Asda denies profit cuts are smokescreen

14 January 1999

Asda denies profit cuts are smokescreen

By FWi staff

ASDA has rejected accusations that profit-slashing measures totalling £68 million are a smokescreen to divert attention from an Office of Fair Trading inquiry into supermarket buying practices.

Asda officials chose a summit meeting today with 350 farmers in Leeds to announce the series of price cuts which will cover various food products.

The supermarket claims the package will raise incomes for farmers, lower prices for shoppers and set the standard that other supermarkets will follow.

It claims the price-slashing measures represent a £68m investment in British agriculture which will bring long-term benefits to British farmers.

Farmers from across the country, many of them Asda suppliers, attended todays conference aimed at giving producers a chance to air their views on the farming crisis.

Farm incomes last year were at their lowest level since the 1930s but supermarket meat prices remained virtually unchanged.

Many farmers claimed supermarkets were profiteering and guilty of failing to pass on lower producer prices to consumers.

The outcry resulted in an Office of Fair Trading inquiry into supermarket buying practices, the results of which will be announced within weeks.

A spokeswoman for Asda accepted that supermarkets had been slow to respond farmers worries.

But she rejected accusations that the package was timed to coincide with the imminent release OFT report.

“Our industry has been slow to respond,” she said. “But Asda has always been supportive of British agriculture.”

“Farmers and growers dont need column-inches or sympathy, they need volume. This is a major step in that direction.”

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