Short-termism may kill the hens that lay the golden eggs

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Four days after the government’s Competition and Markets Authority reported evidence that supermarkets are misleading customers with confusing pricing promotions, and announced a series of measures to improve compliance, bring greater clarity to shoppers and simplify the regulations, a reader from Shirley sent a link to another report.

Strengthen the adjudicator’s role

Christine Tacon, Groceries Code Adjudicator.

Christine Tacon, Groceries Code Adjudicator.

Food suppliers and farmers are being increasingly squeezed by a bitter supermarket price war according to insolvency specialists Begbies Traynor. They report that the number of food suppliers and farmers in significant financial distress has risen 54% since last year as they bear the brunt of supermarket price wars, demands for rebates and late payments. In the second quarter of this year, 1,622 food suppliers were struggling to make ends meet and of those, 89% were small suppliers, said Begbies Traynor retail expert Julie Palmer.

It is difficult to find information about giant retailers’ profit margins – the only relevant snippet came from City Insider (below): tesco profit-marginInstead of accepting the ‘squeezing’ supplier margins as business practice, the government spotlight should fall on the supermarkets’ profit margins and a fair price for suppliers – the brief of the groceries ombudsman should be extended, enabling Christine Tacon to regulate this sector more effectively.

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One response to “Short-termism may kill the hens that lay the golden eggs

  1. brid coady weekes

    the supermarkets have been squeezing farmers for years. The ombudsman either won’t investigate the unfairness or has not the power. If the latter what is she for?

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