Supermarket price war fear for farmers

The cost of a £500m-supermarket price war must not be dumped on farm businesses, the NFU has warned.

Tesco has begun its ‘Big Price Drop’ campaign with cuts across 3,000 products.

The NFU is concerned that the extent of the cuts will force Asda, Sainsbury’s and Morrisons to follow suit.

NFU director of corporate affairs Thomas Hind said: “Clearly there is much speculation about Tesco’s pricing strategy and it’s premature to judge the impact this might have on the supply chain.

“Our main concern is about the prices farmers receive for their products rather than retail prices but experience tells us that retailers often expect their suppliers to ‘share the pain’ of any cut in retail pricing.

“This would be unacceptable in the current climate when farmers and manufacturers are facing massive cost pressures,” said Mr Hind.

Tesco recorded annual pre-tax profits of £3.4bn last year an increase of more than 10%.

A spokesman said that the cuts would be on essential items and especially on areas such as fresh food.

Price cuts

– Four pint-bottle of semi-skimmed milk £1.25 down by 24p (-16%)
– 2.5kg Maris Piper potatoes £1.39 down 35p (20%)

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