The Church of England has warmly welcomed the Competition Commission's decision to seek undertakings from grocery retailers to establish a Groceries Supply Code of Practice (GSCOP) Ombudsman, as set out in the report, 'The supply of groceries in the UK market investigation'.

In November 2007, the Church's Ethical Investment Advisory Group (EIAG) published its own report, 'Fairtrade begins at home: Supermarkets and the effect on British farming livelihoods'.

That report was produced in response to the concern of the General Synod, the Church's 'Parliament', about the doubtful viability of many farming enterprises given the squeeze on farm-gate prices.

It identified a number of invisible and pernicious practices of which the consumer was largely unaware and which had been accepted by farmers as a fait accompli as part of the price of doing business.

The Church welcomes the moves announced yesterday, and in particular moves to enforce fair supply chain practices. They go some way towards recognising the number of practices in the supply chain that undoubtedly affect the financial viability of some farmers, stifling business and innovation.

The Rt Rev Michael Langrish, Bishop of Exeter and Chairman of the Church of England's Rural Strategy Group said: "I am delighted with the measures included in this report. A strengthened Groceries Supply Code of Practice and an Independent Ombudsman to enforce the Code are exactly what I believe Britain's food producers require in order to be confident that they are being treated fairly.

"However, this report is also good news for consumers and retailers. If the recommendations are implemented then grocery retailers will know that they are all operating their businesses on a level playing field.

"In addition, consumers will be able to buy in the confidence that their choice of product will not have any hidden adverse effects on the agricultural community and that any special offers in the shops are genuine."

Dr Jill Hopkinson, National Rural Officer, said: "All suppliers, especially farmers, are due a fair price for a fair product. We are very pleased that the evidence collected directly from farmers has been taken so seriously by the Commission.

"We look forward to a Government announcement of a timetable for introducing an industry Ombudsman, with no watering down of powers, as a visible presence within the supply chain to arbitrate and determine outcomes."

And EIAG Secretary, Neville White, said: "The introduction of an expanded and strengthened Code of Conduct is especially welcome, as is the proposal to mandate an annual report of its operation.