Fresh Produce Discussion Blog

Created by The Packer's National Editor Tom Karst

Monday, August 27, 2007

The UK's Wal-Mart

Tesco's is coming to the U.S. with a reputation as a innovative and effective international retailer. As it prepares to launch U.S. Fresh & Easy stores in Western states, it is taking some abuse in the U.K. What did Jesus say.... "A profit is not without honor except in his own country."

From the UK Telegraph:

Manningtree to fight Tesco superstore plan : There have been widespread fears that Tesco's dominance of the market is creating 'ghost towns' because small High Street shops are being forced out of business.
The Competition Commission is looking at the effect of the big retailers on local competition in its latest inquiry which was extended recently after emails were discovered from Asda and Tesco allegedly instructing suppliers to lower their prices.
A survey of 50 senior directors of supermarket suppliers published last week found that three quarters do not believe their firms are protected by Office of Fair Trading rules. More than half said they feared making complaints against supermarkets because they might lose their contracts.


Call for supermarkets watchdog
A watchdog with legal powers to stop the exploitation of farmers and other small suppliers by the UK's biggest supermarkets should be created as soon as possible, a high-profile group of MPs, pressure groups and think tanks said this weekend.
A group of 16 wide-ranging organisations, including the Campaign to Protect Rural England and the New Economics Foundation, is calling for the creation of an independent ombudsman along the lines of Ofcom, the TV and radio regulator, to keep the power of the UK's Big Four supermarkets - Tesco, Asda, J Sainsbury and Wm Morrison - in check.
Calls for the establishment of a supermarket watchdog, already being dubbed Ofshop by some insiders, come as supermarkets face renewed scrutiny over their treatment of food producers, manufacturers and farmers. Earlier this month the Competition Commission, the government's competition regulator that is 15 months into a massive investigation of the £95bn supermarket sector, ordered Tesco and Asda to hand over millions of emails from earlier this summer after evidence of alleged threatening behaviour came to light.


'Suppliers suffer from supermarket price cuts'
In the Eighties a joke used to do the rounds of food manufacturers: "What is the difference between a member of J Sainsbury's buying team and a terrorist?" Answer: "You can negotiate with a terrorist."
This gallows humour was intended as a lighthearted dig at the power of Sainsbury's, which was then the UK's biggest supermarket group, by its suppliers. But 20 years on, the debate over supermarkets' dominance rages as wildly as ever.
We buy three-quarters of our food from the so-called "Big Four" supermarkets - Tesco, Asda, Sainsbury's and Morrisons. As a result of this massive share, the government competition watchdog has embarked on its third major inquiry into the £95 billion sector in seven years. A major issue for the Competition Commission's inquiry, which began in May, is supermarkets' behaviour towards the food producers and farmers from whom they buy their goods.
Last week The Sunday Telegraph reported a dramatic twist in the inquiry. The commission, which is due to publish its initial findings on supermarket power next month, has unearthed a number of emails that it suspects point to threatening behaviour by two of these retailers, Tesco and Asda, towards their suppliers.

t t
TK: I've heard the terrorist joke before in a different context, but it works. Another funny line comes from the last line of the "watchdog" story:" All supermarkets deny that they exploit their suppliers." The better decision would have been to say, "no comment." The relationship between suppliers and retailers is what it is. The supermarket wields the power in almost every instance.

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