Supermarket suppliers feel pressure of the price wars

It has been reported that there has been a major rise in the amount of supermarket food suppliers in financial distress, despite the fact there have already been highlighting reports indicating that suppliers are struggling under pressure from big shops.
Begbie’s Traynor’s Red Flag Alert research looked into the economic state of suppliers to the country’s main superstores, and found that many more are struggling.
The number of food suppliers in financial difficulty has almost doubled and the price war has been blamed.
There has been huge pressure on dairy farmers to lowers costs, with a lot hitting significant financial difficulty, and now other fresh food producers seem to be following suit.
As the big stores of the country, especially Tesco, Morrisons, Asda and Sainsbury’s have fought with each other to bring prices down, the effects have been felt by those who the stores buy food from.
Year on year, there has been an increase of 1,414 food and drink manufacturers that are now in significant distress.
Regional managing partner of Begbies Traynor, Julie Palmer, said “With £1 deals for fresh produce goods such as bread and milk remaining a firm feature at the major supermarkets, it’s no wonder that suppliers lower down the food chain are struggling to achieve a fair price for their produce.
“Meanwhile, wastage on farms continues to be a problem as suppliers are increasingly struck by last-minute order cancellations and overzealous cosmetic specifications set by the large supermarkets when it comes to the look of food that it will accept from farmers.”