According to Geest business director Stephen Holding, neither Geest's English Village Salads nor its new jv partner Thames Fruit was pressurised into forming the new sole importer company NewCo.
"The idea of pulling together imported product in this way was Asda's and it was down to us and Thames Fruit to come up with a solution," said Geest business director Stephen Holding. "There was no pressure from Asda at all."
But market analysts sound a warning note. "Compared to other sectors, the fresh produce industry has been lucky in that companies have tended to have a share of the spoils of supermarket business, whereas in other sectors we have seen sole suppliers already," said David Pattison of Plimsoll Publishing. "It is certainly a worrying trend for those who don't win supermarket business and this has been the point of the Morrison's investigation. These sort of deals where suppliers group together to make a package that is more attractive to supermarkets are more and more likely to happen and it brings us almost to a cartel situation."
Pattison also said that supermarket customers are effectively evolving the businesses of their fresh produce suppliers. The warning for those suppliers left by the way-side however is clear. "They won't be able to keep their place and in effect are being taken out of the market completely," said Pattison.
Holding said Geest is well aware of the risk. "EVS is a dedicated Asda business as is Thames Fruit, so you could say we already have our eggs in one basket," he said. "Yes, it's a competitive marketplace and there are sometimes winners and losers."
He denied, however that Geest's pulling out of Worldwide Fruit ñ a supplier to other major multiples ñ last month was part of a masterplan which included the formation of NewCo.
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