UK Supermarkets Accused Of Bullying Small Suppliers

Tue, 28 Aug 2007
 
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Supermarkets in the UK have been accused of exploiting farmers and other small suppliers by ignoring fair trading rules, according to a new survey .

A coalition of farmers, small businesses and environmentalists has been concerned with what they allege are bullying tactics employed by supermarkets when dealing with their suppliers, such as threatening to stop buying from suppliers who make complaints against them.

A poll of 50 senior directors of UK supermarket suppliers found 75 per cent did not have faith in the Office of Fair Trading (OFT) rules.

Over half (52 per cent) feared supermarkets would cancel their contracts if complaints were made, therefore making the OFT’s supermarket code of practice unenforceable.

Duncan Swift, member of business advisory firm Grant Thornton, which carried out the research earlier in the year, said many food firms complained that supermarkets treated them unfairly.

"If they complain the likelihood is that they will lose the business through de-listing. There is no real protection," Swift said.

"Unbridled supermarket power has caused some ugly results for food suppliers and better, more enforceable rules are needed to ensure fair trading and the long-term prospects for the sector."

More than one-fifth of the business leaders who took part in the survey said a written agreement over the key terms of trade should be forced upon supermarkets .

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