Very low prices may serve the interests of politicians desperate to keep short-term inflation in check, but if the result is severe damage to a leading UK food supplier, this is not a good approach.
If big supermarkets demand very low prices from their suppliers based on raw market power, then these companies are forced to seek to make up the lost income somewhere else. Sometimes this is resulting in prices being pushed up more than they ought to be for their smaller customers, including the wholesalers supplying the independent sector.
We would urge the government to expedite the proposed Grocery Code Adjudicator as at least one way to encourage a sensible balance between big grocery retailers and their suppliers.
Ken Parsons, CEO, Rural Shops Alliance