Tesco’s annual profit of £2.25 billion is further demonstration that there must be a more equitable share of profits in the food industry, according to NFU Scotland.  The Union has stressed again that the increases in margins and profits at the retail end of the supply chain contrast with an ever tighter squeeze on supermarket suppliers and farmers.

NFUS, together with the other UK farm unions, has been campaigning for a full OFT inquiry into the grocery sector, with particular focus on the operations of the major supermarkets.  NFUS believes that the supermarkets’ trading tactics are causing serious damage to the UK food industry, with consumers set to suffer the consequences.

NFUS President John Kinnaird said:

“Tesco’s profit is greater than the total output of all of Scotland’s 20,000 farm businesses put together.  It clearly demonstrates that there is enough money being made in selling food and drink in this country to provide a sustainable return to every link in the supply chain – not just the big players at the retail end.

“I am not against efficient businesses, nor tough competition.  However, when tough competition crosses the line and power is misused, there must be action.  The market is not working well for consumers.  Despite having prided themselves on offering choice to their customers, the supermarkets’ continued squeeze on food processors and their farmer suppliers is threatening the future supply of quality Scottish and British produce; ironically at a time when demand for it has never been higher.

 “I met Competition Minister Gerry Sutcliffe in London again last week to stress our concern at the climate of fear that now exists in the food chain.  Supermarket suppliers are too often mistreated, yet are too afraid to officially complain for fear of reprisals.  This is not just about Tesco, it is about how the whole food industry operates.

“The Competition Commission was concerned enough about this issue six years ago to demand a Supermarket Code of Practice.  But it has been a waste of time because there is no protection offered to those suppliers who wish to use it.”

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