There are so many factors at play as we dodge the flak flying in the credit crunch that it is difficult to know how to prioritise.

Every sector of the fresh produce industry, as well as every sector of the industries that rely on fruit, vegetable and flower trade for their own livings has their own, largely uncontrollable issues. But there is one common thread for each business in the land - the cost of operating is rising, and passing those costs along the chain is becoming increasingly difficult.

For supermarket suppliers, the fact that their customers are choosing this most difficult time to engage in battle with their competitors on price is galling to say the least.

I accept that, in the last couple of months at least, many retailers are taking a hit as they do this, rather than treading the path they have done in the past of barking orders from the trench as their suppliers disappear over the barbed wire and take the financial bullets for them.

The problems will more than likely come slightly further down the line; when the next set of tenders makes it clear to suppliers that it’s payback time. Supply chain costs will continue to spiral in the months and possibly years to come. But returns are unlikely to rise, and supermarkets are setting the industry up for another fall.

Buyers will ask for “understanding” from suppliers when negotiations begin in earnest. But is understanding sustainable? I’m not so sure.

Topics