Kevin Hawkins Director general, British Retail Consortium Sir; Is the lack of certainty among grocery suppliers holding back investment and innovation in the food industry? Duncan Swift's letter argues that while it isn't doing so right now, it may do in the future ('Give greater certainty to suppliers', The Grocer, 1 September, p24). I consulted the recent Grant Thornton survey but the evidence isn't there. Indeed, the results were so disappointing for Grant Thornton that it had to interpret them creatively. For example, some 84% of its sample were either certain or mostly confident that their business with their supermarket customers would remain the same over the next six months, while 75% said they had never in the past 12 months had an order cancelled or reduced within 72 hours of delivery. Elsewhere, only 22% of the sample felt downbeat about the market compared with a year ago. The rest were either upbeat (44%) or felt the same (32%). For a more authoritative view, readers should refer to the Competition Commission and the Office of Fair Trading. The commission has, to date, found no evidence of low or decreasing levels of investment or innovation among grocery suppliers. Indeed, there was some evidence to suggest that "the strong bargaining position of grocery retailers may have increased incentives to invest". Nor has the commission found any evidence of declining supplier profitability. Turning to the Supermarkets Code of Practice, Grant Thornton seems to believe it is part of the OFT's role to ensure fair trading for suppliers. It isn't. The OFT's job is to make markets work well for consumers, not suppliers, and in its own words "the code is not meant to shield suppliers from hard bargains driven by supermarkets" as long as consumers benefit. So, if 78% of Grant Thornton's sample had been put under pressure to cut their prices and this has been passed through to consumers, the market is working as it should. And, as the Grant Thornton survey is obliged to admit, suppliers' satisfaction with their retail customers is overwhelming - more than half of the suppliers to the top seven supermarkets rated their relationship as "excellent" or "good".
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