This month, supermarket watchdog the Competition Commission released findings from its third inquiry into the role of supermarkets in the UK grocery industry.
The CC has constantly found evidence of unsavoury practices squeezing food suppliers; demands for upfront payments, changing the terms of contracts, and asking producers to bear the cost of promotions (the enticing “two for ones” that brighten up your weekly shop). One of the remedies therefore proposed is an ombudsman to investigate complaints.
Will this bring about a better, more sustainable deal for producers, thereby expanding room for to lessen the environmental, social and cultural costs of supermarket practices? The Observer’s Paul Levy suggests not, as the regulator will have no power to specify fines. It will name and shame without forcing the big firms (Tesco, Asda, Sainsbury’s and Morrisons, which account for more than three-quarters of the grocery market) to reform.
There is only so far regulators and consumer advocacy groups can go in improving food industry practices and mediating the relationship between sheer market power and small producers. As BBC Business Editor Robert Peston discusses, stronger political will to regulate big business is needed.
If supermarkets are able to successfully dangle the carrot of lower prices before consumers on low incomes, they can then use the stick to bully producers. This perennial problem is one we discuss in Pocket Issue: Food. Finding healthy and ethical alternatives – outside their brightly-lit aisles, is not impossible. But the big chains’ dominance of the UK grocery industry, in limiting choice and competition, makes it a lot harder for those on low incomes to do so conveniently and cheaply.