Big-store 'bullies' put on the spot

THE big four supermarket chains are to be taken to task over claims that they bully suppliers, particularly farmers.

Consumer Affairs Minister Gerry Sutcliffe will question the bosses of Tesco, Sainsbury's, Asda and Safeway/Morrisons over allegations that they misuse their enormous financial muscle.

The firms are accused of boosting profits by slashing the price they pay suppliers, then failing to pass enough of the saving on to their customers.

They are also said to demand large sums of money from some producers simply to keep their goods on the shelves. It is claimed suppliers also have to pay for 'special offer' promotions, cutting their profit margins even further.

Farmers often have to meet the costs of damage and wastage to produce, even after it has left their premises.

The Office of Fair Trading is already looking into claims that the supermarkets' code of practice, which is supposed to protect suppliers, is failing.

Now Sutcliffe is to carry out his own investigation.

A spokesman for the Department of Trade and Industry said: 'The background to this is the supermarket code. Gerry Sutcliffe is aware there are concerns about that.

'He is keen to meet the key parties in the industry. It has been suggested that the code is not working to protect the interests of farmers.'

Farming groups say suppliers are too scared to complain as many would face ruin if a major store cancelled a contract.

The big chains have enjoyed huge success over the last decade, with Tesco's annual profits surging towards a record £2bn.

The failure of the code has brought demands for a watchdog to police the all-powerful stores.

John Breach, chairman of the British Independent Fruit Growers' Association, said the code and rules were 'worse than useless'.

Pointing out that the supermarkets themselves helped to draft them, he added: 'We need a pro-active regulator that would ensure fair play.'

A National Farmers' Union spokesman said: 'We still hear stories of malpractice. But no one wants to put their head above the parapet.'

Liberal Democrat rural affairs spokesman Andrew George said regulation had failed, giving supermarkets a free rein.

The stores were operating within 'the retail equivalent of the laws of the jungle, so using their muscle to squeeze suppliers is entirely rational'.

The British Retail Consortium, which represents the major supermarkets, dismissed Sutcliffe's concerns.

A spokesman said: 'We are not entirely convinced of the value of this meeting, considering there is already a formal OFT investigation under way into the code of practice.'

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