Suppliers told 'do it yourselves'

13 April 2005
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14 April 2005 | Cara Whitehouse

Supermarket buyers may face increased resistance from suppliers after they were told to band together through their trade associations to ensure fair trade terms.

The call to suppliers came from Duncan Swift, head of the food and agribusiness recovery group at accountancy firm Grant Thornton.

His comments came as supply-side bodies fought back after the Office of Fair Trading (OFT) ruled that supermarkets are generally compliant with the Supermarket Code of Practice.

But the OFT rapped suppliers for failing to voice their concerns through channels available.

Swift said the OFT's advice is flawed: "On the face of it this criticism of the suppliers seems reasonable, but it doesn't take the power imbalance into account.

"Under the code, aggrieved suppliers must complain to the supermarket first. The victim must complain to the abuser."

He called for a supermarket ombudsman to police the code and provide an independent organisation to whom any party could complain. He also called for the fair trade terms, which he said must be "brief, simple and cover only the key points".

He added that they should be in writing, like the terms for any contract of supply, and go out to the 10 top supermarkets, not just the big four - Tesco, J Sainsbury, Asda and Wm Morrison - that were investigated by the OFT.

A spokeswoman for the Food and Drink Federation agreed there is inequality in the relationship, with 80 per cent of food sold through four supermarkets.

"Suppliers have an overriding need not to jeopardise trading relationships with them by complaining," she said.


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