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Dysfunction in The Supply Chain Hurts Consumers

A major one-day farming event in Scotland has heard that the nation’s farmers are ideally placed to meet the opportunities presented in the future but ongoing dysfunction in the food and drink supply chain threatens the industry’s progress, with consumers set to pay the price.

Speaking today (Wednesday, 17 November) at AgriScot, near Edinburgh, NFU Scotland President, Jim McLaren said poorly performing supply chains across a number of key food sectors were driving farmer frustration with concerns over the future of consumer choice and availability.  There is already talk of a return direct action, targeted at major retailers, in the run up to Christmas.

Farmer protests in Scotland are already being considered for mid-December, primarily to highlight the poor milk prices many dairy farmers continue to receive.   Several such protests have already taken place in England, targeted at supermarket distribution depots.

Mr McLaren said:

“There is real potential for Scottish agriculture to grow significantly as an industry going forward. We are efficient, resilient and operating in a world of growing opportunity. 

“However, we are being held back in some sectors by a dysfunctional supply chain that, in recent months, has been showing its worst side.  Given that the vast majority of what is produced on Scottish farms ends up on a supermarket shelf, any failing supply chain is an unhealthy and anti-competitive state of affairs.

“There are many good things in the supply chain.  I make no apologies for singling out Morrisons for its commitment to the red meat sector in the UK and for making genuine attempts to re-engage with farmers.   Work to develop meaningful dialogue is helped by their position as a farmer and abattoir owner and their knowledge of the industry is growing day by day.  It is no surprise that Morrisons remain the only retailer willing to engage publicly with the industry on dairy supply chain problems and are likely to be the only retailer to take up the Cabinet Secretary Richard Lochhead’s invite to tomorrow’s Scottish Dairy Summit.  They are the exception and other retailers’ continued non-engagement is a disappointment.

“There is a high street price war ongoing, and farmers are being used as a commercial football - kicked about by retailers seeking to cut each others’ throats to secure more customers in their stores.

“We have been speaking to big suppliers and processors in recent days and the level of pressure they are facing over price is extraordinary and deeply damaging.  They are subject to blatant, clear anti-competitive practices, driven by greed and an arrogant wielding of power by their big supermarket customers. 

“This is not a plea to protect farmers - this is actually about protecting consumers.   The competition authorities have recognised that the supply chain is dysfunctional and consumers will pay the price of the unsustainable squeeze on suppliers.   Margins in the retails sector continue to be built while those on farm level suffer.  Is it any wonder that there are threats of protests outside retailers in the run-up to Christmas?

“Things must now change.  Retailers - who claim to serve the 21st century consumer - are in fact threatening the choice and availability they pride themselves in providing.   And as an industry, we need to stand as one.  We need to demand fair contracts and fair relationships.  Too often we have been picked off, convinced to take a rise here or there, but sacrificing long-term sustainability in the process.

“I have every sympathy with those who feel the need to resort to direct action to vent their frustration and we will work with them to achieve very similar goals.  This winter we will continue to take the argument direct to the supermarkets, and if we need to do that on their doorsteps for them to listen, then so be it.

“Consumers need protection from a market dominated by a few small players, who abuse their power too often and have absolutely no-one to answer to.” 

Ends

Contact Bob Carruth on 0131 472 4006

Date Published:

News Article No.: 161/10


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