In what could be seen as a major boost in the fight to get fair trading conditions for growers, the Competition Commission has ordered two supermarkets to hand over emails amid allegations that they have used bullying tactics to put pressure on suppliers to cut prices - or face having their contracts terminated.
The Competition Commission confirmed that legal notices, called Section 109s, had been served to Tesco and Asda as part of an ongoing investigation into the ‘big four’ and their market dominance in the UK.
Last week, a survey released by Grant Thornton revealed that many growers blame their dwindling numbers on pressures put on them by the supermarkets.
The move is expected to be widely welcomed within the horticultural industry. One supermarket supplier, who did not wish to be named, told Commercial Grower: "It's about time they did this. It's just a shame they are only looking at Tesco and Asda. The retailers are all tarred with the same brush and should all be investigated.
“Because of this intimidation suppliers have been loathe to do anything. Now they will find stories of apalling behaviour. The NFU should now be lobbying for this to be extended to the other retailers - B&Q, Sainsbury's, Homebase - all of them.”
John Smith, managing director of fresh produce supplier Greyfriars, was keen to stress that not all supermarket buyers use bully tactics. “It’s a question of balance. We haven’t had a bad experience with the supermarkets that we currently supply. At present, the net price we negotiate is the net price we get - I think this is preferred by growers.
“If we need to work together with Morrisons for a promotion, then it’s discussed, understood, funding balances agreed and then its triggered - we feel we’re sitting at the table with grown-ups. Equally if it doesn’t stack up - the idea is abandoned with no animosity - this is how the relationships should work.”
The Competition Commission has urged any growers with reports of threatening behaviour by supermarkets to come forward.
“People can contact us in confidence,” a spokesman told Commercial Grower. “If they contact us, we’ll discuss with them how their evidence can be handled so they’re happy every step of the way”.
Both supermarkets at the centre of the current investigation have denied the allegations. In a statement, Asda insisted: “We observe the supplier code of practice. Suppliers are our partners, they’re as important to us as we are to them, and we have that in mind in all our dealings with them.”
And a Tesco spokeswoman was also quoted as rejecting the accusations, saying that the supermarket has “nothing to hide”.
“We expect the commission to conclude that at Tesco, relationships with suppliers are professional and act to the ultimate benefit of the customer,” she said.
Asda also pointed out that the Commission has called for an exceptionally large amount of correspondence. “We’re currently making them aware of the huge volume of emails this will generate - over 11 million - and are asking them if they wish to be more specific about what they’re looking for,” said the statement.
However, a spokesman for the Competition Commision retorted: “We would hope to have a sensible filtering process in place. We’re not interested in every email that was sent over the period that we’re investigating. We’ve described to the supermarkets in question what we’re looking for, so hopefully we can work out a sensible way of finding that.”
No comments yet