Farming
Farmers and SMEs concerned by supermarket merger
THE TENANT FARMERS ASSOCIATION (TFA) is calling for the Government to rethink its refusal to extend the remit of the Groceries Code Adjudicator (GCA) in light of the proposed merger between Asda and Sainsbury’s.
The planned merger, which will probably be referred to the Competition and Mergers Authority, would create the UK’s largest supermarket chain. However, a merged company would still not be as big as Tesco was only a couple of years ago, when that company had over 30% of the UK’s supermarket retail share.
The combined strength of the merged business poses a threat to suppliers, who could find their margins squeezed as the company would be able to depress prices paid to primary producers by manufacturers. That prospect was well flagged up during a BBC News interview with Sainsbury’s CEO Mike Coupe.
Mr Coupe told the BBC that there will be no store closures and no in-store staff redundancies, the inference that can be drawn is that jobs will go both in administration and back office operations, as well as logistics. The most likely way to deliver savings would be to increase the company’s margin or arrangements with producers and suppliers. Mr Coupe told the BBC that the merged company would have the potential to reduce prices through supply chain efficiencies.
Unfair practices within the retail supply chain led the Government to establish the GCA in 2013 to oversee direct supply contracts between retailers and suppliers. However it recently refused to extend the remit to include oversight of relationships further upstream between farmers and processors which could be impacted by the dominance of retailers.
TFA Chief Executive, George Dunn said “The merger between Asda and Sainsbury’s announced this week should cause the Government to rethink its strategy here. When Sainsbury’s boss Mike Coupe pledged to cut prices on everyday products by 10%, alarm bells rang out across the industry. It is suppliers who will be expected to shoulder the cost of these savings.
“There is a growing recognition that the food supply chain in the UK is dysfunctional and all too often it is the farming community which bears the brunt of the problems that this produces. Poor returns, last-minute changes in orders and specifications, unfair competition from abroad and poor labelling are all contributing to the pressures at farm level,” said Mr Dunn.
“Given that the vast majority of farm produce passes through at least one processor, if not more, before it hits supermarket shelves, the Adjudicator is therefore unable to consider the impact of retailer activity on many farmers,” said Mr Dunn.
Speaking in the House of Commons on Monday (Apr 30), Business Minister, Andrew Griffiths MP, referred to the work of the Groceries Code Adjudicator, but failed to address why the Government had decided to do nothing to protect primary suppliers. This was despite being challenged by Labour’s Shadow Agriculture Minister, David Drew MP on how the Government planned to tackle further potential supply chain abuse between farmers, processors and retailers.
“The TFA agrees that the GCA has had a positive impact on the groceries market by ensuring that there is a greater focus on the principles of fair trading. Retailers are now more aware of the need to ensure that they are not using their dominant position within the supply chain to engage in inappropriate practices. However the extent of the influence of the GCA is limited by its current legislative powers both in terms of the scope of its remit and its ways of working. The Government needs to act now to ensure that appropriate mechanisms are in place to guard against future abuse in the light of further concentration in the retail sector,” said Mr Dunn.
“Well-meaning initiatives aimed at improving supply chain relationships on a voluntary basis have failed to have the necessary traction across the board. We must deepen and broaden the GCA’s powers to allow it to look at the whole of the supply chain and not just direct supply contracts to ensure fairness in supply chains.”
Federation of Small Businesses (FSB) National Chairman Mike Cherry, said: “A merger of this size will concentrate a lot of power in the hands of one giant company, and it’s important that power isn’t misused to coerce small suppliers into accepting unfair contracts and poor payment terms.
“Those at the top of Sainsbury’s and Asda should explain how they plan to merge these two supply chains fairly, and give reassurance that cost savings won’t be achieved simply by milking their small suppliers for all they’re worth.
“When investigating this proposed merger, the Competition and Markets Authority should be looking for cast-iron commitments that a positive standard will be set for working with smaller suppliers.”
FUW President Glyn Roberts said: “The proposed merger will raise many concerns for farmers given the huge power a new mega company could exert over the supply chain.
“If the government were to allow such a merger, we would need to see a step change in regulation of the supply chain and the powers of the Groceries Code Adjudicator, otherwise there is a risk of severe abuses taking place which further undermine farmers and suppliers.”
NFU Cymru President John Davies said: “NFU Cymru and the NFU will be examining the details of this proposed merger between Sainsbury’s and Asda carefully and the further concentration of retail power it creates within the food supply chain. We will also seek clarity on what the structure of any merger will be.
“We will be requesting a meeting with Sainsbury’s and Asda to ensure that the commitment of the new business to British sourcing will not be affected. First and foremost the NFU Cymru and the NFU will be seeking to understand what potential impact a merger would have on our members – both those farmers who are directly part of these supply chains and those who could be affected by wider connotations.
“With just over 31% of the market potentially being held by one company the Competition and Markets Authority (CMA) is likely to consider the impact on shoppers – but that must also take account of changes to supply arrangements that could give rise to a reduction in choice and availability over the long term. The impact of the whole supply chain, all the way down to farm level, needs to be carefully assessed.
“NFU Cymru and NFU support any investigation by the CMA and we would aim to feed into this if approached.”
Welsh Liberal Democrat Spokesperson for Agriculture Cllr William Powell said: “Welsh farmers will be justifiably concerned this merger will produce a supermarket that is simply too powerful, leaving suppliers at its mercy.
“Farmers already work with tight profit margins and face the multiple challenges of Brexit, including diminishing farm support and obstacles to accessing the vital EU Single Market. This merger must not be allowed to threaten them further.”
WALES will no longer see the golden eagle fly through the skies after the last of its kind was found dead by a walker in Abergwesyn Valley, near Llanwrtyd Wells.
The Golden Eagle was native to Wales, Europe and North America and due to human persecution had begun to die out, the last breeding pair being found in Snowdonia in 1850. It is one of the best known birds of prey in the Northern Hemisphere, but unfortunately Wales will not see the bird in action for a very long time.
The female bird of prey was being watched and followed by the presenter of Spring Watch, Iolo Williams, and will appear in the last episode of the latest show ‘Iolo: The Last Wilderness of Wales.’
The company behind the television show which captures the highlights of Welsh wildlife, Aden Productions, commented on the extinction of the Golden Eagle. Taking to twitter, a statement read:
“Our whole crew was shocked and saddened to hear about the demise of our beloved Cambrians golden eagle, the last golden eagle to fly wild in Wales. We hope our final episode of Iolo: The Last Wilderness of Wales is a fitting tribute to her.”
It is still not known how the female bird died, leaving questions for bird lovers, but plans are being made by the Eagle Reintroduction Wales project to reintroduce the bird of prey back into Welsh wildlife is under way. However, it is explained that this is not a simple process. They will firstly need Natural Resource Wales to issue a license which does take time.
The Golden Eagle has not left the UK completely and can still be found in the far North of Scotland.
JIM EGAN has sent out a rallying cry for people to pick up their binoculars and go bird-spotting for the Big Farmland Bird Count (BFBC) which returns on Friday, February 8.
The passionate organiser of the count, organised by the Game & Wildlife Conservation Trust (GWCT), is urging farmers, land managers, gamekeepers and all wildlife enthusiasts to spend 30 minutes recording what species they see on their patch of land from February 8th to the 17th.
Your support will help identify the farmland birds that are flourishing due to good conservation methods and ones in need of most support.
“It would be fantastic to see even more farmers to take part in the count this year,” said Jim.
“Counting birds on farms is a great way to recognise what species are there as well as being an opportunity to take time out and see the benefits of work such as wild seed mix and supplementary feeding.
“Taking part and submitting results enables us at GWCT to shout about the important conservation work many farmers are doing.
“We want landowners to be proud of their efforts. We will make sure that the public and policymakers hear about what can be achieved on Britain’s farms. The BFBC is a very positive way to showcase what can be achieved.”
Backing this vital citizen-science project, running for the sixth successive year, is the NFU, which is this year’s sponsor.
President Minette Batters is vowing her support to the count by going bird-watching on her farm in Downton, Wiltshire.
She will be joined on day one with GWCT biodiversity advisor Pete Thompson, an advocate of the count, both of whom will be ready with their binoculars, notepads and sharpened pencils, recording what they see.
“I am delighted to be taking part in this year’s GWCT Big Farmland Bird Count which the NFU is pleased to be sponsoring for the very first time,” she said.
“It’s becoming an important national event where thousands of farmers and growers around the country are able to take stock of and importantly, take pride in what they find on their land.
“The NFU supports initiatives like the Big Farmland Bird Count as without sound management of the environment, enhancement of habitats, protection of wildlife and support for pollinators and soils, we do not have farming businesses.
“So, I would encourage all farmers to take part, and also remember to submit your records to the GWCT, so we can pull together a vital national snapshot of the state of the nation when it comes to farmland birds.”
A record-breaking 1,000 people took part in last year’s count, recording 121 species across 950,000 acres.
A total of 25 red-listed species were recorded, with five appearing in the 25 most commonly seen species list. These include fieldfares, starlings, house sparrows, song thrushes and yellowhammers. The most plentiful of these were fieldfares and starlings, which were seen on nearly 40% of the farms taking part.
At the end of the count, the results will be analysed by the Trust. All participants will receive a report on the national results once they have been collated.
HYBU Cig Cymru – Meat Promotion Wales (HCC) has appointed two new Flock and Herd Health Officers to its ambitious five-year Red Meat Development Programme, designed to equip Wales’s lamb and beef industry for a changing future.
The posts are key to delivering the programme’s commitment to helping farmers achieve on-farm efficiency and drive best practice in proactive animal health planning.
The programme is supported by the Welsh Government Rural Communities – Rural Development Programme 2014 – 2020, which is funded by the European Agricultural Fund for Rural Development and the Welsh Government.
Lowri Reed hails from a farming background near Llanon in central Ceredigion, whereas Lowri Williams is from Llanfihangel y Creuddyn near Aberystwyth, and is a graduate in Animal Management and Welfare from Harper Adams University.
Dr Rebekah Stuart, the coordinator of the Flock and Herd Health Project at HCC, said: “We’re delighted to have recruited two officers with experience and knowledge of agriculture and flock management to this important strand of work.
“There are few things that can have as great an impact on the efficiency and bottom line of a livestock enterprise as a proactive and coordinated approach to animal health and eradicating disease.
“The project will help farmers to work with vets to put health plans in place and monitor their effectiveness. Since opening an initial expression of interest window late last year at the Winter Fair, we’re encouraged by how many farmers are keen to be involved. We look forward to working with them to put this exciting project into action.”
