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
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
“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
“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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