Archived press release

Farmers Still Under Threat, Two Years On From Curry Report

12 February 2004

The Government has failed to take action on the threat to farmers livelihoods from unfair trading terms from the big supermarkets, Friends of the Earth said today, as Government ministers meet [1] to discuss progress on the recommendations of the Curry Commission, published two years ago [2].

The environmental campaign group is calling on the Government to impose a new statutory Code of Practice on the supermarkets and to appoint an independent supermarkets watchdog. The existing code has failed to protect farmers and consumers.

A Supermarket Code of Practice was introduced in 2002 after the Competition Commission found large supermarkets operating against public interest, by reducing the choice and quality of goods. But the Code is full of weasel words and is too weak to offer any real protection to suppliers. The Curry report raised problems with the Supermarkets Code of Practice, which applies to Asda, Tesco, Sainsburys and Safeway.

The Curry report recommended that:

• There should be a full review of the Code two years after its introduction
• The Code should cover other retailers and suppliers
• The dispute resolution mechanism should be replaced by an independent mediation service

Since the report was published a review of the Code was undertaken in February 2003, a year after the Code was introduced. But a further year on, and the OFT has still not published the results. Sir Don Curry has been very critical of the delay in the review being published [3]. No action has been taken to extend application of the Code to other companies, and nothing has been done to address problems with the dispute resolution mechanism.

Friends of the Earth's Food and Farming Campaigner Sandra Bell said

"Two years after the Curry report, it is clear that the supermarket Code of Practice has failed. During that time the Government has allowed the balance of power to tip further in favour of supermarkets by allowing Safeway and Morrison's to merge, putting control of three quarters of food retailing in the hands of just four companies. But it has done nothing to strengthen the protection for farmers and other suppliers from the bullying behaviour of the big supermarkets."

Even without the OFT review, it is clear that action to strengthen the Code is needed now. During the Safeway merger inquiry, suppliers told the Competition Commission that the Code is not working, and some suppliers said the situation has got worse since the introduction of the Code [4]. The Government has since allowed the merger of Morrison's and Safeway, increasing concentration in the grocery market, adding to the need for stronger code.

A survey last year by Friends of the Earth [5] revealed UK farmers are still experiencing the unfair practices the Competition Commission sought to eliminate, including paying rebates on agreed prices, additional costs due to supermarket changes in demand and covering the cost of supermarkets' unsold products or waste - even when the product is not faulty.

Since the Curry report, no action has been taken to extend application of the Code to other companies and nothing has been done to address problems with the dispute resolution mechanism. Currently suppliers must complain to the supermarket. The Curry report concluded that an independent mediation service was needed.

Friends of the Earth and 13 farming and consumer organisations have written to Trade and Industry Secretary Patricia Hewitt demanding that a new statutory Code of Practice be imposed on the supermarkets and that a Retail Regulator should be appointed. The Alliance [6] argues there is strong evidence that the existing Code makes it difficult for both UK and international suppliers to invest in environmental or animal welfare standards or improve working conditions because supermarkets are passing unreasonable costs back down the supply chain.

Notes

[1] "The Curry Commission - Two Years On" will be held at the Sainsbury's Business Centre on 12^th February. Speakers include Sir Don Curry, the Rt Hon Paul Boateng, the Rt Hon Margaret Beckett, Lord Whitty, and Sir Ben Gill.

[2] The Curry Commission was set up to advise the Government on how to create a sustainable and competitive food and farming sector. It reported in January 2002; "Farming and Food, a sustainable future" Policy Commission on the Future of Farming and Food.

[3] For example Sir Don Curry told the Grocer magazine that he was "frustrated" that the OFT review had still not been published even though it started the process a year ago, The Grocer, 10^th January 2004

[4] Competition Commission, 2003, Safeway plc and Asda Group Limited (owned by Wal-Mart Stores Inc); Wm Morrison Supermarkets PLC; J Sainsbury plc; and Tesco plc: A report on the mergers in contemplation

[5] www.foe.co.uk/resource/briefings/farmers_supermarket_code.pdf (PDF)

[6] The Alliance: Banana Link, British Independent Fruit Growers Association, FARM, Farmers for Action, Farmers Link, 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.

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Published by Friends of the Earth Trust