Archived press release

Supermarket code fails farmers

17 March 2003

A survey of farmers and growers (PDF† - 95K) published today [Monday 17th] by Friends of the Earth reveals many feel the Supermarket Code of Practice [1], introduced a year ago, has made no difference to the way in which supermarkets did business with them. But the survey also shows that farmers feel they cannot complain about supermarket practice because of fears that they will lose their contract and the market for their produce.

Working with the help of farming and public interest organisations [2], Friends of the Earth contacted UK farmers [3] to ask about how they had been affected by the Supermarket Code of Practice, introduced a year ago following a Competition Commission investigation into the biggest supermarkets.

The survey findings, based on the responses of 161 farmers and growers from the dairy, livestock, arable, and fruit and vegetable growing sectors, showed:

• Fewer than half of those responding (44%) were aware of the Code of Practice.

• More than half (58%) did not think the Code had made any different to the way supermarkets did business with them.

• Supermarkets currently covered by the Code were all cited as continuing practices identified as being of concern to the Competition Commission.

• Just over a quarter (26%) of farmers had been required to change transport or product packaging, without receiving compensation for additional costs; and 16% had to meet the cost of unsold or wasted products, although the product was not at fault.

• Many farmers said they were being paid the same or less than the price of production for their produce (eg. 52% of dairy farmers).

• Many farmers support the idea of new legislation to prohibit the unfair trading practices of the supermarkets, and for an independent regulator to oversee the way in which supermarkets do business with suppliers.

• About a third of respondents who had experience problems supplying supermarkets said that "fear of delisting" was their reason for not complaining.

Friends of the Earth is calling on the Government to strengthen the Supermarket Code of Practice in line with the original recommendations made by the Competition Commission, and to impose this on supermarkets. The new code should be extended to cover farmers who supply supermarkets via an intermediary, such as a wholesaler or dairy. And the Government should appoint a new independent watchdog to ensure the new Code of Practice is effective.

Friends of the Earth food and farming campaigner Sandra Bell said:

"This survey provides a snapshot of how UK farmers are still very much in the arm lock of the supermarkets, despite the Code of Practice. The Government must impose a new Code with teeth on the supermarkets, and ensure it is enforced. If the supermarkets are allowed to continue squeezing UK farmers they will not be able to invest in the sort of quality local food that people want, and many will go out of business. This will leave us with the biggest most intensive farms in the UK and a greater reliance on imported food.

"This survey is another indication that the big supermarkets in this country already hold too much power. They must not be allowed to extend their power by taking over Safeways."

Notes

[1] The Code of Practice was introduced following the recommendation of the Competition Commission whose investigation into the supermarkets found evidence that the biggest adversely affected the competitiveness of some of their suppliers. Suppliers were therefore likely to invest less and spend less on new product development and innovation, leading to lower quality and less consumer choice. (Supermarkets, a report on the supply of groceries from multiple stores in the United Kingdom, October 2000).

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Published by Friends of the Earth Trust