UK: Supermarkets are damaging UK food industry, say farmers' unions – Fishupdate.com

UK: Supermarkets are damaging UK food industry, say farmers’ unions Published:  17 April, 2006

THE unchecked growth of supermarkets, and the misuse of their power, is seriously damaging the UK food industry, with consumers set to pay the price, farmers’ unions are claiming.

That stark message has been sent to the Office of Fair Trading (OFT) by the UK’s farming unions. In response to the OFT consultation on referring the grocery market to the Competition Commission for investigation, NFU Scotland, NFU, NFU Cymru and the Ulster Farmers Union have urged the OFT to ensure the scope of the inquiry is wide enough to address the central question of how supermarkets treat their suppliers. Stressing that a climate of fear now exists within the food industry, the UK farm unions have highlighted a catalogue of complaints about supermarkets which suppliers will not talk about for fear of supermarket reprisals or de-listing.

NFUS President John Kinnaird said: “As the major supermarkets have grown in power, their ability to abuse their suppliers has also grown. Ironically, having prided themselves on consumer choice, the trading tactics of the major supermarkets will ultimately result in less choice for shoppers as their suppliers are driven to the wall.

“We have spoken to supermarket suppliers across all food commodities. They are facing a financial squeeze that is crippling them and jeopardising the future of farm businesses, the first link in the supply chain.

“The Competition Commission was sufficiently concerned about this issue to demand a Supermarket Code of Practice after its investigation six years ago. But that Code has largely been a waste of time. Without offering protection to suppliers, virtually no-one has used the Code to complain at their treatment. Retailer demands for lump sum payments and sudden and imposed changes in payments terms are all now part of day to day life in the food industry.

“This cannot be allowed to continue. We are not against big business but we will take a stand against abuses of power where they occur. The first step must be a full investigation of the grocery market with no restrictions or limitations. For the sake of farmers, the food industry and, ultimately consumers, the growth in supermarket power and its consequences must be addressed.”

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