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The Competition Commission has admitted to concerns over the relationship between farmers and supermarkets, but says it has so far received insufficient evidence from farmers to form a conclusion.

On Tuesday (23 January) the CC published an “emerging thinking document” outlining the issues it has so far considered in its investigation of the retail sector, and where it plans to focus attention in the next stage.

Peter Freeman, chairman of the CC and inquiry group chairman said: “We have considered the evidence supplied concerning relationships between grocery retailers and tier suppliers. 

“Whilst these haven’t indicated widespread problems in the supply chain, there are still concerns.  We have found that bigger buyers do not always appear to get better terms from suppliers, and food and drink manufacturers and processors, as well as wholesalers, seem to be in reasonable shape.

However, we have some concerns about farmers and we have not received as much specific evidence about unfair treatment of suppliers as we might have expected.  There may well be many more examples out there but we need to hear them otherwise we would have difficulty coming to a conclusion. 

“So we would appeal once more for suppliers with examples to come forward and assure them that requests for confidentiality will be taken on board.

The CC focussed its assessment of primary producers primarily on dairy and pig meat, as these were the two sectors where the most concern was raised.

In the summary document the CC notes: “The number of dairy and pig meat farmers has declined in recent years indicating significant difficulties in those sectors. 

“Average incomes are now rising but supermarkets are retaining an increasing share of the retail price for milk (the situation is less clear for pig meat).  We are looking at this further as well as other primary produce sectors.”

Mr Freeman said the investigation would now focus on the area that matters most to consumers.

“Our principal concern is now to focus on competition between retailers at a local level, where it matters most to consumers, as this is where many of the potential concerns we have would be evident.”

For more on the story see Friday’s issue of the magazine.

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