Price war concerns mount
FARM LEADERS have expressed concern at the growing price war and battle for market share among the UK‘s big three retailers.
At Christmas Tesco was named as the cheapest supermarket for the first time in seven years ahead of its rival Asda.
But on Friday (Jan 7) Asda retaliated by announcing a package of cuts totalling £117m.
Sainsbury‘s, which has slipped from first to third in the supermarket rankings, has announced over 6000 price cuts in an effort to recoup ground lost to the top two.
The price cuts have sparked fresh concern from farmers‘ organisations which fear that producers will bear the brunt of the costs while supermarkets protect market share and their profits.
Terry Jones, head of the NFU‘s food chain unit, said the price war would have consequences for producers.
“Every time there is a price cut it takes value out of the food chain,” he said.
“We have to recognise that if there are large chunks of value taken out of the supply chain and if the weakest link is the farmer, then it is quite likely they will bear the brunt.”
The constant pressure on farmers to shoulder the burden has persuaded Farm, the lobby group, to submit a statement to the Office of Fair Trading asking for the introduction of a statutory code of practice to regulate supermarket practice.
“We need a statutory code with some real bite if things are to change for the better,” said Robert Alderson, Farm co-ordinator.
“Supermarkets are by far and away the dominant force all the way down the food chain. They need to start listening to their customers‘ concerns.”
“It‘s not just prices that customers are concerned with. Fairly traded goods are becoming an increasingly important issue,” said Mr Alderson.