The National Farmers Union Scotland has called on the Office of Fair Trading and UK government to establish an independent regulator to ensure fair trade between the major supermarkets and their suppliers.
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NFU Scotland made the call after collecting evidence from Scotland’s top food and drink processors on how supermarkets misuse their dominant position.
“The public silence amongst supermarket’s suppliers speaks volumes,” said NFUS president John Kinnaird. “It is of absolutely no surprise that the OFT has received virtually no evidence of breaches of the Supermarkets Code of Practice. Many of the companies that we contacted required repeated assurances from us that any comments they made would never be attributed to them. That kind of fear within the food supply chain is totally unacceptable”
NFUS contacted the companies in light of the OFT’s recent report which again found virtually no evidence of breaches of the Supermarkets Code of Practice. NFUS, and indeed the OFT itself, has recognised that fear amongst supermarket suppliers of complaining against ill treatment prevents anyone using the Code to settle disputes.
Due to the ongoing fear of supermarket reprisals, the majority of suppliers NFUS contacted would only share their experiences on condition of strict confidentiality and none of the allegations of misuse of supermarket power can be attributed.
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By GlobalDataThe practices found by NFUS included loyalty payments (also known as slotting fees, charged to buy shelf space) are still demanded. Non payment can result in the loss of business, it said. There were also fees charged for artwork and re-packaging of products which were enforced and not negotiated. Supermarkets, the union said “like to ‘manage’ the public statements of their suppliers.”
“The concept of ‘reasonableness’ in changing contract terms, particularly payment terms, is one-sided,” it said. “The renegotiation of supermarket contracts is not always determined by price and quality of service. “
NFUS stressed that not all feedback from suppliers was negative. Indeed, NFUS did receive evidence that emphasised that there were many positive aspects to the supermarket and supplier relationship. However, it was clear from the overall evidence that current activity within the UK food and drinks industry is affecting competition.
