Today’s press reports claiming the retailer, ASDA, is demanding upfront payments from its suppliers - if true - demonstrates a complete disregard for the business pressures on producers and suppliers, according to the NFU.
This sort of activity was frowned upon in the recommendations of the 2000 Competition Commission Review.
NFU President, Peter Kendall, said: “I was disgusted when I read reports this morning. I find it sickening that this sort of thing is going on in full view of the Office of Fair Trading (OFT). In my view this is a clear abuse of power. Enough is enough, it must stop.
“This is just the latest of a series of examples demonstrating what is happening in the supply chain on an almost daily basis. This is symptomatic of the one dimensional approach to competition policy that is adopted by the OFT in relation to the grocery market. Unchecked, this situation is worsening as competition becomes more aggressive.
“The NFU has been concerned for some time that the OFT policy appears to be: If it looks good for consumers because it is reducing prices then it must be fair trade. The fact is, this sort of abuse of power is doing untold damage to the UK’s food supply chain and it appears to be completely off their radar.
“It cannot be in the long term interest of either the economy, or consumers, for the life blood to be squeezed out of the UK domestic food supply chain as part of the retailer’s strategies for gaining market share of the grocery market.”
The NFU will be responding to the OFT’s proposal to refer the Grocery Market to the Competition Commission next week.
Mr Kendall said: “We will respond to the OFT proposals next week, but quite frankly we cannot wait for a long drawn out exercise by the Competition Commission to sort this out. We need urgent action and we need it now. The sheer scale of what is happening in today’s market is not sustainable and cannot continue.”
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