Supermarket power abuse must be regulated

An alliance of environmental, development, consumer and farming groups has called on the DTI to urgently act on abuses of power from major supermarkets.

According to the alliance, enough evidence of unfair supermarket practices already exists to demonstrate clearly that the current supermarket code of practice does not work, and that dramatic changes to the market situation, such as a number of bid convenience store takeovers, have led to an increasing imbalance of power in the food chain.

Moreover, an independent and confidential watchdog is needed to allow suppliers to bring complaints forward in confidence – reports of abuses and complaints must currently go through the retailer, putting the supplier-retailer relationship at risk if they choose to report any problems.

The call also comes as the Office of Fair Trading (OFT) is preparing to publish its audit on how the stores comply with the supermarket code of practice. Last year, the OFT review found that around 85% of respondents claimed the code had failed to bring about any changes to supermarket behaviour.

Improved regulation to protect suppliers, consumers and independent retailers from increasing supermarket power is the only way to stop power abuse according to the alliance, which claims that evidence shows even the most robust voluntary initiatives do not work at supermarkets.

Farms and farm workers at being lost at an alarming rate in the UK, with an average of 25 farm workers leaving farming every day, with the farmer’s share of the food pound now having dropped to 7.5p.

Just 50 years ago, farmers received half of every pound spent on food.

“By putting the code on a statutory footing, the government can strengthen it without needing primary legislation,” alliance member Friends of the Earth’s food campaigner Vicki Hird stated. “Enough farmers have been put out of business by the current system.”

The current code also affects overseas suppliers, she added. When producers from developing countries start to supply UK supermarkets they are often forced to accept prices below production costs and cover discount costs, making it difficult to pay a living wage to workers.

“Making the code stronger to give suppliers more protection is not rocket science,” Ms Hird said.

By Jane Kettle

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