Call for urgent talks over impact of supermarket price war on growers

NFU Scotland is calling for urgent meetings with retailers following the start of a supermarket price war which threatens to damage farmgate prices - and ultimately the food supply.

NFU rallies growers over fear of renewed supermarket price wars - photo: HW
NFU rallies growers over fear of renewed supermarket price wars - photo: HW

Food producers, including growers, are facing rocketing input costs against a background of challenging and, in many cases, unsustainable farmgate prices.

Where there have been farmgate price rises, these have not kept pace with rises in production costs.

NFU Scotland President, Jim McLaren, said:

Within the last few weeks, the large retailers have begun to adopt aggressive marketing and price cutting strategies in order to keep their customers coming through the door. However, NFUS is extremely concerned that these strategies may have a damaging impact upon farmgate prices.

I welcome the commitment from Tesco that farmers will not bear the costs of their recent ‘Fresh n Lo’ milk pricing initiative. However, from the farming perspective, the history of initiatives like this has not been good, particularly where it sparks tit-for-tat moves by other retailers.

The rise in food prices in the UK is obviously part of a global phenomenon, driven by reduced supply and increased costs. However, in the absence of improved market returns for Scottish farmers, the danger is that supplies will tighten even further and that aggressive pricing strategies, whilst alleviating some price pressures on consumers in the short term, may exacerbate the problems over the longer term.

If continued aggressive price cuts by retailers spill over into price cuts at farm level, we may well find ourselves in a position, as a nation, where some farmers will cease production of some products altogether, and demand will not be met by local supplies.


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