GIVE FARMERS A FAIR PRICE FOR THEIR FOOD
For every £1 we pay for our food, farmers get less than
26 pence, due to unfair practices by highly profitable supermarkets. Liberal
Democrats will introduce a legal duty to trade fairly, enforced by the Office of
Fair Trading. This will protect farmers and consumers from exploitation by
supermarkets and processing companies.
Liberal Democrats
recognise that the supermarket revolution has undoubtedly brought many
benefits. In store variety, lower prices, cleanliness,
efficiency, and even convenience meals.
Yet as the grocery market
consolidates more and more, the negative consequences of supermarket power have
become increasingly apparent:
- Between 1965 and 1990, 15 per cent of small rural settlements experienced the closure of their last general store or food shop;
- Between 1991 and 1997 a total of 4,000 food shops closed in rural areas;
- From 1997-2002, 50 specialised stores such as butchers, fishmongers and newsagents closed every week across the UK.
The death of many high streets and rural communities has often been
accelerated by growing supermarket dominance. Supermarkets
have also undoubtedly contributed to economic hardship among small producers,
such as farmers, and the climate menace of food miles (Supermarket lorries
travel up to 670 million miles per year.) Take, for example, the dairy
industry. While retail prices for milk have stayed static
since 1995, prices paid to producers have dropped by a third.
It’s little surprise that the number of dairy holdings has halved in the
past decade, in part as a result of the squeeze in prices.
Liberal
Democrats have long been ahead of the curve in highlighting the impact of
growing dominance of the "Big Four" supermarkets
in the groceries market (who between them
control over 80%) on competition and sustainable development,
particularly in rural areas.
The 1998 ‘Checking out the
Supermarkets’ report of our then Consumer Affairs spokesman, Colin Breed MP was
one of the first political agendas for action.
Since then, we have seen
the introduction of a voluntary Code of Practice intended to halt unfair duties
imposed on suppliers by supermarkets, such as retrospective reduction in prices,
exorbitant obligatory promotional payments and unfair third party
tie-ins.
However, the voluntary code isn’t working.
A report published by the Office of Fair Trading in
February 2004, Supermarkets Code of Practice, found that 80-85%
of respondents believed 'the Code
failed to bring about any change in the supermarkets’ behaviour’. 73% of
respondents 'reported a fear of
complaining amongst suppliers.’
Liberal Democrats propose:
- a tougher, legally binding code effective for the whole food chain from farm to fork to ensure all supermarkets do not exploit suppliers, farmers or consumers;
- the establishment of a Food Trade Inspector (FTI) within the OFT with powers to investigate proactively abuse of market power;
- an investigation into failing confidentiality guarantees for complaining suppliers and farmers to be undertaken by the new Food Trade Inspector;
- better support and advice to suppliers and producers considering forming co-operatives;
- a tougher approach to persistent below-cost pricing policies;
- the imposition of quotas on supermarkets for sourcing products locally.
