A series of NFU Scotland meetings in London over the next two days will raise the concerns of Scottish farmers at both the power of supermarkets and the treatment of farmer co-operatives by the UK competition authorities.

Later today, NFUS will be meeting MPs at Westminster. Following that meeting, NFUS will meet Department of Trade and Industry Minister Gerry Sutcliffe MP. Mr Sutcliffe is responsible for consumer affairs and for ensuring fair markets. On Wednesday, NFUS officials will be meeting Office of Fair Trading (OFT) representatives.

The two key points NFUS will make at the meetings are:

• The need for the OFT to ensure its interpretation of competition law is consistent with other EU countries, particularly by removing its apparent objection to growth of farmer co-operatives beyond a 25 per cent UK market share;
  
• The need for an independent auditor/regulator to enforce a strengthened Supermarket Code of Practice and to ensure fair trade in the food supply chain.

Speaking before flying to London this morning, NFUS President John Kinnaird said:

“Like any industry, in order to prosper, farming must adapt and reinvest to take account of a changing world. And our world is changing - a combination of subsidy reform and the concentration of power in the food retail sector means that the relationship between the major supermarkets and the rest of the food supply chain is now the most significant determinant of farm business sustainability.

“However, our ability to prosper in this business environment is being hampered by two serious competition issues; firstly, the treatment of farmer co-operatives by the competition authorities and, secondly, how retailers use their increasing negotiating strength.

“Increasing our own strength in the market place is vital and co-operation within the industry is an obvious vehicle through which we can help ourselves. However, until our competition authorities send a clear signal that they recognise our market extends beyond our shores, attempts on this front will be stifled.

“The UK milk sector in particular has suffered from overzealous interpretations of competition law. Whilst we watch milk co-ops like of Arla and Frontera benefit from huge market shares in their home countries, Scottish co-ops have had the OFT knocking on their door when they get near a 25% UK market share. This over-the-top scrutiny of the milk market is not confined to just farmer co-operatives. Just recently, Wiseman found itself subject to investigation following an attempt to buy just 0.2% of the UK milk market.

“This unusual interpretation of competition law is made all the worse by the unchecked growth in supermarket power. Until there is an independent auditor or regulator proactively enforcing a strengthened Supermarket Code, suppliers will remain hostage to unscrupulous trading. And farmers and consumers will pay the price in the end.”

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