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NFUS: Time for Supermarket Abuse to End

by 5m Editor
24 November 2008, at 7:51am

SCOTLAND - NFU Scotland is reiterating its call for the fast introduction of an independent supermarket ombudsman, in light of recent reports of supermarket suppliers being mistreated.

NFU Scotland has long campaigned for the introduction of a supermarket ombudsman. Finally, in April 2008, the Competition Commission recommended such an appointment to oversee and facilitate relationships between retailers and their suppliers.

However, some of the UK’s biggest retailers are putting up resistance to the move. In the meantime, the domination that they exert over their suppliers, frequently to the detriment of those supplier businesses, and farmer growers in turn, continues.

NFU Scotland is demanding that the fundamentals underlying retailer and supplier relationships change to ensure that all businesses within the chain have the opportunity to be sustainable in the long term.

Jim McLaren, NFU Scotland President, said:

“Supermarket abuse and the difficulties suppliers face in complaining about mistreatment is not a new problem. For the past five years NFU Scotland has campaigned for an ombudsman and despite a ruling that one be appointed this is yet to be implemented.

“In the meantime, the retailers, both through the media and in direct communication with their consumers and suppliers, have been dressing up their supply chain relationships, highlighting them as wonderful, mutually beneficial partnerships. In reality, relationships are all too often one sided, the retailers hold all the power and suppliers are squeezed to within an inch of their economic lives.

“The credit crunch now seems to be giving the large retailers the apparent excuse to start a fresh round of ‘beat the supplier’ by offering shopper discounts that are being primarily funded by the suppliers at the bottom of the chain.

“In the last few days, I have spoken to a wide range of people, from vegetable growers to milk suppliers and meat producers and there is widespread anecdotal evidence of real abuses of power. These include over-riders where suppliers are made to pay for shelf space on terms that change at will, last minute alterations to payment terms and timescales and the use of promotions paid for by the supply trade.

“The reason that this evidence remains anecdotal is because there are now so few suppliers working with the supermarkets in each sector that they cannot complain for fear of their comments being easily attributed. This means that the supermarkets can, and do, run roughshod over those who supply them.

“What we want, with immediate effect, is a move away from loose ‘gentleman’s’ agreements which allow the supermarkets total control over their suppliers, to proper contracts that allow sustainable profit margins for everyone within the supply chain.

“If the warm words that the supermarkets have been speaking mean anything at all then the time has come for them to grasp the ombudsman recommendation with both hands.

“Only by acting immediately to ensure that their suppliers are able to operate sustainable businesses will supermarkets ensure future supplies of Scottish food and drink for their valuable customers.”

5m Editor