Supermarkets Forcing Out Britains Fruit Growers

Mon, 06 Aug 2007
 
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British fruit growers are finding it increasingly difficult to stay in business because of the dominance of Britain's supermarkets, according to new findings by the Competition Commission .

Fruit growers in the UK are in long-term decline, with incomes falling by 20 per cent between 1996 and 2005 as the main supermarket chains are increasing their reliance on imported fruit, particularly apples and pears .

While fruit growers are suffering a slide in incomes, the UK's fruit "agents" - third party middlemen who buy the fruit to sell it on to retailers – are seeing their margins rise due to consolidation and supermarkets' preference for sourcing their supplies from just a single company .

The findings are included in the commission's most recent working paper in its ongoing investigation into the grocery sector. The ‘Primary Production and the Grocery Supply Chain’ paper reveals how the price of dessert apples, between 1996 and 2005, fell by 33 per cent, while the price of pears decreased by 21.5 per cent.

In addition, the producers of both apples and pears have seen their margins fall by 10 per cent compared to figures in 1996. At the same time the gross margins of intermediary companies have risen from 4 per cent in 1995 to 8 per cent in 2005.

Supermarkets account for more than 75 per cent of fruit sales in the UK, with twice as many varieties on offer compared with five years ago, the report stated.

The Competition Commission’s provisional findings are to be published next month.

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