Retailers must take the lead in fair pricing customers and suppliers
With Britain facing its sharpest economic downturn in 30 years, the NFU is calling on the country’s largest retailers to take the lead in a new approach to corporate social responsibility which would see fair pricing for both customers and suppliers put at the heart of their retail policy.
NFU president Peter Kendall will make the call in a speech to the Cardiff Business Club in Cardiff on Monday (November 17).
"The global economic turmoil we are currently seeing means Britain is facing its sharpest downturn for a generation, driven largely by short term greed in the financial sector. This has resulted in real damage in people’s confidence and belief in the free market system," said Mr Kendall.
"The retailers, led by Tesco as the biggest and most successful, could go a long way to restoring public confidence in that free market system by demonstrating a new, fundamentally more responsible approach to retail policy. It is not inappropriate to ask, in the wake of the damage done by unfettered, greed-motivated behaviour by some in the financial sector, whether Tesco should continue to chase every last pound of dividend for shareholders at the potential expense of massive damage to the rural infrastructure in this country.
"Competitive pricing for its customers can be achieved without resorting to the crippling squeeze tactics on suppliers which are yet again rearing their ugly head. We are receiving all too many complaints from suppliers, frightened of taking up their issues direct, who have had unilateral price cuts and demands for back payments and over-riders. Frankly, some of these can only be described as outrageous, bully-boy tactics, and they must not continue as we head into recession
"While we fully recognise the plight of consumers and their need to buy good value food during the credit crunch, there is enough flexibility in the margin taken by retailers to offer competitive pricing without reducing the price paid to farmers, growers and other suppliers. A continuation of this policy will see the agricultural production base in this country irreparably eroded with diabolical consequences for suppliers," warned Mr Kendall.
He acknowledged the positive work done in some areas of the supply chain, including Tesco’s designated milk suppliers and Sainsbury’s initiative with Camgrain, but added that these needed to become the norm, rather than the exception.
"The contribution farming makes beyond that of food production – shaping the environment, contributing to biodiversity, for example - is too important to throw away because of short term pressures, however great they are. A longer term view is what is needed, for farmers and for consumers."
