nfu call to Supermarkets – bring farmers and growers in from the cold

The NFU today called for Britain's major supermarkets to take greater responsibility for the viability of their farmer and grower suppliers, as an interim report from the Competition Commission highlighted the striking disparity between booming profits at retail level, and shrinking incomes on the farm.

As the Competition Commission's "emerging thinking" report has highlighted, the situation is at its worst in the dairy sector, where the milk producer's share of the retail price of milk has fallen from 59 per cent in 1995 to 35 per cent today, at the same time as the supermarket's share has risen from 3 per cent to 30 per cent. The result has been the average dairy farmer is now being paid 4p per litre less for his milk than it costs him to produce, and almost 1,000 dairy farmers quit the sector last year.

NFU President Peter Kendall said: "It is time farmers and growers were brought in from the cold and allowed to share in the success of the retailers in meeting consumers' needs, rather than being victims of it.

"Because of their sheer size, the supermarkets are the key players in every supply chain. They have it in their power to make sure that everyone involved in those chains receives a fair price for a good product. But across the board, retailers have stood by and allowed a situation to develop in which their margins have grown fat, while farmers and growers have been squeezed and squeezed again.

"Viable, sustainable supply chains are in the best interests of producers, processors, retailers and, above all, consumers, who can have no interest in seeing high quality British farmers and growers being squeezed out of business.

"We hope this report will be the trigger to spark all supermarkets to engage with their suppliers in the ways that only the best of them have done up to now and I am urging suppliers to come forward and give evidence in the knowledge that the Competition Commission guarantees confidentiality."