A confectionery supplier has hit out at the supermarket chains after Morrisons rejected one of its products because the 31% profit margin it offered the retailer was considered too low.

Roy Willett, MD of manufacturing wholesale confectioner Willett Bros, said this showed supermarkets' buying power over suppliers was being exercised at the expense of independents - proving the 'waterbed effect' existed.

In a submission to the Competition Commission's grocery inquiry, Willett wrote: "I recently sent some of our confectionery to Morrisons at a price that showed a profit margin to them of 30.8%, which is more than I can buy from any manufacturer."

Willett included an email he received in reply from a Morrisons buyer.

It read: "We are logistically unable to deal with this type of distribution. I would also point out that our margin aspirations are much higher than those proposed."

This week, Willett said he had offered Morrisons 12 bags of boiled sweets with a retail price of 99p for £6.99 excluding VAT. The cheapest he could buy a leading brand's similar product for was £7.28, he claimed.

He said independents were "paying through the nose to subsidise supermarkets". The argument that supermarkets received better prices because they bought in bulk did not stand up, he added.

"The largest possible delivery on one truck is 26 one-tonne pallets. That's the delivery I get. The supermarkets get several trucks, but on an individual truck basis it doesn't cost less to deliver to supermarkets." Morrisons declined to comment.

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