Mutual respect is the way forward

This week the annual Royal Agricultural Show at Stoneleigh has been highlighting the challenges faced by British farmers and lamenting declining volumes in the agricultural sector. Last week, The Grocer reported on the OC&C study, which found that suppliers to the multiples were flexing their muscles with their own suppliers. Somewhat ironic, given their complaints in the past. The impression is being created that these problems can be laid at the door of the UK multiples.

Given that impression, it is probably appropriate that the Competition Commission should again pay particular attention to the buying practices between suppliers and the major retailers. How­ever, I am not so sure that any practical solutions can be expected.

I think the supermarkets code of practice has shown itself to have no real effect. For sound commercial reasons, suppliers are very unlikely to complain about their customers and I cannot envisage any system that would work better.

The latest inquiry will, I hope, correct the error in defining top-up and full grocery shops separately but, whatever the conclusion, we have embarked on another lengthy and expensive study. Previous reports have consistently concluded that the price pressures exerted on suppliers have by and large been offset by better prices and value for money for consumers.

So where does the truth lie? Are our multiples responsible for all the ills of the primary agricultural sector and the challenges faced by the food processing industry, or have they brought a bright new world of better prices, better ranges and improved availability? I suspect the reality lies somewhere in the middle.

The large multiples are working on the basis that the big suppliers are perfectly capable of looking after themselves. However, increasingly these multiples are seeking innovative, high-quality primary producers who can bring better quality and value for money to customers.

It's the customer who will determine the fate of British agriculture and the supermarkets will play a big part in its future success. Customers are concerned about local produce, organic products, fair trade and the environment. The British farming sector is well placed to respond to these needs. The successful super­markets will be those who respond best to these challenges - and they will not succeed without mutually respect­ful relationships.jack


Former Safeway director, now development director at SB Capital Europe