EVERY LITTLE HELPS (NOT)

As Tesco begins a whole sale roll down of prices, to (they say) benefit consumers some serious concerns are being expressed about the consequences for our farmers and suppliers. Welsh farmers and food suppliers are concerned that the prices they receive for their produce are going to get driven down, as Tesco will make efforts to avoid cutting its profits.

With Tesco dropping some of its prices and effectively declaring a Price War on its commercial rivals and competitors, the question is whose going to pay for it? The £500 million pound 'Big Price Drop' is an attempt to maintain Tesco’s share of the market rather than grow it. The real question is will the Tesco shareholders or management be the ones who absorb the pain of the cuts? Or the farmers and suppliers?

The National Farmers Union (NFU) Cymru and the Farmers Union of Wales have serious concerns is about the prices farmers get paid for their produce. Their experience tells them that the larger food retailers often expect their suppliers to share the pain of any cut in retail pricing.

Tesco already has what could be described as a fraught relationship with some of the farmers it uses to source its products. The National Farmers Union has talked openly about a ‘Climate of fear’ in the (monopoly) world of modern food retail, where the small producers are too scared to speak out about the abuses that are impoverishing them because they may run the risk of reprisals and lose the only customers there are for their produce.

The Con Dem Government, just like it's New Labour predecessor, has been dragging its feet about the prospect of legislation to create a supermarket watchdog to investigate alleged breaches of the Grocery Suppliers Code of Practice. The code was introduced after the Competition Commission found large retailers were passing on excessive risks and unexpected costs to their suppliers.

Part of the problem may be that the Political parties may have readily got used to some of the perks of having a close relationship with the Supermarkets (or power companies, etc) with their glossy adverts in conference brochures, free food at funded functions, etc. One very old rule is that once you sell your virtue it stays sold, and once you sell your principles they stay bought and the end result is that the fabric of our democracy is damaged or tainted, and nothing in this life is free.

Perhaps a more pertinent question to ask would be what do they (the Supermarkets) get for their money? Or at least what are they seeking in lieu of their donations? Or even when do they get it? The answer may well be a weak and watered down Supermarket Ombudsman - which is the last thing any of us needs, whether as a customer, a supplier or a farmer.

STILL WAITING FOR A SUPERMARKET OMBUDSMAN?

Before the election, when every prospective politician was the farmers friend (or claimed to be at least) there was much talk from the big 3 London based parties about the need for a Supermarket Ombudsman. With potential votes in the offing all of a sudden it seemed a very good idea, especially if you were a Conservative, Liberal Democrat or Labour Party candidate, to talk up the prospects of having a Supermarket Ombudsman (with real teeth) who might be capable of protecting both the consumer, the supplier and the farmer from some of the more harsher aspects of monopolistic capitalism as practised by certain supermarkets.

Now don't get me wrong a Supermarket Ombudsman is a good idea and a measure of protection for the customer, the supplier and the farmers is a good idea that has (and is) long overdue - but it does seem to have gone awfully quiet since the election. When I was clearing my spare room I came across a hastily scribbled note from 2006 (probably in preparation for a Conference speech in 2006 / 2007) which even though we are a few years down the line should give most people some food for thought:

• The big '5' (in 2006) controlled almost 80% of the grocery sales in the UK
  

• Between 1995 and 2000 the UK lost one fifth of its local shops and local services - local post offices, local butchers, local branches of banks, grocers, etc


• The supermarkets have made and regular large donations (in cash or kind) to both New Labour, the Conservatives and other political parties.


• 54 years ago farmers received between 45 and 60% of the money that consumers spent on food.


• In 2006 it was just 7% in the UK, 3.5% int he USA and 18% in France.


• Gate prices don't make anything like a fair comparison with final Shelf price - in the UK farmers got (in 2006) something like 8 - 13% bellow the EU average gate price.

Now, if anything the situation is probably worse, there is a real clear and present danger that the Political parties have readily got used to some of the perks of having a close relationship with the Supermarkets, Power Companies, etc - with their glossy adverts in conference brochures, free food at funded functions, glossy paid adverts in conference brochures, etc. One very old rule is that once you sell your virtue it stays sold, and once you sell your principles they stay bought and the end result is that the fabric of our democracy is damaged or tainted.

A good and pertinent question to ask would be what do they (the Supermarkets) get for their money? or at least what are they seeking in lieu of their donations? The answer may well be a weak and watered down Supermarket Ombudsman - which is the last thing any of us needs, whether as a customer, a supplier or a farmer. Another question that needs to be asked is whatever did happen to that much vaunted pre-election idea of a Supermarket Ombudsman?

So far, not a lot...