The industry may be divided over the Competition Commission's findings but it's clear the food supply chain needs to change
When the Competition Commission announced its provisional findings on grocery practices, coincidentally on the same day as English Farming and Food Partnerships' (EFFP) annual conference, the industry seemed to breath an audible sigh. Inevitably it didn't go far enough for some but for others it went too far. But one thing I am sure of. It makes little sense to be waiting for the final recommendations - it's time to move on.
One message the commission spelt out clearly was the importance of competition. Today, competitive advantage comes not just from individual companies but also from the strength of the relationships between those in the supply chain. Everyone agrees relationships need to improve - and given that supply chain relationships are core to EFFP's strategy it seems a good place to start.
The marketplace is more challenging for everyone in the chain, which makes it all the more important for all parts of the chain to work together to improve efficiency, generate new ideas and find profitable solutions. The need for the industry to do this is even greater because of the changing dynamic developing in the food market. The imbalance between global supply and demand is growing, and consumers are becoming more interested in where their food comes from. The solution is for farmers and companies to work in partnership.
At EFFP's conference, senior retailers and the government called for greater collaboration from the farm to the shop floor. Speakers stressed it would require trust between partners in the chain. The real challenge is finding ways of working that will align incentives, create value and deliver mutual benefit. And we didn't need the commission to tell us that. We can learn lessons from abroad, but in many cases we will need to find ways of our own to make this work.
EFFP was set up to offer the food chain the benefits of farmer collaboration. Farmer groups are the proven way to get farmers sharing knowledge of efficient techniques and adopting market-orientated practices. From the viewpoint of downstream partners, farmer groups can more easily ensure information is passed on to their members and that as a group their response is efficient and appropriate.
In my role I see more evidence of food chain operators who are prepared to embrace change. And only through change can the food chain continue its phenomenal success of the past 50 years of providing consumers with choice, rising quality and competitive prices. So, should we wait for the commission's final report to be published? I don't think so.
Yes, some companies and farmers are unhappy with aspects of business, but in an industry with thousands of businesses it would be surprising if this were not the case. The true test of business leaders is to recognise that solutions are often the product of good management - opening and maintaining a mutually beneficially dialogue between buyers and sellers.
If the inquiry has been beneficial, it is not because of what it has said but because it reminds us that for everyone engaged in the food chain our futures are intertwined. Let us use the inquiry as the platform to develop a new era, in which channels of communication and cooperation will be enhanced to achieve an even more competitive food chain.n
Siôn Roberts, chief executive, English Farming and Food Partnerships