We’re not unfair on farmgate prices, say supermarkets

Supermarket bosses battling to increase their market share have denied paying unfair prices to British farmers who supply them with meat and milk.

Tesco, Morrisons and Sainsbury’s all acknowledged that retail margins were tight – but insisted that the market was working fairly.

Representatives from the three supermarket giants were giving evidence to a group of MPs who are investigating low farmgate prices.

See also: Supermarkets must leave farmers out of throat-cutting policies

The price that retailers pay for dairy and red meat is being investigated by the House of Commons Environment, Food and Rural Affairs Select Committee.

For many farmers, falling prices paid for their products, were leading to an uncertain future, it said.

Tesco group quality director Tim Smith rejected the suggestion by committee chairman Neil Parish that the logical outcome of a supermarket price war was lower prices for farmers.

Mr Smith told MPs: “I don’t think we see the evidence for that.”

Taking milk as an example, he said farmers were paid more than the market price.

“Where necessary you have to decouple what the market is doing from the price we need to pay those farmers to protect them and the investment they have [made] in the supply chain.”

Morrisons fresh trading director Alex Brown said the retailer had long term contracts with many of its farmers. Sainsbury’s brand director Judith Batchelar said.

“It is absolutely in our interest to make sure that we have a thriving food and farming sector.”