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Supermarket Takeover Must Be Stopped, MPs Told

Jun 23 2005

Britain's supermarkets are damaging British business, are bad for consumers and bad for the environment, MPs will be told today (Thursday 23rd June) at a Friends of the Earth briefing, hosted by Andrew George MP [1]. The warning comes on the eve of the supermarket giant Tesco's AGM and follows record profits for the company [2].

Friends of the Earth will ask MPs for action to control supermarket practices and to curb Tesco's huge market share to prevent farmers and consumers paying the price of its success. The environmental campaign group will be joined by ActionAid, the New Economics Foundation, union representatives and a UK farmer to illustrate the wide-ranging and damaging impacts of supermarket power.

Tesco controls nearly one third of the UK grocery market, setting the standard across the retail sector. But while the company boasts about its commitment to fair trade and "corporate responsibility" [3], a new report from Friends of the Earth shows that Tesco's practices are putting many UK farmers out of business; while on the high street, some 2,000 independent stores went out of businesses in the last year alone, unable to compete with promotions and planning and taxation policies which favour the multiples over smaller shops [4].

Friends of the Earth's Supermarket Campaigner Vicki Hird said:

"Tesco is lauded as a British success story but the image is a deceptive one and it is beginning to tarnish. Farmers and consumers are paying the price of its uncontrolled expansion here and overseas. MPs must act now to curb the growing market power of supermarkets and ensure that Britain's booming supermarket industry does not kill off farmers, consumer choice and the traditional British high street."

Supermarket practices are also driving climate change, the new report claims, as the rapid growth in trade brings demand for extra transport, refrigeration, heat and light. Tesco claims to have spent £3.7 million on energy saving schemes in the last year, but failed to meet its commitment to cut emissions by 4.2 per cent [5]. Its stores consume nearly two times more energy than the national average [6].

While Tesco has signed up to the Ethical Trading Initiative, it has also been active in promoting banana price wars leaving many banana workers with less than a living wage. It has also refused to join the Round Table on Sustainable Palm Oil, despite palm oil being found in more than 1,000 products that Tesco sells.

Friends of the Earth is calling for an immediate investigation into Tesco's monopoly position and a stricter code of practice, enforced by an independent regulator, for all supermarkets to ensure suppliers are treated fairly. Friends of the Earth is also calling for corporate accountability legislation to be introduced to make UK companies responsible for their impacts on communities and the environment worldwide [7].

`Tesco Takeover' leaflet (PDF)

Fuller background briefing (PDF)

Friends of the Earth's briefings on supermarkets and the environment and communities
www.foe.co.uk/resource/briefings/checking_out_the_environme.pdf (PDF)
www.foe.co.uk/resource/briefings/good_neighbours_community.pdf (PDF)

A new website, launched today (Thursday) provides more detail on criticisms of Tesco - www.tescopoly.org

Notes

[1] The MPs Briefing, hosted by Andrew George MP, takes place in the Attlee Suite, Portcullis House at 11am on Thursday 23^rd June 2005. Speakers include Didier Leiton Valverde from the Costa Rican banana workers' union, Julian Oram from ActionAid, Chris Hull - Norfolk constituent fighting a superstore development, UK strawberry farmer William Hudson, Andrew Simms from the New Economics Foundation, and Vicki Hird, Senior Food Campaigner at Friends of the Earth.

[2] The Tesco Annual General Meeting takes place at the QEII Conference Centre in Westminster at 11am on Friday 24^th June 2005 and will be attended by Friends of the Earth.

[3] www.tesco.com/everylittlehelps/

[4] See www.foe.co.uk/resource/briefings/the_tesco_takeover.pdf (PDF)

[5] www.tesco.com/csr/index.html This is also a drop in spend on energy efficiency schemes as they spent £6million in 2003/4

[6] See www.foe.co.uk/resource/briefings/the_tesco_takeover.pdf (PDF)

[7] Friends of the Earth's main demands are:

• A much stricter code of practice to ensure that suppliers in the UK and overseas and along the whole chain are treated fairly, and which covers sustainability, labour and health standards.
• A supermarket watchdog to ensure that the grocery market is operating in the interests of consumers, farmers and small retailers.
• An immediate investigation into the Tesco monopoly position and a moratorium on Tesco taking over any more shops including convenience store chains.
• Enlargement of competition policy to address impacts on suppliers (not just consumers) to prevent misuse of buyer power.
• A market study by competition authorities to examine the wider effects on society of the over-concentrated retail sector with a view to presenting policies to address market share.
• More robust planning policies to protect town centres and high street shops including a cap on retail floorspace.
• Corporate accountability legislation which makes companies accountable for their effects on communities and the environment worldwide.
• To revisit the case for international commodity agreements for products such as palm oil and bananas to ensure fair play and sustainable production and trade.
• Development of codes on buyers' activities for international supply chains

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