NFU Scotland has warmly welcomed the announcement today by the Competition Commission (CC) that the treatment of suppliers by supermarkets, the viability of the supply chain and how these issues affect consumers will be at the heart of its new inquiry. The CC has today issued its ‘Statement of Issues’ which sets the remit of the inquiry.

Last week, in submitting evidence to the Competition Commission, NFU Scotland stressed that the growth of the major supermarkets has led, in too many instances, to an abuse of power. The result is a destructive financial squeeze on suppliers, passed down to farmers in the form of unsustainable prices, which will lead to a reduction in product quality and choice for consumers.

The CC announcement comes in the same week a report by MSPs raised serious concern at the impact of supermarket power on the future supply of Scottish food and drink.

NFUS President John Kinnaird said:

“I am extremely pleased that supermarkets’ treatment of suppliers and its affects on consumers is now at the heart of this inquiry. This is a massive consumer issue.

“Six years ago, the Competition Commission recognised that the squeeze on supermarket suppliers and the rest of the supply chain would result in lower product quality and choice for consumers. From that report, the Supermarket Code of Practice was born. However, since then, the situation has worsened as supermarkets have tightened their grip on the grocery market, unchecked by a Code which suppliers are too afraid to use.

“In a properly functioning market, there should be rewards and incentives for those producing and supplying quality food and drink that is in demand from consumers. Looking at farms across all sectors of the industry and processors in the middle of the supply chain, that is clearly not happening.

“We always said that whilst securing this inquiry was a critical step for the Scottish food industry, it had to cover consumer issues relating to the treatment of suppliers and the viability of the supply chain. The CC has committed to examining this which is extremely important news for farmers, rural communities and, most of all, consumers.”

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