The evidence contained in this week’s Competition Commission (CC) emerging thinking document has left many disappointed and fearing a whitewash.
The information published represents the first stage of the CC’s investigation into the supermarket sector and its relationship with suppliers. “We have considered the evidence supplied,” said Peter Freeman, chairman of the CC and of the inquiry group. “Whilst these have not indicated widespread problems in the supply chain, there are still concerns…There may well be many more examples out there but we need to hear them otherwise we would have difficulty coming to a conclusion. So we would appeal once more for suppliers with examples to come forward and assure them that requests for confidentiality will be taken on board.”
Freeman said the main concern now of his office is to focus on competition between retailers at local level. “We need to see what choices shoppers have in particular areas and how competition works between retailers of different sizes,” he said.
The Commission is required to publish its final report by May 8, 2008, but is aiming to publish six month earlier, by the end of this year.
The 60-page emerging thinking document summarises evidence gathered so far on the issues of the supply chain, land banks and planning but it has left many suppliers dismayed.
“The whole thing is a farce,” said one. “No supplier is ever going to squeal on a customer. They treat us like morons and the way they behave is so unprofessional, with the exception of Marks & Spencer and Sainsbury’s who are a pleasure to deal with. You go to meetings with them and it is a question of ‘how high do you want me to jump?’”
He is not alone. “It is a shame really, as the CC is not going to get anyone more to respond,” said another. “The supermarkets just have too much power - even if you did give the CC information confidentially, what will they do with it? The whole process has no teeth.”
But not all suppliers are so disenchanted. WWF is very positive about its dealings with supermarket customers. “We don’t feel like we are being abused,” said WWF’s marketing director Steve Maxwell. “We went to see the commission and gave evidence. We do not have a problem with it.”
But there are clearly some who despite confidentiality assurances from the CC are not prepared to take the risk. “I know one group of producers who met to go up to London on the train to meet the CC, but turned back as they were afraid that CCTV footage of them might fall into supermarket hands and cost them their livelihoods,” said one industry insider.
And C John Smith of Greyfriars, pictured, a Morrisons sweetcorn and mushroom supplier well known in the industry for his outspoken views, believes that the supplier dealings have improved and the market faces different issues. “The real issues at the moment are about the economic environment that this government has allowed to evolve has enabled supermarket concentration to take place while supply-side concentration has not occurred at the same rate,” he said.
“Now it is not so much about supermarket behaviour and there is compliance, pretty much, with the code of practice. As suppliers we have got to sharpen our pencils and look at more innovative ways to supply produce and unfortunately, that often means moving to lower cost areas of supply that are not necessarily in the UK,” Smith said.
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