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June 16, 2006

UK: Suppliers welcome Competition Commission remit

The NFU has said that the Competition Commission Issues Statement, detailing the scope of its inquiry into competition in the grocery sector, has taken on-board a majority of the Farmers’ Union’s recommendations.

The NFU has said that the Competition Commission Issues Statement, detailing the scope of its inquiry into competition in the grocery sector, has taken on-board a majority of the Farmers’ Union’s recommendations.


Food supply chains, consumer choice an the alleged supermarket abuse of power will form part of the CC’s remit after the body decided to extend the range of the inquiry originally referred to it by the Office of Fair Trading.


During the consultation period between the CC and interested parties, the NFU identified a number of specific examples of malpractice, the group said. These included upfront payments demanded by retailers from suppliers; suppliers being required to pay retailers an annual payment based on their turnover; the lack of written terms of business and retailers reneging on verbal agreements; suppliers having to fund promotional activity such as bogofs and auctions being held to determine which food producers will pay the most to supply a retailer.


NFU president Peter Kendall said: “This is a positive move by the Commission to fully investigate the current situation of the UK grocery market and the adverse affect it is having on the current supply chain. We are delighted the commission has decided to take such a holistic approach in its investigations.”

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