Supermarkets were accused of using their market power to squeeze the margins of their suppliers by Tory leader David Cameron this week.

Addressing the Oxford Farming Conference, Cameron urged competition authorities to crack down on practices such as retrospective discounting and making producers pay for in-store promotions. "We will be watching to make sure they do," he added.

In his speech the Tory leader put emphasis on improving access to local food. He coined the phrase "food patriotism" and called on manufacturers to improve their labelling so it was easier to identify local and British food in shops.

Industry experts agree that local sourcing will be a key battleground in 2007. Efforts are being ratcheted up by the multiples as local food graduates from niche to mainstream via own-label and deli counter products.

"Local and regional sourcing is only now beginning to build as customers are becoming more aware of food miles and the provenance of food," said James Laws, Sainsbury's Northern Ireland commercial manager.

Rob Hollier has staked his fortune on it, setting up online retailer Local Direct to supply shoppers in Gloucestershire and Worcestershire with the counties' produce.