Connect with us
Advertisement
Advertisement

Farming

Farmers and SMEs concerned by supermarket merger

Published

on

Merging?: Mike Coupe (L) with Judith McKenna (Walmart) and Roger Burney (Asda)

THE TENANT F​ARMERS ASSOCIATION (TFA) is calling for the Government to rethink its refusal to extend the remit of the Groceries Code Adjudicator (GCA) in light of the proposed merger between Asda and Sainsbury’s.

The planned merger, which will probably be referred to the Competition and Mergers Authority, would create the UK’s largest supermarket chain. However, a merged company would still not be as big as Tesco was only a couple of years ago, when that company had over 30% of the UK’s supermarket retail share.

The combined strength of the merged business poses a threat to suppliers, who could find their margins squeezed as the company would be able to depress prices paid to primary producers by manufacturers. That prospect was well flagged up during a BBC News interview with Sainsbury’s CEO Mike Coupe.

Mr Coupe told the BBC that there will be no store closures and no in-store staff redundancies, the inference that can be drawn is that jobs will go both in administration and back office operations, as well as logistics. The most likely way to deliver savings would be to increase the company’s margin or arrangements with producers and suppliers. Mr Coupe told the BBC that the merged company would have the potential to reduce prices through supply chain efficiencies.

Unfair practices within the retail supply chain led the Government to establish the GCA in 2013 to oversee direct supply contracts between retailers and suppliers. However it recently refused to extend the remit to include oversight of relationships further upstream between farmers and processors which could be impacted by the dominance of retailers.

TFA Chief Executive, George Dunn said “The merger between Asda and Sainsbury’s announced this week should cause the Government to rethink its strategy here. When Sainsbury’s boss Mike Coupe pledged to cut prices on everyday products by 10%, alarm bells rang out across the industry. It is suppliers who will be expected to shoulder the cost of these savings.

“There is a growing recognition that the food supply chain in the UK is dysfunctional and all too often it is the farming community which bears the brunt of the problems that this produces. Poor returns, last-minute changes in orders and specifications, unfair competition from abroad and poor labelling are all contributing to the pressures at farm level,” said Mr Dunn.

“Given that the vast majority of farm produce passes through at least one processor, if not more, before it hits supermarket shelves, the Adjudicator is therefore unable to consider the impact of retailer activity on many farmers,” said Mr Dunn.

Speaking in the House of Commons on Monday (Apr 30), Business Minister, Andrew Griffiths MP, referred to the work of the Groceries Code Adjudicator, but failed to address why the Government had decided to do nothing to protect primary suppliers. This was despite being challenged by Labour’s Shadow Agriculture Minister, David Drew MP on how the Government planned to tackle further potential supply chain abuse between farmers, processors and retailers.

“The TFA agrees that the GCA has had a positive impact on the groceries market by ensuring that there is a greater focus on the principles of fair trading. Retailers are now more aware of the need to ensure that they are not using their dominant position within the supply chain to engage in inappropriate practices. However the extent of the influence of the GCA is limited by its current legislative powers both in terms of the scope of its remit and its ways of working. The Government needs to act now to ensure that appropriate mechanisms are in place to guard against future abuse in the light of further concentration in the retail sector,” said Mr Dunn.

“Well-meaning initiatives aimed at improving supply chain relationships on a voluntary basis have failed to have the necessary traction across the board. We must deepen and broaden the GCA’s powers to allow it to look at the whole of the supply chain and not just direct supply contracts to ensure fairness in supply chains.​”​

Federation of Small Businesses (FSB) National Chairman Mike Cherry, said: “A merger of this size will concentrate a lot of power in the hands of one giant company, and it’s important that power isn’t misused to coerce small suppliers into accepting unfair contracts and poor payment terms.

“Those at the top of Sainsbury’s and Asda should explain how they plan to merge these two supply chains fairly, and give reassurance that cost savings won’t be achieved simply by milking their small suppliers for all they’re worth.

“When investigating this proposed merger, the Competition and Markets Authority should be looking for cast-iron commitments that a positive standard will be set for working with smaller suppliers.”

FUW President Glyn Roberts said: “The proposed merger will raise many concerns for farmers given the huge power a new mega company could exert over the supply chain.

“If the government were to allow such a merger, we would need to see a step change in regulation of the supply chain and the powers of the Groceries Code Adjudicator, otherwise there is a risk of severe abuses taking place which further undermine farmers and suppliers.”

NFU Cymru President John Davies said: “NFU Cymru and the NFU will be examining the details of this proposed merger between Sainsbury’s and Asda carefully and the further concentration of retail power it creates within the food supply chain. We will also seek clarity on what the structure of any merger will be.

“We will be requesting a meeting with Sainsbury’s and Asda to ensure that the commitment of the new business to British sourcing will not be affected. First and foremost the NFU Cymru and the NFU will be seeking to understand what potential impact a merger would have on our members – both those farmers who are directly part of these supply chains and those who could be affected by wider connotations.

“With just over 31% of the market potentially being held by one company the Competition and Markets Authority (CMA) is likely to consider the impact on shoppers – but that must also take account of changes to supply arrangements that could give rise to a reduction in choice and availability over the long term. The impact of the whole supply chain, all the way down to farm level, needs to be carefully assessed.

“NFU Cymru and NFU support any investigation by the CMA and we would aim to feed into this if approached.”

Welsh Liberal Democrat Spokesperson for Agriculture Cllr William Powell said: “Welsh farmers will be justifiably concerned this merger will produce a supermarket that is simply too powerful, leaving suppliers at its mercy.

“Farmers already work with tight profit margins and face the multiple challenges of Brexit, including diminishing farm support and obstacles to accessing the vital EU Single Market. This merger must not be allowed to threaten them further.”

Farming

2019 ‘a step into the unknown’

Published

on

IN HIS New Year Message Kevin Roberts, chair of Hybu Cig Cymru – Meat Promotion Wales (HCC) has said that never has a year brought such uncertainty, due to the ongoing political deadlock over Brexit.

Mr Roberts emphasised that the red meat industry, which brings £200m a year in export income for Wales and boasts the world-renowned PGI Welsh Lamb and PGI Welsh Beef brands, was one of the sectors with most to lose.

WTO Tariffs, which are likely to be levied in the absence of a deal, are 5-10% on many types of goods but on fresh red meat, they range from 40-80%. Independent studies have also identified the sheep sector, which is heavily dependent on exports of its premium-quality produce, as particularly vulnerable to a disruption in European trade.

HCC Chair Kevin Roberts said, “Throughout the past year, I’ve said time and again that the future is fundamentally bright for our industry. We have top-quality produce, brands which are recognised throughout the world, extremely dedicated producers and an industry which pulls in the same direction in promoting high standards in meat quality, welfare and sustainability.

“However, as 2019 dawns we find ourselves standing on a cliff edge,” he said. “Independent reports project a fall of 30% or more in farm-gate prices if there’s a chaotic Brexit, and farmers need certainty in order to invest and continue to develop their businesses.

“HCC is working with Government and others to put contingency plans in place as far as we can,” added Mr Roberts, “but the uncertainty and the range of potential outcomes are so great – just three months before the exit date – that the complexity involved is immense.

“Our industry’s New Year wish is simple; to be able to trade freely and fairly and have some certainty for the future.”

Continue Reading

Farming

NSA hits back at vegan campaign

Published

on

THE ARRIVAL of a new year is often a time of optimism, of making plans for the year ahead, but increasingly for livestock farmers, January is now the time producers find themselves arguing a torrent of false claims of crimes against animal welfare, the environment and human health that the media are so quick to promote as part of ‘Veganuary’.

And this year, the National Sheep Association (NSA) is ready to fight back against what it says is ‘a misguided and misleading campaign’.

NSA Chief Executive Phil Stocker says: “Make no doubt about it, behind the positive messages about Veganuary lies a well-coordinated campaign against livestock farming. Our concern is that our unique grass-based method of sheep production in Britain is hidden within more global and general statistics.

“We are seeing criticisms from welfare campaigners, rewilders, climate change campaigners, and health campaigners – but all these are connected and ignore the fact that UK sheep farming works very much in harmony with our environment, our landscapes, and our human ecology – creating a countryside the majority of the public love and producing a food product that is healthy and nutritious within a balanced diet.

“The climate change arguments that have been buoyed by the recent Paris Climate Change Summit ignore the fact that red meat from livestock that is part of a grass-based system is different from that raised in feedlots and in intensive situations. Even more misleading is that the carbon footprinting tools we use do not take account of whole life cycles and ignore the role of grasslands and grazing animals in storing carbon and organic matter in our soils and even in the wool they produce. I would go as far to suggest that ‘organic greenhouse gas cycling’ from grazed livestock should be treated separately from gas emissions derived from fossil fuels.”

NSA says the UK should be seeking to maintain or even increase sheep numbers here in the UK, related to market demand, but further encourage the distribution into areas that are devoid of livestock in order to provide the multi-functional outcomes that people are interested in today.

Mr Stocker concludes: “In the UK sheep are a form of positive and regenerative agriculture which keep our uplands and permanent pastures in good condition and improve our cropping lands in terms of soil quality and the ecological benefits of a return to mixed farming.

“Some people seem hell-bent on portraying sheep as a global enemy, but in fact, they are the ultimate in renewable technology and are an efficient form of productive land management that is planet friendly.”

Continue Reading

Farming

Sheep and goat inventory

Published

on

NFU CYMRU is reminding farmers that the 2019 Annual Sheep and Goat Inventory forms must be returned by February 1.

The form is a legal requirement and must be returned by no later than Friday, February 1, to avoid an increased risk of being selected for an inspection. The form should include the number of sheep and goats of which the farmer is the registered keeper, by CPH location, on January 1, 2019. Farmers must also record the number of sheep and goats on January 1 in their on-farm flock record to avoid a potential cross-compliance penalty.

Sheep and goat keepers have the option of completing the form online via www.eidcymru.org. However, keepers must have registered to EIDCymru prior to submitting the online inventory return. If you are completing the form electronically, you do not need to return the paper form

Continue Reading
News11 hours ago

Llangwm: Solicitor jailed for six years for £1m fraud

A PEMBROKESHIRE solicitor who overcharged clients by almost £1m has been jailed this week for six years. Edgar Stephen Thomas,...

News14 hours ago

Road re-opened following successful bridge replacement

PEMBROKE ROAD in Merlins Bridge, Haverfordwest, has re-opened and train services between Whitland and Milford Haven have resumed as normal,...

News1 day ago

Narberth man sent a semi-naked photograph of his ex to her own son

UNABLE to accept his relationship was over, a Narberth man sent a semi-naked photograph of his ex to her own...

News2 days ago

Merlins Bridge: Work to replace first of two railway bridges well underway

WORK to replace the pre-war Pembroke Road railway bridge is well underway this weekend. As part of the £4.25m upgrade project, engineers...

News4 days ago

Parents concerned over teenage ‘gangs’ threatening violence

CONCERNED parents of Ysgol Harri Tudur pupils have taken to social media after an incident involving teenagers from Milford Haven...

News4 days ago

Begelly: Driver who crashed into JCB was ‘blinded by sun’

A DRIVER who was blinded by early morning sunlight was involved in a crash with a JCB in Begelly yesterday...

News4 days ago

Dropping a fag butt cost nine people hundreds of pounds

NINE people were summonsed to Haverfordwest Magistrates’ Court on Thursday (Jan 17) after being charged with dropping cigarette ends. The...

News5 days ago

Milford Haven School: Police called over 120 times in just two years

FIGURES obtained by The Pembrokeshire Herald have highlighted the scale of police involvement in Milford Haven School over the last...

News5 days ago

Milford Haven: Booms to be removed following oil spill

BOOMS installed earlier this month to contain an oil spill in the Milford Haven waterway will be removed tomorrow (Jan...

News6 days ago

Fishguard: Sex offender caught trying to flee to Ireland

A sex offender from Bow Street near Aberystwyth who tried to move to Ireland without telling anyone has been jailed....

Popular This Week