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OFT must protect suppliers from supermarket power - George

June 18, 2004 12:00 AM

Commenting on Tesco's announcement of further increases in their market share and sales, Andrew George MP, Liberal Democrat Shadow Rural Affairs Minister, said:

"We are told this is a cutthroat business. But the casualties are the supermarkets' suppliers, smaller competitors and independent traders.

"I don't criticise any of the big four supermarkets for using every ounce of their power to pressurise and bully their suppliers, including the farmers, who are going out of business in their droves.

"Supermarkets operate within the laws of their jungle.

"If Tescos weren't prepared to take full advantage of their ability to dictate market conditions and decide the very fate of supplier companies, then their competitors would. And in doing so, would gain a competitive edge.

"The bottom line is profitability and growth. Being nice to their suppliers doesn't really come into it. To an extent, you can't blame the supermarkets for that.

"But I think it is time that the Government took action to protect suppliers. The scales have tipped too far in favour of supermarkets.

"The creation of a food trade inspector, within the Office of Fair Trading, given powers to proactively monitor the nature of contractual relationships between supermarkets and supplier organisations would help to tip the scales back to a more equitable system of commerce.

"What is happening now is unsustainable for British farming in the long term."