NFU backs investigation into supermarket power
The NFU has backed a proposal to refer the grocery market to the Competition Commission, but has questioned whether the terms of reference are broad enough.
The NFU believes there is evidence of a strong imbalance of power in the supply chain, which is leading some suppliers to complain of unfair dealings.
NFU President Peter Kendall said: "I am pleased that the OFT thinks the grocery market should be referred to the Competition Commission but I am not sure the scope of the review will adequately address the concerns of many farmers and growers. What we really need to see is a thorough review of Competition Policy across the supply chain. This should not just be about the big four retailers.
"Much of the competition between the retailers seems to be based solely on who can sell food at the lowest price. I believe that this is an incredibly short term approach with the potential to disastrously affect the long term viability of producers and eventually limit the range of products available to consumers.
"As professional food producers our objective is to deliver high quality, safe food for consumers at realistic prices. In order to do this we need open and transparent trading arrangements across the supply chain."
Mr Kendall also believes a review is necessary in order to address the climate of fear that currently exists in the supply chain: "Under the current system suppliers are extremely reluctant to stick their head above the parapet and complain about their trading relationships - even if their businesses are at risk - because they fear retaliation. The Competition Commission has to take a very close look at this situation and identify mechanisms that would allow suppliers to talk about their trading relationships without fear of losing their contracts."
The NFU will look at the OFT proposal very closely and will respond to the consultation in full, highlighting the aspects of the grocery market which the NFU believes indicates a serious imbalance of power in the supply chain.
