NFU Scotland has welcomed the announcement that the Office of Fair Trading
(OFT) has referred the grocery market to the Competition Commission for
investigation.

NFUS, together with the other UK farm unions and groups outwith the agricultural industry, has been calling for such an investigation in meetings with Scottish Ministers and the OFT. NFUS submitted evidence to the OFT which catalogued the misuse of power within the food supply chain.

NFUS President John Kinnaird said:

“Today’s announcement is great news and I’m encouraged that the OFT have listened to what we had to say.

“The misuse of supermarket power, if left unchecked, will seriously damage the UK food industry, with consumers set to pay the ultimate price. That stark message which we sent to the Office of Fair Trading (OFT) has now done the trick.

“I believe the remit of the inquiry will allow our huge concerns to be aired and, crucially, tackled with meaningful action. The investigation must recognise the fear amongst suppliers of reprisals and must therefore allow evidence to be submitted completely confidentially. This is the only way in which a clear picture will emerge.

“Farmers desperately need a trustworthy and transparent relationship with supermarkets but, at the moment, farmgate margins are being squeezed at the same time as supermarket profits are increasing. Consumers will ultimately pay the price for this unsustainable squeeze on farm incomes, as it jeopardises the production of local, healthy, fresh food; the very produce consumers increasingly demand.

“The relationship between supermarkets and suppliers can work extremely well. Trust and transparency should be the norm, but the misuse of power, where it occurs, only serves to perpetuate a climate of fear in the food industry.

“This cannot be allowed to continue. For the sake of farmers, the food industry and, ultimately consumers, the growth in supermarket power and its consequences must be addressed and I look forward to being involved in the process of ensuring that all within the food supply chain get a fair deal.”

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