Archived press release

Alliance Demands Action Now on Supermarket Power

16 March 2004

A new alliance [1] calling for stricter controls over supermarket trading will be launched in the House of Commons today (Tuesday 16^th March) as MPs debate the effectiveness of the current supermarket code of practice in the House [2, 3].

Two years on from the introduction of the industry-led Code, the alliance, which includes Friends of the Earth, the National Federation of Women's Institutes, and the Small and Family Farms Alliance say that supermarket power should be regulated by an independent watchdog with real teeth.

Liberal Democrat Rural Affairs and Food spokesperson Andrew George MP, who is leading the adjournment debate on the Code, will launch an Early Day Motion with David Drew MP (Labour) [4] calling on Ministers to act urgently to stop unfair trading practices rather than delay further by waiting for more Office of Fair Trading (OFT) investigations.

Britain's biggest supermarkets wield huge market power. Some three quarters of the grocery market is now controlled by just four companies, as recent mergers and buy-outs have tipped the power balance even further in favour of the retail giants. Tesco alone now controls more than a quarter of the country's grocery market, and Friends of the Earth is calling for a moratorium on any further expansion of the store.

Friends of the Earth Food and Farming campaigner Sandra Bell said:

"It is four years since competition authorities reported that the biggest supermarkets were bullying their suppliers and nothing has changed. It is three years since Tony Blair promised to release farmers from the supermarkets' armlock and nothing has changed. How many more farmers and small shops does this government want to see go out of business before it wakes up to the fact that supermarkets will not trade fairly unless they are forced to. It must act now by appointing a watchdog with teeth to enforce a much stricter set of rules on these companies"

Andrew George MP said

"Greater transparency in the food supply chain would be good for farmers, processors, supermarkets and consumers. Consumers want reassurance that supermarkets' claims can be backed up independently and that their purchases do not damage the viability of British farming. Supermarkets would benefit from having their trading independently endorsed and farmers would benefit from getting a decent return to the farmgate."

Notes

[1] The Alliance: Banana Link, British Independent Fruit Growers Association, FARM, Farmers for Action, Farmers' Link, Farmers' Union of Wales, Friends of the Earth, Grassroots Action for Food and Farming, IIED, National Federation of Women's Institutes, New Economics Foundation, Pesticide Action Network UK, Soil Association, Small and Family Farms Alliance, WyeCycle

[2] Members of the press are invited to the launch: 16^th March 2pm House of Commons Committee Room 5. Speakers:

• Andrew George MP, Rural Affairs and Food Spokesperson, Liberal Democrats

• Tracy Sortwell, Chair of Public Affairs Committee, National Federation of Women's Institutes

• Michael Hart, Co-ordinator, The Small and Family Farms Alliance

• Elizabeth Start, Policy Development Officer, Federation of Small Businesses

• Sandra Bell, Food and Farming Campaigner, Friends of the Earth

[3] The debate on the code of practice led by Andrew George MP will take place at 11.00am, following a debate on the financial future of farming between 9.30 and 11.00am led by Mr Peter Atkinson MP

[4] Andrew George MP and David Drew MP have tabled EDM 817 supporting the demands of the campaign:

817 SUPERMARKET CODE OF PRACTICE 11:3:04

That this House notes the conclusions of the recent OFT review that the Supermarket Code of Practice has failed to protect suppliers to the biggest four supermarkets from unfair trading practices; notes that suppliers are too afraid to bring complaints forward under the existing mediation system; regrets that the OFT failed to recommend any firm action other than more investigations; notes the original findings of the Competition Commission that the trading practices of the four biggest supermarkets are leading to adverse effects including the loss of smaller suppliers and smaller retailers and the reduction of quality and choice to consumers; notes with concern that the adverse effects are felt most by small and family farmers in the UK and overseas, by independent shops and smaller retailers and by people without cars that rely on local shops; and calls on Ministers to draw up a new strengthened and legally-binding code of practice with stricter terms and to appoint an independent supermarket watchdog pro-actively to monitor the effectiveness of the code, provide an independent mediation process between suppliers and supermarkets, monitor other aspects of the grocery market, and make its findings public.

[5] On 1st March 2001 Tony Blair told farmers that "the supermarkets have pretty much got an arm-lock on you people at the moment", and promised that it was "something we have got to sit down with them and work out".

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