There is no need for UK supermarkets to change how they deal with suppliers, a government watchdog has ruled.
The voluntary supply code for supermarkets was set up in 2002
Farmers' groups, organic organisations, and aid agencies had asked the Office of Fair Trading (OFT) to investigate the existing voluntary code.
They had accused supermarkets of being slow to pay suppliers, and having a stranglehold on the supply chain.
The OFT's decision not to change the voluntary Supermarkets Code of Practice "beggars belief", one supply body said.
As well as expressing shock at the decision, Breaking The Armlock - a consortium of farmers' groups and organic producers - renewed calls for OFT action.
"What we need is an independent watchdog and a moratorium on further takeovers by the big four supermarkets," it said.
"What we have got is a supermarket-friendly report which leaves farmers and independent shops hanging out to dry."
However the OFT rejected calls for an independent ombudsman to deal with suppliers' complaints.
And it added that the current way of doing business was "not designed to shield suppliers from hard bargaining driven by supermarket competition".
"Consumers are benefiting from competition in grocery retailing, and evidence has not come forward that the code is being breached, " said the OFT.
It had asked auditors to examine whether the big four of Tesco, Asda, Sainsbury's, and Safeway (now taken over by Morrisons) were violating the code, which was set up in 2002 to clarify the way they dealt with suppliers.
No disputes between suppliers and supermarkets have gone to mediation since the code was established three years ago, with critics saying this is because suppliers risk having their contracts cancelled if they complain.
But the British Retail Consortium, which represents supermarkets, said "supermarkets (are) observing the code, but suppliers are not making use of it".
However charity Action Aid said the OFT ruling "made a mockery" of its claim that it ensures fair dealing between the UK's biggest food retailers and their suppliers.
"There is nothing fair about the decision to ignore the concerns of farmers, consumer groups, environmental organisations and development agencies," it said.
Action Aid has tried to highlight what it says are the poor conditions of casual farm workers at some supermarket suppliers overseas.