Clive Beddall & John Wood
All multiples, not only the top five, could be forced to adopt the legally binding trading code demanded by secretary of state for trade and industry Stephen Byers in his report on supermarket profitability.
That became clear on Thursday as many small suppliers called for "protective measures" to ensure they do not suffer at the hands of heavy handed multiple negotiators "across the entire retailing spectrum".
Byers wants to ensure that relations between supermarkets and their suppliers were "put on a clearer and more predictable basis."
He accepts the industry is "broadly competitive" and that excessive prices are not being charged nor excessive profits earned, but he has put the top five Asda, Safeway, Sainsbury, Somerfield and Tesco on a fast-track agenda to agree a code within three months.
However, many smaller suppliers are unhappy. The md of a Midlands bakery goods concern said on Thursday:"It's not just a case of protecting us against over-zealous buyers working for the big boys. I have been bullied by other, smaller chains into making additional cash contributions for promotions.But don't use my name I've got to make a living."
A source at one of the top five, who also refused to be named, said: "It's outtrageous to single us out. The Competition Commission report originally investigated 24 store groups. They should all be bound by a code. And while Byers is at it perhaps the code should include manufacturers dealing with the farmers."
However, within hours of the Commission's report being published officials from the DTI, MAFF and the IGD were arranging talks to discuss the earlier voluntary code suggested by minister of agriculture Nick Brown and agreed by Asda, Morrisons Safeway, Sainsbury, Somerfield and Tesco. The Grocer has seen a copy of the confidential document and, significantly, the six recommend the code should have wider application throughout the food and grocery chain and including foodservice.
Brown said on Thursday: "I'm pleased to see the Commission has recognised what we are trying to achieve with a code and will be building on our work." - See p16.
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