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Grocery inquiry to include NFU recommendations

by 5m Editor
16 June 2006, at 12:00am

UK - The Competition Commission’s issue statement published today takes on board many of the recommendations proposed by the NFU in its consultation.

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Food supply chains, consumer choice and alleged supermarket abuse of power will form part of the Commission’s remit after it announced an expansion of its original parameters.

In a report to the Competition Commission’s investigation of the grocery market, the NFU identified a number of specific examples of malpractice including:

Significant upfront payments being demanded by retailers from suppliers in the tendering or re-tendering process – sometimes running to millions of pounds as has happened recently in the dairy and red meat sectors.

Suppliers being required to pay retailers an annual payment based on a percentage of their turnover.

No written terms of business in place and retailers frequently changing the verbal terms of business at short notice or in some cases retrospectively, including across the board price cuts.

Suppliers being required to pay for promotional activity and then having to take a lower price for their product because of the promotion.

Short notice changes in volume of product required by the processor or to the specification of product required.

Auctions being held to determine who is prepared to pay the retailer the most to be able to supply them.

NFU president Peter Kendall said: “This is a positive move by the Commission to fully investigate the current situation of the United Kingdom grocery market and the adverse affect it is having on the current supply chain.“

The PigSite Newsdesk

5m Editor