Like many of those who come from rural Wales, I was glad that, finally, some of the biggest supermarket chains were brought to task last week by the Office of Fair Trading (OFT) for colluding to increase the price of milk and butter.
For some time there have been suspicions of anti-competitive practices by the biggest supermarkets, but little has been done because many suppliers have been too scared to give evidence to the myriad Government reviews of this area. This is despite the increasing problems faced by farmers involved in the supply chain, the clear and damaging effects on smaller shops, the loss of local competition and a reduction in retail choice within our previously flourishing market towns.
Research has shown that small independent shops employ more people pound-for-pound and keep more of each pound spent circulating locally than big stores, yet planners and local councillors fall over each other to grant permission for supermarket developments which have summarily squeezed the life out of the local retail sector.
In the case of the price fixing scandal, it is not the fact that consumers paid an estimated £270 million more for dairy products that worries me. It is the fact that there is no evidence that any of these price increases were passed onto to the producers of the goods, namely the farming sector. This is despite the supermarkets stating that providing support for the agricultural sector after the Foot and Mouth outbreak was the only reason for the price increase.
So, not only did consumers lose out, but the greed of the guilty supermarkets - Asda, Sainsbury's and Safeway in this case - ensured that the farmers who should have benefitted from the price increase lost out too.
We keep hearing about the importance of the farming sector to Wales and yet the Government does little to stop the anti-competitive practices within the supermarket sector. This has inevitably resulted in a “take it or leave it” attitude towards suppliers by large supermarkets.
It is incredible to consider that whilst the price which farmers are paid by retailers has stayed almost steady at approximately 18p per litre for the last six years, the price of milk in supermarkets has gone up from an average of 43p per litre in 2001 to 56p per litre in 2007.
Let’s start by helping the farming community directly.
Certainly, farmers in Wales are under considerable pressure, with the latest statistics showing that net farm incomes on cattle and sheep farms across most of Wales saw a 21 per cent drop in the period 2006-2007.
May I suggest that Welsh MPs lobby the Government to ensure that the estimated £80million paid by the supermarkets in fines are passed back the farming sector rather than finding their way into the black hole of the Treasury’s bank account?
Some of it could certainly compensate Welsh farmers for the loss of business due to the Government’s handling of the Foot and Mouth crises this summer.
Most importantly, our politicians should regulate to ensure that supermarkets have to pay farmers a fair price for their products, like any other business. If not, then the decline of the agricultural sector in Wales will continue unabated with serious consequences for local communities across North Wales.
For some time there have been suspicions of anti-competitive practices by the biggest supermarkets, but little has been done because many suppliers have been too scared to give evidence to the myriad Government reviews of this area. This is despite the increasing problems faced by farmers involved in the supply chain, the clear and damaging effects on smaller shops, the loss of local competition and a reduction in retail choice within our previously flourishing market towns.
Research has shown that small independent shops employ more people pound-for-pound and keep more of each pound spent circulating locally than big stores, yet planners and local councillors fall over each other to grant permission for supermarket developments which have summarily squeezed the life out of the local retail sector.
In the case of the price fixing scandal, it is not the fact that consumers paid an estimated £270 million more for dairy products that worries me. It is the fact that there is no evidence that any of these price increases were passed onto to the producers of the goods, namely the farming sector. This is despite the supermarkets stating that providing support for the agricultural sector after the Foot and Mouth outbreak was the only reason for the price increase.
So, not only did consumers lose out, but the greed of the guilty supermarkets - Asda, Sainsbury's and Safeway in this case - ensured that the farmers who should have benefitted from the price increase lost out too.
We keep hearing about the importance of the farming sector to Wales and yet the Government does little to stop the anti-competitive practices within the supermarket sector. This has inevitably resulted in a “take it or leave it” attitude towards suppliers by large supermarkets.
It is incredible to consider that whilst the price which farmers are paid by retailers has stayed almost steady at approximately 18p per litre for the last six years, the price of milk in supermarkets has gone up from an average of 43p per litre in 2001 to 56p per litre in 2007.
Let’s start by helping the farming community directly.
Certainly, farmers in Wales are under considerable pressure, with the latest statistics showing that net farm incomes on cattle and sheep farms across most of Wales saw a 21 per cent drop in the period 2006-2007.
May I suggest that Welsh MPs lobby the Government to ensure that the estimated £80million paid by the supermarkets in fines are passed back the farming sector rather than finding their way into the black hole of the Treasury’s bank account?
Some of it could certainly compensate Welsh farmers for the loss of business due to the Government’s handling of the Foot and Mouth crises this summer.
Most importantly, our politicians should regulate to ensure that supermarkets have to pay farmers a fair price for their products, like any other business. If not, then the decline of the agricultural sector in Wales will continue unabated with serious consequences for local communities across North Wales.
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