John Murphy Director general, FWD
For UK grocery wholesalers, the Competition Commission's report represents a chronicle of wasted time and missed opportunity.
It discounts entirely the damaging impact of unfair pricing differentials (up to 15%) revealed in the report that wholesalers continue to suffer as a result of supermarket buyer power. These higher prices in turn affect the competitiveness and viability of smaller shops in an ultra tough grocery market. These anti-competitive differentials were first uncovered by the Commission in its report in 2000, but wholesalers had long been aware of them on an anecdotal basis.
FWD, therefore, urged the Commission to get to the heart of the pricing issue from the outset. As it turned out, the Commission collected SKU-level data from 29 anonymous suppliers that covered a total of 141 unidentified branded lines. The sample represented a mere 2% of total grocery retail sales in 2006. In our opinion, it has done a less than adequate job in this crucial area and this has been exacerbated by a complete lack of transparency.
Another major criticism we have is that the Commission is holding to its singular view that c-store numbers are in growth rather than in decline. This is at odds with a wealth of evidence that FWD together with the ACS has put before the Commission. We find this disturbing because the reality of this trend has an important bearing on other aspects of the report such as the waterbed effect.
In contrast, the report focuses on the narrow aspect of a perceived need for greater competition between the big four. FWD believes the Commission has failed to discharge its statutory duty to ensure long-term choice and diversity across grocery.
Grocery's answer to Dr Beeching Colin Finch National President, National Federation of Retail Newsagents
Sir; The NFRN is dismayed that the Competition Commission has ignored the plight of small shops in its two-year investigation into the grocery market. It is clear that the decline of small shops, small suppliers and small farmers is not of concern. All we can expect now is even more clone towns with more supermarkets being built next to one another. Wherever there is a Tesco or an Asda there will now be a Morrisons or Sainsbury's coming along.
It is our belief that Competition Commission chairman Peter Freeman is doing to small independent retailers what Dr Beeching did to the railways in the 1960s.
We are also disappointed the focus of the inquiry changed. Originally it was to be an inquiry looking at grocery dominance of the convenience sector. However, somehow this became an inquiry into the grocery market as a whole. And we are very concerned that key national issues of sustainability in general and the Sustainable Communities Act in particular have also been ignored.
While we are pleased to see the appointment of an ombudsman, this good intention is ruined by the fact that inquiries can only be initiated as a result of supplier complaints. The ombudsman should be investigating the market as a matter of routine, not waiting for complaints.
A good story behind rising basmati prices Jonathan Calland Head of external affairs , Tilda
Sir; Your article 'Threat of basmati export ban grows' (The Grocer, 26 April, p6) highlights current threats to basmati. Increasing costs, genuine physical shortages and high demand mean that prices for this premium product will inevitably increase.
However, the article doesn't touch on the positive aspect of this story.
Although consumers in the UK face high prices, increasing costs of basmati are symptomatic of the industrialisation and economic success of India, which we can only celebrate.
Basmati farmers are also benefiting. Because Tilda works closely with and buys direct from farmers, we fully understand these price increases.
When we buy our paddy, we pay the higher prices without any argument because we know that farmers have genuinely higher costs and that high prices aren't a result of speculation.
So, it's good news for farmers but, critically, good for basmati too. If farmers get fair prices, they will continue to grow this rare breed.
Meanwhile, Tilda is doing everything it can to preserve this highly prized rice, from extensive research into the best techniques for growing traditional basmati through to providing certified seed to farmers at cost and providing a helpline giving free information, advice and support to farmers.
So, despite price increases, the outlook looks positive for basmati and basmati farmers in 2008, as higher prices should halt the annual decline in production and lead to further investment in agriculture.
Pre-tax profit is up 65.5%, not 16.5% Keith Ross Finance director, Netto UK
Sir; With reference to the article entitled 'Store and range revamp ups Netto's profit 16.5%' (The Grocer, 3 May, p8), I would like to draw your attention to a miscalculation on your part regarding this particular figure.
Netto's pre-tax profits in 2006 were £6.3m and rose to £10.4m year ending 31 December 2007.
This represents an increase of £4.1m which, in percentage terms, is 65.5% rather than the 16.5% stated in your article.
As the UK's fastest-growing supermarket, our shoppers would be the first to tell you that our attention to price and quality are second to none so we certainly couldn't let this one slip by.