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Stores push farmers aside
I WAS amused to see the headline on a newspaper I bought the other day. "Supermarkets too powerful," it read.
Whatever next I thought? "You may get burnt if you touch a boiling kettle," or perhaps "Pope declares he is a Catholic." Of course, anyone who has any understanding of how supermarkets work knows they are too powerful and don't need a newspaper headline to tell them.
That said, the story related to a report published by Grant Thornton which had surveyed a large number of small and medium size businesses that supply supermarkets, and many of the findings are quite interesting.
These findings include 25% of suppliers have had a contract cancelled at short notice without penalty.
l Two-thirds of suppliers have no formal contract which can often result in costly last minute changes and complications.
l 80% had been put under pressure to lower prices.
l 20% had been forced to accept an extension in the length of time before supermarkets pay up.
Overall, 80% of suppliers said supermarkets exert too much power.
From a farming perspective it is clear that supermarkets have taken far too high a proportion of the final price and passed far too little back to farmers. This is a policy they may come to regret.
In some sectors, for example, dairying, low prices have caused such a shortage that the milk price is set to go up very significantly. Had they paid slightly more for milk over the last few years this big jump may not have happened.
The competition commission report into Supermarkets is still ongoing and I hope it doesn't turn out to be a "whitewash" as similar investigations in the past. It is important that suppliers feel they are able to come forward, give evidence to this report and not be afraid of retribution from the retailer.
Supermarkets are here to stay but it is important they have a much more equal relationship with suppliers rather than the dominant relationship they have had for the last few years.
On September 11 the WFU are holding a meeting near Exeter entitled "The future of the British Countryside." A number of high profile people from the farming industry will be speaking at the event. Anyone who is interested in finding out more about the work of the WFU can contact Ann Cross on 01398 361212.
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