The National Farmers' Union (NFU) is increasing pressure on retailers to sacrifice their margins in order to pay suppliers a "fair" price.

With the UK facing its sharpest economic downturn for 30 years, the NFU has said that retailers' should not push suppliers to drop prices in order to fund their aggressive pricing strategy, which is being used to attract consumers during the slump.

NFU president Peter Kendall will make the call in a speech to the Cardiff Business Club in Cardiff on Monday (November 17).

"It is not inappropriate to ask, in the wake of the damage done by unfettered, greed-motivated behaviour by some in the financial sector, whether Tesco should continue to chase every last pound of dividend for shareholders at the potential expense of massive damage to the rural infrastructure in this country," Kendall will say.

The "outrageous bully-boy tactics" adopted by the multiples has led to an increase in complaints received by the NFU from suppliers, the union said.
According to the NFU, supermarkets are increasingly demanding "unilateral price cuts", back payments and over-riders.

"While we fully recognise the plight of consumers and their need to buy good value food during the credit crunch, there is enough flexibility in the margin taken by retailers to offer competitive pricing without reducing the price paid to farmers, growers and other suppliers. A continuation of this policy will see the agricultural production base in this country irreparably eroded with diabolical consequences for suppliers," Kendall will warn.