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Stackyard News Sep 06

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    Farm Union Gives Evidence To Competition Commission

Scotland’s farming union has told the Competition Commission that consumers are set to suffer as a result of the unchecked power of the major supermarkets.


At a two-hour hearing in Edinburgh this morning, NFUS stressed that the financial squeeze being exerted on suppliers by supermarkets translates into prices for farmers which are often below the cost of production. Ultimately, unless there is an effective mechanism to deal with instances of supermarkets abusing their power, there will be a significant downturn in UK food production and consumers will face less product choice and availability.

NFUS is arguing for the existing Supermarket Code to be strengthened with independent enforcement to ensure supermarkets treat suppliers fairly.

NFUS President John Kinnaird said:

“The Competition Commission inquiry team allowed us this morning to outline where we believe the grocery market is failing consumers. We have collected evidence of supermarkets exploiting their powerful position by imposing unacceptable trading terms on suppliers. These translate into lower farmgate prices, all of which jeopardises the future supply of quality Scottish produce. Ultimately, consumers will face fewer product choices and less availability, at a time when demand for local produce has never been higher.

“We emphasised that we are not against a tough trading environment, however we are against abuse of power which has major consequences for consumers, as well as the farming and food industry.

“We stressed our support for the principle of a Supermarket Code of Practice but emphasised that the current regime has failed because supermarket suppliers are afraid of commercial reprisals if they complain – and no action can be taken without suppliers making a complaint.

“For that reason, NFUS believes that proactive enforcement of the Code is essential. We require some kind of adjudicator with the power to go into the market place, spot-check relationships and take action where anti-competitive practices are identified.

“We also outlined the need for competition policy to allow the development of farmer co-operatives. This would allow individual farmers to achieve greater economies of scale by working together. There is a widespread belief within the agricultural industry that competition policy has stifled such moves in the UK whilst co-operatives have flourished elsewhere in Europe.”

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National Farmers' Union
NFU Scotland