Concerns have been expressed at the impact of supermarket power on farmers in an interim report from the Competition Commission (CC). Scotland’s farm union has been heavily involved in the Commission’s grocery market inquiry and has welcomed today’s report. NFU Scotland has repeatedly stressed that the increased power of supermarkets is leading to unsustainable prices for farmers, with consumers set to suffer from reduced product choice.

The CC’s emerging thinking was published today. In its initial findings, the CC has indicated that whilst it has yet to find widespread problems in the supply chain and that food and drink processors are in ‘reasonable shape’, it has some concerns about the farmers who supply them. The report pinpoints problems in the dairy sector in particular, where it believes supermarkets have effectively increased their margin on milk sales at farmers’ expense. Similar remarks are noted in the pigs sector.

The inquiry team will now be looking further into this issue, in particular the impact of supermarket behaviour across all farming sectors. The inquiry has called for more evidence to assist it through the next stage.

NFUS President John Kinnaird said:

“Today’s report reflects the huge concerns within the Scottish farming industry over the increasing power of supermarkets; views we have expressed throughout the inquiry.

“Farmers don’t fear tough competition, but where it crosses the line and becomes an abuse of power, farmers lose out, the local food industry loses out and, ultimately, consumers lose out.

“The problems in the dairy sector have been well documented. As the exodus of farmers from the industry continues, supermarket profits on milk sales continue to rise. The Competition Commission has recognised that. However, our concerns over consumer choice and the treatment of farmers extends beyond the dairy and pigs sector to the whole farming industry.

“We note the inquiry’s initial thinking that the processing sector is in reasonable shape. However from the evidence NFUS has collected, the anti-competitive trading practices that some processors suffer from is directly linked to the rock-bottom prices paid to farmers.

“We are well aware that the inquiry can only act on hard evidence and we will continue to focus our efforts on providing that. We know the fear factor exists amongst suppliers but the inquiry team has given cast-iron guarantees on confidentiality and this inquiry is the best opportunity to address years of concern.”

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