Suppliers fear supermarket power

Supermarkets have too much power over the firms which supply them with food, a survey out in the UK suggests.

A poll of 50 senior directors of UK supermarket suppliers found three quarters do not believe their firms are protected by Office of Fair Trading (OFT) rules.

More than half (52%) said they feared making complaints against supermarkets because they might lose their contracts.

They believed the OFT’s supermarket code of practice was not enforceable for that reason.

Duncan Swift of business advisory firm Grant Thornton, which carried out the research, said many food firms complained they were badly treated by supermarkets.

He said: “If they complain the likelihood is that they will lose the business through de-listing. There is no real protection.”

Adding: “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 a fifth of the respondents wanted new rules brought in to make supermarkets confirm the key terms of trade agreements in writing.

The Competition Commission is currently investigating allegations of unfair practices within the UK’s grocery market.

Grant Thornton’s poll of 50 UK food supply firms was carried out earlier this year.