FINAL SAY Fen Tiger


Supermarket sweep


Farmers are likely to be the losers when big food retailers merge, says Fen Tiger


I


t looks like the phrase big is beautiful is really true after all. An increasing number of smaller family farms are


calling it a day – deciding their lifestyle way of life is really not that profi table after all. Many have simply had


enough. Larger roll-over farm- ers with windfall profi ts along- side investment buyers are tak- ing over. The large investment fi rms are slowly gaining a foot- hold and renting out land to the bigger farmers. And so the pro- cess gains momentum. Grain prices too are going up. And with farmers benefi ting from currency fl uctuations, it should be better news for the agricultur- al industry. But two issues have reared their ugly heads recent- ly – and they have dire implica- tions for the sector. The fi rst issue is the me- ga-merger of Sainsbury’s and Asda. It promises to create a pow- erful new force that will even out- rank Tesco as Britain’s biggest grocer. It will have immense buy- ing power – making it a nervous times for farmers who are super- market suppliers.


Stark choice A pledged 10% cut in food prices for shoppers will mean only one thing: these cuts will be passed


74 ANGLIA FARMER • JULY 2018


back to suppliers. Yet many farm- ers cannot reduce their produc- tion costs anymore. They face a stark choice: quit now or face be- ing driven out of business. What is almost equally con- cerning is that any impact this merger may have on small sup- pliers may not be fully considered as the competition authorities fo- cus on the effect it will have on


seek to maintain or increase prof- its but it will come at the suppli- ers’ expense.


The second issue of concern is the seeming inability of our lead- ers to negotiate a successful pas- sage out of the European Union. With brexit looming fast, it looks increasingly likely that the USA has its sights set on the UK as a market for its food exports.


“Brexit was a vote for independence from the very people we need to harvest our food.”


consumers rather than food pro- ducers. Farmers are already in a dif-


fi cult position with any merg- er. It unsettles market balance and while supermarkets may be able to streamline their business- es, farmers may not. As one local supplier recently told me, his belt is already on the last notch and cannot be tightened any more. As smaller players, farmers struggle to negotiate new pric- ing. This often makes any worth- while profi t diffi cult – and with- out a sustainable contract going forward, the viability and success of any business is uncertain. Any business needs consisten-


cy and a clear path forward. The merger of these two giants will


Britain’s small size and bar- gaining position mean farmers are vulnerable at best. America wants access to our market. And while this may result in cheaper prices for consumers, it is impor- tant to look at the cost involved. First, imported food may be


produced to lower health and environmental standards. De- spite pledges from our govern- ment that standards will be maintained, the USA has a real punch when it comes to demand- ing that regulations are relaxed.


Remain resilient


If imports of GM food are allowed in, farmers may well ask the ques- tions again why GM crops cannot be grown here. I do not believe


the public want lower standards but are they prepared to accept the possible threat of more hard earned pounds coming out of their pockets?


The best thing for farmers would be for the UK to increase domestic standards – and insist that food imports must match those standards before they are allowed in. That way prices will rise. Whatever the outcome, our farmers must remain resilient. I was reminded on a recent vis-


it to a large vegetable grower of the fi ne balance between success and failure. Despite suppling sev- eral large well known supermar- kets, margins were tight and prof- its were only possible due to the sheer large scale of production. Despite all the modern tech- nology – the monitoring of soil indices, temperature controlled stores and constant data – the success or failure of the business relied 100% on manual labour. Everything was hand picked, sprayed and hand-weeded. Everything relied on labour from outside Britain. It struck me as ironic that we voted for in- dependence from the very people who we need to harvest our food. Without them – and with tight margins in the face of cut-price imports, it will be a tough road ahead for producers.


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