The Farmers’ Union of Wales today repeated its demands for the Competition Commission to create an independent ombudsman to enforce a stronger code of practice on the supermarkets for the supply of groceries after Tesco unveiled discounts on more than 3,000 products in its latest reaction to the retail price war.
"Tesco has claimed it will invest £100 million in a combination of permanent price cuts and promotions, but there is a real risk they will seek to recover this money from farmers by paying less for their produce, and forcing suppliers to meet unfair terms," said FUW president Gareth Vaughan.
"A downwards spiral in prices paid to farmers will simply add to the economic crisis and should be resisted.
"Last April the Competition Commission fully endorsed our campaign and called for an independent ombudsman in order to regulate unfair practices by supermarkets.
"At the time we warmly welcomed their report which followed bitter complaints from farmers and other suppliers over many years that unfair terms and prices were being forced upon small producers in order to satisfy the greed of large retailers."
But an ombudsman has still not been appointed, sparking Brecon and Radnor MP Roger Williams last month to accuse the Government of "appearing determined to connive" in preventing the setting up of the ombudsman.
Mr Williams raised the issue during a Commons debate on December 15 on the grocery sector when he stressed there was a huge amount of public support for a supermarket ombudsman.
Mr Vaughan said the FUW believes an independent ombudsman, coupled with compliance officers employed by supermarkets to oversee the implementation of a new Groceries Supply Code of Practice, will be a major step forward in ensuring supermarkets provide a fair deal for all suppliers, including farmers.
Mr Williams’ Lib Dem colleague, St Ives MP Andrew George, told last month’s Commons debate that the Cross-Cutting Group - a broad alliance representing more than 500,000 concerned consumers, farmers, and businesses - had commissioned Prof Roger Clarke of Cardiff business school to look at the potential impact of an ombudsman on the consumer’s best interests.
Mr George added: "Prof Clarke says that an ombudsman ’will reduce the problem in supplier/retailer relations whereby the abuse of buyer power in the short run has negative effects in the longer run tending to raise prices to consumers’.
"Secondly, it ’will reduce risks to suppliers enabling them to invest for the longer term and provide benefits from new innovation such as better quality products and more product variety’. Thirdly: ’The costs of this policy as envisaged by the Competition Commission are likely to be very small while failure to introduce an Ombudsman is likely to lead to a significant weakening of the policy’."
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