Code of Practice 'makes no difference', claim suppliers
suppliers from 'unfair practices' by the major UK supermarekt
groups, has had little or no effect, claims Friends of the Earth.
More than half of the UK's farmers do not even know it exists.
Farmers and growers supplying the UK supermarket sector believe that the Supermarket Code of Practice introduced a year ago has made no difference to the way in which supermarkets do business with them.
This is one of the stark conclusions of a new survey carried out on behalf of Friends of the Earth - one of the staunchest critics of the British supermarket sector. 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, FoE said.
The Code of Practice was introduced following the recommendation of the Competition Commission whose 2000 investigation into the supermarkets found evidence that the biggest players adversely affected the competitiveness of some of their suppliers. This, the Commission said, meant that suppliers were therefore likely to invest less and spend less on new product development and innovation, leading to lower quality and less consumer choice.
The survey findings, based on the responses of 161 farmers and growers from the UK dairy, livestock, arable, and fruit and vegetable growing sectors, showed that far from improving the lot of suppliers - as the Code is designed to do - it has in fact had little effect.
More than half (58 per cent) of respondents did not think the Code had made any difference to the way supermarkets did business with them, while the supermarkets currently covered by the Code (Tesco, Sainsbury, Asda, Safeway and Morrisons) were all cited as continuing practices identified as being of concern to the Competition Commission.
Just over a quarter (26 per cent) of farmers had been required to change transport or product packaging, without receiving compensation for additional costs; and 16 per cent had to meet the cost of unsold or wasted products, although the product was not at fault, the FoE survey showed.
Furthermore, many farmers said they were being paid the same or less than the price of production for their produce (some 52 per cent in the case of dairy farmers). And there is little opportunity to complain, either: about a third of respondents who experienced problems supplying supermarkets said that fear of delisting was their reason for not complaining.
Most worrying of all, perhaps, is the fact that just 44 per cent of those responding to the survey were aware that the Code of Practice even existed. Is it any wonder, then, claims FoE, that the supermarket practices designed to be eliminated by the Code are still widespread.
Those farmers who are aware of the Code are certainly not enamoured by it, either. "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," FoE said in a statement.
Friends of the Earth is calling on the UK 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, it said, adding that a new independent watchdog should be created 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."With four of the five supermarket groups covered by the Code currently bidding for control of the fifth (Safeway), the real fear among suppliers is that the UK supermarket sector will soon become even more powerful than it already is FoE claims. "The big supermarkets in this country already hold too much power. They must not be allowed to extend their power by taking over Safeway," said Bell.
There has been no comment as yet from the UK supermarket sector, but the likelihood is that most chains will simply reiterate the message they have given out since the Competition Commission finished its review - that supermarkets do not inflict undue pressure on their suppliers, that they are major supporters of British farmers and growers and that they always deal fairly with suppliers while remaining as price-competitive as possible.
