Supermarkets hit back at supplier bullying claims

5 February 2004
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05 February 2004 | Robin Parker

The UK's four biggest supermarkets have hit back over fresh claims that they are harming suppliers' livelihoods.

Pressure groups, including Friends of the Earth, along with Sir Don Curry, chairman of the government's food and farming commission, have accused Tesco, Asda, Safeway and Sainsbury's of abusing their market position at suppliers' expense.

Friends of the Earth, speaking for an alliance of suppliers' and farmers' groups, called for urgent action to stop supermarkets' "bully behaviour".

The alliance wants the government to appoint an independent retail watchdog to take legal action against companies that breach the Department of Trade and Industry's code of conduct for supermarkets and suppliers.

Last month, Sir Don told The Guardian of his concern that supermarkets planned to make around £1 billion in price cuts this year "without serious thought being given to the impact on the supply chain".

Both parties want the Office of Fair Trading to publish its review as soon as possible. The code is voluntary only for the four big supermarket groups, which between them have three-quarters of the market.

An OFT spokesman said the report was delayed when Safeway was put up for sale last year, but it would come out next month.

Friends of the Earth said in a statement: "The existing code makes it difficult for both UK and international suppliers to invest in environmental or animal welfare standards or improve working conditions, because supermarkets are passing unreasonable costs back down the supply chain."

A Tesco spokeswoman said the supermarket group was committed to the spirit of the code.

"We have trained all of our buyers in its application but the code is not broad enough," she said. "It should not be restricted to the big four supermarkets, as this means leading companies in other sectors are not bound by its terms."

Asda said talk of a price war was pure speculation and that there remained a lot of misunderstanding about what the current version of the code said.



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