Supermarkets set to derail bill to protect suppliers

Major retailers tell Commons committee that proposed groceries code regulation would lead to further price inflation Long-awaited legislation on how supermarkets treat suppliers looks likely to be derailed or rendered toothless by “heavy artillery lobbying” from big retailers. Asda, Sainsbury’s, the British Retail Consortium and the Co-op have all told a Commons select committee that the proposed groceries code adjudicator is an unnecessary extra burden on supermarkets and that it would lead to higher food prices. Though the draft bill reflects manifesto promises by the Conservatives and Liberal Democrats, the government is likely to heed the retailers’ threat. Food price inflation, at 4.9%, is a major concern as global prices seem likely to rise in the long term. Yet organisations ranging from the National Farmers Union to Friends of the Earth and ActionAid say the bill is crucial to tackle years of abuse and restrictive practices as the supermarkets have upped their profits during the downturn by squeezing smaller suppliers. Three thousand farmers and other suppliers have gone out of business in Britain as a direct result of supermarkets’ bullying and unfair buying policies, according to Andrew George, MP for West Cornwall, who heads the Grocery Market Action Group. He said the potential cost of the adjudicator to the retailers was “a gnat bite”, as long as they carried out their business fairly. The government introduced a binding code of practice on the 10 biggest retailers and processors after two damning Competition Commission reports. The supermarkets say that the code is working well – there have been no complaints made under it – and so there is no need for an ombudsman. But the NFU says that a “climate of fear” prevents hard-pressed farmers complaining lest there be “reprisals”. Campaigners want the bill toughened to allow an ombudsman to hear anonymous complaints and impose fines. An Observer investigation backs up the NFU’s accusation. Among dozens of farmers interviewed, only very few felt able to let their names be used. Yet the practices they revealed – including “no-price contracts”, being forced to sell their produce on two-for-one discounts, and having to use supermarkets’ preferred middlemen at vastly increased cost – are all banned by the code of conduct and may be illegal. Special investigation, pages 8-9 Pig farmers have been selling their animals at a £10-£30 loss since August last year, when a huge and unexpected rise in the price of feed hit them. But supermarkets have largely refused to allow any price increases, and 30 farmers have gone out of business this year, according to the National Pig Association. One dairy farmer complained to the Observer that he was getting only 1p more per litre of milk than he was in 1997, though the price in the supermarket has gone from 42p to 80p or more. The NFU says that at least one dairy farmer in Britain has gone out of business every day for a decade. Andrew George MP said: “We need this measure: food producers here and in the developing world want to concentrate on being able to provide healthy food for customers, they do not want to perpetually fight the supermarkets for survival.” Farming Supermarkets Inflation Food & drink industry Alex Renton guardian.co.uk

Posted by on July 2, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.