Kevin Hawkins wonders when will the BBC realise there is no evidence of supermarket profiteering
What goes around comes around. It seems the BBC is set to revive a theatrical folly last seen 10 years ago: The Great Rip-Off Britain Scandal.
The philosopher CEM Joad once observed that "the secret of successful journalism is to make your readers so angry they will write half your paper for you". The Beeb obviously took this to heart and tried to get a backlash going against big retailers in general and supermarkets in particular. A few dyspeptic farmers were persuaded to moan about farmgate prices, anonymous emails castigating supermarket "bullies" were uncritically quoted, while known anti-supermarket narks supplied much of the commentary, the whole being interspersed with dodgy figures on profit margins.
The result was a monumental flop. The Competition Commission crawled over the industry and found no evidence to support the "rip-off" allegations. Consumers ignored the whole episode and carried on shopping as usual. Undeterred, the BBC has kept sniping at supermarkets ever since prompted most recently by an obscure analyst's comment that big, multinational food manufacturers face collapse. A strange claim given the latest Grocer survey of the top 160 UK suppliers revealed no decline in average net profit-to-sales margins in the recession, which still hover at about 12%. The third and hopefully last CC inquiry came to the same conclusion.
A basic error common to much anti-supermarket propaganda is to focus on the gap between farmgate and final retail prices and infer that the bulk of this goes into retailers' pockets. Lazy, agenda-driven journalism never probes the "murky" middle sections of the supply chain beyond mechanically reproducing opportunistic e-mails from anonymous suppliers.
And lest any spokesperson for the manufacturers thinks I'm hinting at fat profits in that sector, let me make it clear that an objective analysis of costs and profits at each stage of the supply chain would reveal nothing of the sort. Food processors, manufacturers and retailers alike derive their profit margins primarily from scale economies, internal efficiencies and good customer service. The mature UK grocery market is far too competitive to permit any other outcome.
Will the Beeb take any notice? Of course not. Failure to unmask a villain equals bad TV. So here we go again.
Kevin Hawkins is an independent retail consultant.
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