Farmers still under threat from supermarket strength?

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Related tags: Asda, Wal-mart

It is now two years since the publication of the so-called Curry
Report on the future of the British farm and food industry, but
many of the recommendations in the report - notably those
concerning the power of the major supermarket groups - have yet to
be implemented, according to lobby group Friends of the Earth
(FoE).

Tesco was one of several leading retailers criticised​ last week by Oxfam for exerting increasing pressure on its suppliers in the developing world, but the situation in Tesco's home market is no less a cause for concern, according to FoE.

"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 last week as government ministers met to discuss progress on the recommendations of the Curry Commission.

FoE also reiterated its call for a new statutory Code of Practice to be imposed on the supermarkets and for the appointment of an independent supermarket watchdog.

"A Supermarket Code of Practice was introduced in 2002 after the Competition Commission found large supermarkets operated 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, Sainsbury and Safeway."​ FoE said in a statement.

The Curry report recommended that there should be a full review of the Code two years after its introduction, that it should be extended to other retailers and suppliers (all the more important now that Morrisons is set to replace Safeway in the top four), and that disputes between retailers and suppliers should be handled by an independent arbitration panel.

Although review of the Code has in fact already been carried out, according to FoE, the Office of Fair Trading is yet to publish the results, and none of the Curry Commission's other recommendations have been implemented.

"Even without the OFT review, it is clear that action to strengthen the Code is needed now,"​ according to FoE. "During the Safeway merger inquiry, suppliers told the Competition Commission that the Code was not working, and some suppliers said the situation has got worse since the introduction of the Code. 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."

But what does Sir Don Curry himself think about the progress which has been made since the publication of his report in 2002? Speaking at the ministerial meeting last week, he was decidedly more conciliatory than FoE suggested he would be, saying that UK farming was moving in the right direction, but that success could not be achieved overnight.

"The current power imbalance between producers and retailers has led in many cases to a lack of trust and confidence. We need to establish responsible and sustainable trading relationships,"​ he said.

And a new survey of farmers carried out by the Institute of Grocery Distribution in the UK suggests that 43 per cent of farmers are also more optimistic about their farm business, suggesting that some progress has been made in the two years since the report was published despite FoE's claims.

However, 70 per cent of farmers said they were still unclear about the strategy or direction for English farming set out by the Curry Commission, while of the 58 per cent of farmers who were aware of the Curry Report, just 32 per cent said they felt positive. The vast majority (77 per cent) said that they had seen no overall impact of the report on their farm business.

Another IGD survey - this time of consumers - showed that most are very patriotic when it comes to supporting Britain's farmers. Some 96 per cent of those questioned said they thought it was important that home produced food remained widely available, and this might prove to be telling in FoE's ongoing battle with the retailers.

The major multiple grocers are extremely sensitive to consumer demand, and would undoubtedly suffer if they were perceived as failing to support local farmers - which is why all of the major chains go to great pains to stress their credentials in this area. Of course, supporting British farmers by stocking more of their products does not necessarily imply giving them good terms for those products, and FoE is likely to continue to raise awareness of the practices which it claims are going on behind the PR exercise until farmers truly get a fair deal.

Related topics: Market Trends

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