The relationship between primary producers and the supermarkets is, at best, a prickly one.
Tales of farmer suppliers being dumped on from a great height are commonplace - be it in the form of cancelled orders, demands for "key money" or retrospective price cuts to fund the latest retail promotion.
But pinning down specific cases has been almost impossible, as farmers have been too scared to complain, for fear of being delisted altogether.
Having said that, there are signs that things are improving. The development of "meat clubs" and, more recently, dedicated supply chains in the dairy sector are a sign that some supermarkets are taking their responsibilities more seriously.
Despite this, farmers remain extremely vulnerable, especially in times of recession when competition between supermarkets and discounters has intensified. This week's announcement that the Competition Commission is pressing on with its plans to establish a supermarket Ombudsman is therefore welcome.
The move follows the launch in February of a new, tougher code of practice for the grocery sector. That sought to:
• extend the coverage to more than just the "big four" retailers
• prohibit retrospective changes to contracts
• limit the extent to which farmers have to pay for listings and promotions
• require reasonable notice and full justification before a supplier is delisted
While all these measures are an improvement on what went before, they are only any use if they can be properly enforced - which is where the Ombudsman comes in.....
The good news is that the Competition Commission appears to have rejected the supermarkets' complaints that this is just an unnecessary and costly extra layer of bureaucracy.
The not-so-good news is that this week's announcement marks the start of yet another consultation, rather than a firm decision. On top of that, if an Ombudsman is to be established, it will require the full agreement of retailers - and that's clearly not going to happen!
The next stage, therefore, will be for the Competition Commission to recommend to the Department for Business Enterprise and Regulatory Reform that it changes the regulations and sets up an Ombudsman. In other words, nothing is likely to happen very fast.
But at least things are moving in the right direction. The Competition Commission clearly believes a supermarket Ombudsman is needed. It will instil some much needed confidence among primary producers, encouraging them to invest. And retailers who deal fairly with their suppliers should have nothing to fear.
Above all, establishing an Ombudsman will give the new code of practice some teeth. Failure to regulate effectively is a recipe for disaster - for evidence look no further than the banking sector.
* For more blog postings, click here
| Tweet |
|
To all Concerned...
Reading the article above , I believe the only way forward with the economics as they stand today, (i.e getting sensible returns for farmers.....) is for farmers to sell their produce directly to the consumer at significantly lower prices than the supermarkets -just think what could be saved with lower freight costs and less packaging!
However, just like the supermarkets, direct sales would be at significant volumes, in towns and cities, and not from rural farm shops.
For the past few years I have been developing a concept of a SEVEN DAY farmers' market in the London area - Somewhere accessible to the urban shopper but offering produce at significantly lower prices than currently available at supermarkets.
The retailer, farmer and consumer would benefit from sales in a much more equitable way than the supermarkets currently dictate.
My background is both in property and volume food sales and I would like to meet and talk to farmers interested in this concept. I am not interested in wholesalers, middle men or retailers. If you are curious, a farmer and/or rearer/butcher and would like a more detailed discussion I would be keen to talk to you.
I am looking for the following produce initially- Fruit, Vegetables, Dairy,
Poultry & Eggs, Pork, Beef, Lamb, Fish, Cider & Wine, Honey etc.
I would welcome contact via email at this stage. Hope to hear from you. Thanks