Shoppers Want Action to Stop Superstores Squeezing Farmers

By STEVE DUBE Western Mail

Four out of five adults want new rules to protect farmers in their dealings with the big supermarkets, a new survey shows. And nearly two-thirds think that British farmers are not being paid enough for the food they produce. The NOP poll released by Friends of the Earth marks the fourth anniversary of the Supermarket Code of Practice, introduced in 2002 to ensure that supermarkets treat their suppliers fairly.

FoE commissioned the survey on behalf of the Breaking the Armlock Alliance, a group set up to campaign for a stronger statutory code. The alliance is a diverse range of organisations including environmental groups, farmers and the Women’s Institutes.

Sandra Bell, FoE supermarkets campaigner said the survey, carried out on March 10-12, was a clear message to the Government that the British public cares about farmers and wants action to stop them being bullied by the big supermarkets.

‘It seems that shoppers understand better than the Government that it’s hard for farmers to produce high quality food and protect the environment if they are being constantly squeezed on price,’ she said.

‘Campaigners have been telling the Government and the Office of Fair Trading for the last four years that the weak Supermarket Code of Practice is not working – perhaps now they will listen.’

The Supermarket Code of Practice was introduced in 2002 following the last Competition Commission investigation into supermarkets which reported in 2000.

This found that the biggest supermarkets engaged in unfair trading practices with their suppliers and that this threatened choice and quality of goods to consumers.

Although the Competition Commission recommended a tightly worded code this was watered down and the version that was agreed by the supermarkets in 2002 was so vague that it is generally considered of little value.

Farmers and other suppliers have repeatedly told the competition authorities that the code does not work but when the Office of Fair Trading did a review of the Code it failed to strengthen it.

One problem is that suppliers are too scared of losing their contracts with the big supermarkets to speak up, so the OFT says it has not got clear enough evidence of the code not working.

The survey, GfK NOP Consumer Omnibus, involved a telephone survey of 1,000 adults aged over 15.

Only 16% believed that British farmers received a fair price for the food they supply to big supermarkets, with 65% disagreeing and 20% unsure.

Only 10% opposed the Government bringing in rules to protect farmers, with 81% in favour and 9% saying they did not know.

Last week a report from the Office of Fair Trading proposed a new Competition Commission investigation into supermarkets.

The watchdog found pricing tactics that could distort competition and the use of ‘land banks’ to stifle competition by preventing rival retailers opening outlets.

The OFT found that some supermarket chains will sell their land only to buyers who won’t build competing stores.

Some supermarkets denounced any inquiry as ‘unnecessary’ because the OFT’s inquiry showed that consumers benefited from lower prices.

Any Competition Commission inquiry would look into the entire UK grocery sector and could take up to two years to complete, but it would not necessarily address the issue of how farmers were treated.

The Breaking the Armlock Alliance, which includes the Farmers’ Union of Wales, the Soil Association and Farmers for Action, welcomed the Competition Commission’s involvement but warned that if it took years to find a solution, many more farmers would leave the land, and many more local independent shops and the wholesalers who supply them will go to the wall.

A stronger statutory code could be implemented quickly and help to ensure that suppliers were treated fairly.

The Alliance also wants an independent retail regulator to be appointed to oversee the code, as recommended recently by the All- Party Parliamentary Group on Small Shops.

Friends of the Earth says squeezing British farmers more and more on prices makes it harder for them to operate in a way which benefits the environment.

For example, rock-bottom farm-gate prices for milk has forced many dairy farmers to intensify, which leads to increased pollution. Other farmers are being forced out of business – and the more farmers that are lost, the more food that has to imported across large distances, increasing environmental pollution.

There are also concerns that price pressure on organic farmers has discouraged farmers from converting to organic production.: Supermarkets pledge:Wales Under-Secretary of State Nick Ainger has promised to urge Government ministers to extend the supermarket code to safeguard farmers’ livelihoods.

The undertaking followed a meeting last Thursday with a delegation led by Roger Williams, Welsh Liberal Democrat MP for Brecon and Radnorshire.

The delegation included Welsh Liberal Democrat Leader and Montgomeryshire MP Lembit Opik, Ceredigion MP Mark Williams, Prydderch Rhys of the Farmers’ Union of Wales, and Huw Thomas of NFU Cymru.

Roger Williams said the delegation raised a range of issues from bovine TB and the future Tir Mynydd payment to supermarket power.

‘This is a vital time for Welsh agriculture. Welsh farmers are under immense pressure, and it’s essential the Government is made aware of the problems we face and the action it can take,’ he said.

‘We put it to the Minister that if farming in Wales is to remain sustainable, supermarket power has to be curbed.’

He said the voluntary supermarket code of conduct, was ‘as much use as an umbrella in a hurricane’ and called for a new tougher, and legally binding, regulation.

Prydderch Rhys, of the FUW, said Tesco’s own figures showed that the price of food had decreased by 2.8% a year for the past five years.

‘It’s the farmers who bear these costs. The current system is squeezing the life out of Welsh farming. The supermarket code of conduct needs to be on a statutory footing, and needs to cover issues like the length of the food chain, not just direct suppliers to the supermarkets,’ he said.

Meanwhile the National Beef Association warned of further damage to the sustainability of the beef sector by yet more price reductions in supermarkets.

‘In just four weeks over February there was a 3.5% drop in the overall average price of all lean mince streams sold in Tesco, Asda, Sainsbury and Morrisons and a 7.5% plunge in the value of rump steak,’ said NBA chairman, Duff Burrell.

‘Processors are also wincing at these savage chops and one has claimed that the damage caused by the drop in mince value alone has stripped pounds 10m a week from industry earnings.’

The NBA says the tactics are self-destructive, even suicidal, because the multiples are undermining their only secure source of fresh beef by forcing even greater losses on their most important suppliers.

‘The future development of the entire UK beef sector is being held back by myopic and unsustainable supermarket discounting,’ said Mr Burrell.

‘Retailers themselves admit that beef is the only one of the thousands of products they sell that is purchased for less than the cost of production but are still deaf to industry arguments that forward progress across the entire sector is being held back by these Chicago-style price wars.’