The message to milk buyers and retailers today is that the Great Milk Robbery is unfinished business.Decision day looms on supermarket ombudsman
MPs have called on the Government to show its support for a supermarket ombudsman as the deadline for its recommendation looms.
Business Secretary Peter Mandelson has until tomorrow (Wednesday, November 4), to respond to the recommendation from the Competition Commission (CC) to set up a grocery market ombudsman.
In a debate in the House of Commons yesterday (Monday, November 2), Labour MP for Chorley, Lindsay Hoyle said the power of supermarkets was preventing farmers from making a profit.
He praised the resilience of British farmers in the face of outbreaks of foot-and-mouth disease and bluetongue but said supermarket power was a ‘persistent problem that severely limits the ability to maintain a viable farming business’.
He said: “Farmers are under constant pressure to reduce prices, often unable to make a profit.
“I believe the way to address these issues for the benefit of farmers and consumers alike is for the Government to follow the advice of the Competition Commission and introduce a watchdog.”
Mr Hoyle criticised the big retailers for failing to sign up to a voluntary agreement, and said supermarkets had failed to demonstrate a will to address the issues in the supply chain.
He said: “We know one pound in every eight is spent in Tesco proves how successful Tesco is. It shows that this is a great British company.
“One would argue it has been the success of Tesco which has allowed them to dominate the market. Because they have such a dominant position. because they are so powerful, they need to use that to ensure there’s a fair farmgate price in the UK.”
In response, Farming Minister Jim Fitzpatrick said he would not be drawn on what the Government’s decision might be but said Defra would play an ‘active role’ in discussions with the Department for Business Innovation and Skills (DBIS).
MPs are set to meet with Ministers at DBIS today (Tuesday, November 3), although a final decision on the ombudsman may not be guaranteed.
While Ministers are expected to put out a response, they could decide to delay an announcement on an ombudsman until it has made a final decision on another of the CC’s recommendations to implement a competition test for new supermarkets.
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Readers' comments (5)
Jenny Denton | 3 November 2009 2:06 pm
If the Supermarkets squeeze the primary producers any more they will put the nation on a non returnable starvation course. As the balance of payments certainly can`t afford to feed the nation by importing all our food.
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Gary wright | 3 November 2009 3:25 pm
every time the governments looks into the power of supermarkets,and findes it treats its, suppliers (farmers) unfairly on prices payed, you suddley find theres a few million quid payed into party funds, and the whole job gets sweped under the carpet, we have been here before and nothing ever happens.
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Linda Corfield | 3 November 2009 4:18 pm
In what other industry does the retailer put pressure on the primary producer to make available to them the primary producers accounts and costings, in order that they can then 'fix' the price they will pay their producers to keep them on or just above the breadline. This is happening in the Diary industry, under the pretext that the Supermarket has the suppliers interests as their main concern.
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Richard Micklethwait | 4 November 2009 12:44 pm
What this Government fails to understand is that a primary role of regulators is to protect capitalism from destroying itself.
The banks virtually destroyed themselves by the excesses of private initative,fraud and incompetence, but with politics following money, not the other way round, the taxpayer has had to stop the banks paying for their sins by being bankrupted.
Banks bought packages of mortgages and never even looked inside to see what they had bought, and were then surprised that they were not worthy much.
It was Brussels that forced the MMB to be wound up and with many of the Commissioners being communists or ex communists it is obvious that they never understood how capitalism really works.
The Revenue called Lehman Bros UK every week to ask how much tax they were going to pay. Lots of tax, lots of profit, that's okay then seems to be the thinking.
I cannot see how this new ombudsman is going to really increase farm incomes, and who is going to pay him and his office?
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tom jones | 8 November 2009 9:34 pm
we are at the brink of loosing our ability to feed ourselves without imports scarey!!!will the government thank the supermarkets when their shelves are becoming emptier of cheap foods?orwill tesco &co move on to a more lucrative sector such as banking where our leaders are actually asking them to come and help them with the banking disaster,meanwhile we still need to eat.
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