16 March 2001

Leaked code shows supermarkets still with upper hand

By Donald MacPhail

and Alistair Driver

A CODE to regulate relations between suppliers and supermarkets looks set to offer farmers little protection, according to a leaked draft of the document.

Recommendations by the Competition Commission, which have been seen by farmers weekly, have been watered down and will enable supermarkets to continue dictating terms to suppliers, said the pressure group Friends of the Earth.

"This weasel-worded Code of Practice will not release farmers from the power of supermarkets," said FoE food campaigner Adrian Bebb. "It will simply give legitimacy to big retailers to carry on with business as usual. If this happens many small suppliers will have to go to the wall."

The code of practice was recommended last year following an investigation by the Competition Commission which concluded that the relationship between supermarkets and farmers was distorting the market.

But Mr Bebb said the draft code would continue to allow supermarkets to determine what was a reasonable amount of money to pay farmers for farm produce. Furthermore, the code would enable retailers to appoint their own mediator to arbitrate any dispute between supermarkets and suppliers, he said.

Supermarkets rejected the accusations. Tesco, Britains biggest supermarket, wanted the code to protect farmers by ensuring that all transactions were bound by written contracts, said spokesman David Sawday. "We have welcomed the move towards a legal code of practice that puts the relationship between supermarkets and suppliers on a transparent basis."

Safeway spokesman Kevin Hawkins said the leaked document was only a draft and the concerns of farmers and suppliers would be taken into account before the code of practice was finalised. "There has got to be a degree of flexibility. If there is disagreement between parties there will be an independent mediator to sort it out. This will happen."

The Farmers Union of Wales said that the foot-and-mouth crisis showed why farmers needed protection from Britains big supermarket retailers. Arwyn Owen, the unions deputy director of agriculture policy echoed concern that supermarkets are trying to water down the code.

"Prices quoted to farmers for beef, lamb and pork are in many cases lower than they were prior to the crisis," he said. "We demand nothing less than a stringently enforced code that ensures supermarkets no longer wield their massive buying power to force prices down." &#42