said the adjudicator “will prevent the worst abuses of buyer power in a marketplace that is so consolidated it presents a real risk to consumer interests”.
He added: “We need the government to move quickly now. It has been 10 years since the authorities first identified the risks presented by abusive practices.”