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Limiting powers of supermarkets up to consumers

Whoever wins the election, the writing is on the wall for the supermarkets, with both Labour and the Conservatives now signed up to the idea of an ombudsman to police the relationship between the sector and its suppliers.

The “enforcer” will rule on breaches of a code of practice — in theory preventing those nasty giant supermarkets from driving hard-working small businesses (think vulnerable farmers) into the ground.

It's a nice idea, but what difference will the plans make? After all, we've had a code of best practice governing relations between the supermarkets and their suppliers for some time, but operating on a voluntary basis. Not a single grocer has ever been found to be in breach of it. So the supermarkets are all thoroughly decent folk, or the rules aren't up to much. Either way, making the code compulsory isn't going to make much difference.

The Government itself insists that its proposals aren't going to have much impact on the prices that consumers pay in the shops. In which case, why is it bothering? Does it imagine, somehow, that the supermarkets are going to take the hit from the ombudsman's rulings as it tries to protect suppliers? No, the Government is right because there isn't going to be a hit.

The difficulty with this industry is that the competition to supply it is so cut-throat. Suppliers to grocers are prepared to accept whatever terms of business they are offered. And for each one that says no, there are several more prepared to step into the breach.

The responsibility for that lies not with the grocery sector itself but with consumers. If everyone who claimed to support small butchers, bakers and candlestick makers got round to shopping on their local high street occasionally, rather than trouping out to massive supermarkets, the grocers might not be so profitable.

There has been a degree of cynicism about Google's threat to withdraw from China, with the company's critics pointing out how little money the search engine makes there. Of Google's $22bn revenue last year, just $210m came from China, estimates the researcher Analysys International. With Google earning less than 1% of its money in China, pulling out is no great blow, you might say, especially given the credit it will earn from the gesture in many other parts of the world.

That is unfair. If Google really isn't bothered about doing business in China, why has it been prepared to take so much flak in recent years on its willingness to self-censor in the country? The company's stance on China has been the single biggest threat to its reputation as a force for good — hardly a price worth paying if this market isn't important to Google.

No, Google recognises that China, with 300m internet users, has massive potential. It has made great strides in the country — last year's revenues may have been small in comparative terms, but they were 10 times larger than the sales Google made in 2006.

Moreover, while Baidu, China's domestic answer to Google, remains the biggest internet search player in the country, Google is catching up fast. In the first nine months of last year, Google averaged a market share of 30% to Baidu's 62% and is thought to have reached 35% versus 58% in the final quarter. The comparative figures in 2006 were 15% for Google and 50% for Baidu.

In these times of disenchantment with big business, assuming the worst about a company's motivations is all too tempting. But on this one, we should give Google the benefit of the doubt.

Belfast Telegraph