David Handley is getting all revved up to give Tesco grief about their new Fresh n Lo brand. I normally side with the retailers where David is concerned, I am not convinced that he has made every effort to get his business in shape and I'm not aware that he even supplies Tesco. I've got a more open mind this time and I'm not sure what to think about these protests yet, I haven't read the reports properly. I'll 'ave a Google, one minute.
I've just looked and the only reports that I can find are on FWi and on the BNP website (not one that I normally feel the need to look at); I hope that you'll forgive me for not providing a hyperlink to that. I'm not suggesting that there are links between Farmers for Action and the BNP but they do seem remarkably well briefed about the protests. Don't expect FFA to get favourable coverage in the Guardian or Independent if they were seen to move in those circles.
Cutting prices in some food sectors while inflating those in others is neither reasonable nor sensible. I wasn't aware that life was ever promised to be either of those things though.
I know it's becoming pretty bloody in retail. The retail price of one of the flower products that we supply is being reduced by 25% today in an effort to get the sales figures up. In the supply chain which I work in, we all agreed that discounting was the right thing to do. We need to keep those sales.
I will be able to tell you the effect it has in a couple of weeks. If it increases sales, I will be able to calculate if it's better to sell all of my production at a lower price or to cut my production next year and sell less of it at a higher price. Each time we discount we re-establish a lower price point in the consumers mind. It's a flawed strategy and it's certainly not a long term solution but the option is to sell less product.
David and the milk producers have the same choicein a recession that I have, lay off staff, get rid of production, cut supply and sell less for more. The trouble is there is always another kamikaze farmer prepared to do more for less. Sometimes you need to have the courage to let them get on with it.
It is the same for all types of fresh produce with a long production lead time be it milk, potatoes, flowers, whatever. We commit to produce it before we know what the demand is and it makes us weak negotiators. We can only negotiate when there is a shortage and two potential customers. At the moment there are always two potential suppliers.
This is the market economy that Margaret Thatcher strived to create. Competition between suppliers drives down prices for consumers. If farmers had supported a more diverse supply base then we would be in a better position too. We didn't and so we deal with cartels and monopolies to buy most of our inputs.
Some say that the answer lies in powerful cooperatives to deal with the supermarkets. This way competition between farmers is kept within the co-op. The same process applies and gradually the most efficient producer takes over from the others.
It is sad for farmers just as it was sad for coal miners or steel workers who suffered under this system. Although the process of change is painful, ultimately the logic works. I would wager that a lot of the dairy farmers who are currently painting banners to wave outside Tesco were Tory voters in the 1980s. I bet that there weren't many of them cheering support for Arthur Scargill.
Please argue with this post because I'm not sure that I like what I have just written. I'm hopeful that this will rouse Mike P from his statin-induced meditative state.