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Supermarkets' Power 'Destroying Farmers'

by 5m Editor
18 April 2007, at 8:47am

UK - Farmers are effectively subsidising consumers and supermarket giants, according to Roger Williams, the Liberal Democrat spokesman for food and rural affairs at Westminster.

Speaking yesterday after the announcement that Tesco had posted record profits of £2.55 billion, Williams warned that the power of the supermarkets was destroying British farming.

The latest figures from the government's Office for National Statistics show that retail food prices have fallen in real terms by over 5 per cent since 2000. However, the decline over the past 20 years, again in real terms, is more than 20 per cent.

In 1994, beef finishers were receiving 225p per kilo on a deadweight basis for prime cattle; the current value, on a UK basis, is less than 210p per kilo.

The greatest fall in real terms relates to poultry meat, where a kilo of chicken or turkey is now just short of 50 per cent cheaper than 20 years ago.

Ten years ago the average ex-farm price of milk was just short of 25p per litre. Current values are no better than 19p per litre.

Williams said: "These figures show the huge imbalance in the UK groceries market. Tesco's profits are a staggering 13 per cent higher than last year. Meanwhile, the once-thriving farming industry is over a barrel, with many farmers struggling to make a profit.

"Supermarkets are raking it in by keeping prices static and passing costs on to farmers. For every £1 consumers spend on food in supermarkets, just 8p goes back to the farmer."

Supermarket practices and margins are under scrutiny by the Competition Commission. The findings were expected to be made public in June, but that date is slipping, according to Williams.

Source: Business.Scotsman

5m Editor