4 December 1998

Close up ranks on marketing or else…

By Jonathan Riley

MAFF and the NFU have told farmers they must forge closer marketing links with each other or risk being squeezed out of the market.

At the Smithfield Show, junior farm minister Lord Donoughue announced the launch of a joint initiative between the two bodies called "Collaborative Marketing – Building Business Advantage" and said that farmers had to be realistic about the future of marketing.

Lord Donoughue warned farmers that they must recognise supermarkets were seeking to source products from fewer suppliers.

He added that meant small-scale producers would encounter difficulties when dealing with major retailers and many smaller farms would be overlooked.

"But its all very well criticising multiple retailers and major buyers and there is no doubt they are the most demanding of customers. However, they are the people who provide access to millions of customers.

"Farming – like most other sectors of business which operate in an increasingly global market – must learn to deal with the large buyers which are a fact of life.

"Collaborative marketing means producers can achieve economies of scale and pool resources. Collaboration strengthens negotiating ability and improves supply chain communication.

All these are essential for the professional agri-food supplier," said Lord Donoughue.

At the launch, NFU president Ben Gill said that the three main retailers controlled 51% of the food market and while farm gate prices had collapsed the retail price had continued to rise.

"A key objective of farmers must be to address this inequality by seeking to achieve a fairer share of the added value of the product that the consumer buys," said Mr Gill.

"We have to provide an interface where many farming units can work together and speak with one voice to the buyers."

"Working together farmers can organise themselves to produce a consistent and continuous supply of higher quality produce that meets the supermarket demands," he said.