Suppliers under pressure from retailers, The Grocer magazine

An article in The Grocer magazine reported suppliers were coming under pressure from retailers as the magazine continued its report into the new supermarket price war resulting from the launch of Tesco’s new price drop initiative. This letter was sent from the NFU’s Director of Corporate Affairs Tom Hind. 

Sir

Ronan Hegarty’s article describing the attempt by some retailers to seek cost reductions from suppliers serves as a timely reminder about the need for a Groceries Code Adjudicator to ensure fair dealings within the supply chain (Waitrose demand a 5% cut from suppliers, The Grocer Saturday October 8 2011).

Experience of previous price wars waged by grocery retailers indicates that it is usually suppliers – farmers and manufacturers – who bear the brunt of attempts to ‘share the pain’. We aren’t opposed to robust commercial dealings between businesses in a tough market climate but we are opposed to attempts to use unfair commercial practices to recover lost margins simply because retailers decide to cut prices to consumers.

For this reason we will be watching very carefully what happens over the coming weeks and will be calling on Government to expedite the publication of the Adjudicator Bill.

Tom Hind
NFU Director of Corporate Affairs

 

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