Milk prices slashed by big 3

Think your milk is too expensive?

Farmers now make a 4p loss for every litre of milk they produce.

You may not be aware, but the big three milk processors (Arla, Robert Wiseman and Dairy Crest) have announced to farmers that they are cutting the price they will pay for each litre of milk by 2p per litre - with a week's notice. This takes the price a farmer receives per litre to -3.7p. That's right - a farmer LOSES 4p for every litre of milk they produce in this country. It's outrageous.

Article at  Farmer's Weekly

A year without supermarkets

For lent 2011 I gave up supermarkets.

I hadn't intended to at first, but two weeks in I realised that tea, meat, cheese, beer and chocolate had all been consumed (all previous lenten targets), but I hadn't been to a supermarket.

"Why not?" I thought.

So 5 weeks later, eating my Easter egg, I realised I had fed myself only from our local food co-operative and The Co-operative (the similarity in names still causes confusion). A couple of things dawned on me:

1. I was not spending any more money - if anything I was spending less, as I was not impulse-spending on stuff I didn't need

2. I was eating more healthily. Instead of stocking up on filled pasta and frozen pizzas (staple for the single 'professional') I was making curries, tagines and tartes. I was eating more veg.

3. I must have halved my carbon footprint. Processed foods like those I bought previously contained ingredients which came from I-don't-know-where, worrying in itself. I now knew where all my food came from - and my veg came from just up the road.

4. I did not miss supermarkets. Go to our local food cooperative and you can sit on a sofa and have a cuppa whilst leafing through a magazine, with music playing in the background, then do your shopping at a leisurely pace. Go to our local supermarket and there are JML adverts playing loudly on screens, harsh lighting, and mums screaming at their kids, then "guess the price of the trolleyload" at the end. No contest.

I mostly kept this up, but when Jon and I got married we vowed to ditch supermarkets for good.

So far the only products we have not been able to obtain have been custard powder (recently remedied, MUCH to my relief) and vegan margarine - a problem only as we have some vegan friends who I would like to be able to provide for.

We now only use The Co-operative to buy cheese, butter and satsumas - not perfect, but much better. We have our milk (organic, of course) delivered by the milkman - the height of luxury, and in my eyes an important service to support for housebound people like my grandad. Not to mention no mountain of plastic milk bottles to recycle - and a job for our milkman.

We feed two people a pretty much entirely organic diet for £30 a week - plus an occasional trip to the farm shop for some meat. If something's out of season, we don't get to eat it. If we can't afford something within our £30 budget, we go without - with some tasty alternatives created in the kitchen.

I will openly admit that I am not a fan of supermarkets, and the ease with which Jon and I cope without them makes me realise how superficial our reliance on them is. If I need to use them in future I will, but I'd much rather get our groceries from somewhere where the owner knows our names, and the money supports local business.

Fact File: The Supermarket Ombudsman

A number of agencies are currently embroiled in the formation of this agency, in proceedings that have so far taken over a decade. What's the big deal?

What is a supermarket ombudsman?

Ombudsman (noun): government official who hears and investigates complaints by private citizens against other officials or government agencies.

A supermarket ombudsman (SO) in the UK would enforce the new Groceries Supply Code of Practice (GSCOP), protecting the rights of farmers and other grocery suppliers. In 2010 the GSCOP replaced the former Supermarket Code of Practice (SCOP).

Officially it will:

• act as an arbitrator between retailers and suppliers in relation to disputes arising under the GSCOP;
• receive complaints in relation to a breach of the GSCOP, and where appropriate to conduct investigations;
• publish guidance on specific provisions of the GSCOP when necessary;
• make recommendations to retailers on how to improve compliance with the GSCOP and to monitor progress on the implementation of such recommendations; and
• advise and report to the OFT on the operation of the GSCOP.

 From Competition Commission News release August 2009, available here

In short, it will enforce fair trading regulations on retailers, and allow producers to register complaints against these retailers without the risk of incurring retribution.

Who would it affect?

Food retailers with a turnover of more than £1 billion. This includes the ‘big four’: Tesco, Sainsbury’s, Asda and Morrison’s, but also The Co-operative (including Alldays and Somerfield), Marks and Spencer, Waitrose, Iceland, Lidl and Aldi.

Who is in favour of this?

Supermarkets that have signed up are (to date): Marks and Spencer, Waitrose and Aldi.

Other supporters include NGOs, academics and farming organisations: National Farmers Union (NFU) of England and Wales, NFU Scotland, British Independent Fruit Growers Association, Association of Convenience Stores, Campaign to Protect Rural England, Association of Master Bakers, Rural Shops Alliance, Country Land and Business Association, British Brands Group, Friends of the Earth, Action Aid, Traidcraft, Banana Link, War on Want and Breaking the Armlock Alliance. 

Why do we need one?

In 2006 the Office of Fair Trading (OFT) referred the supply of groceries by retailers in the UK to the Competition Commission (CC) for investigation (section 131 of the Enterprise Act 2002 states that it may do this if it has "reasonable grounds for suspecting that any feature, or combination of features, of a market in the United Kingdom for goods or services prevents, restricts or distorts competition in connection with the supply or acquisition of any goods or services"). 

In other words, the OFT thought all was not well in the groceries industry, and it needed to be looked into.

The CC's report found two main concerns:

1. "several grocery retailers have strong positions in a number of local markets". i.e. it is very hard for smaller, local retailers to get a foothold in the market, resulting in the consumer having a lessening in choice, product quality and value for money.
2. "the transfer of excessive risk and unexpected costs by grocery retailers to their suppliers". i.e. suppliers were expected to absorb costs for any variability in the market, reducing their ability to innovate and invest in future projects.

Other issues included:

• The large market share of Tesco (in 2008 they held almost 30% of the groceries market)
• The impact on the nation's health by the provision of cheap but poorly nutritional foodstuffs and alcohol
• Prospective purchasing of land by retailers to prevent its future use by other retailers
• Collusion between retailers
• The pressure placed on convenience stores by the presence of large out of town supermarkets

In all cases, the CC deemed that while these issues were of concern, they had no significant effect on cost or choice for the consumer.

What has been done so far?

The NFU website has an excellent timeline charting progress from 1999-2010. Other updates can be found at another of my favourite websites here.

Since the release of the CC's report in 2008 three supermarkets have signed up (as above). In January 2010 the government announced its intention for form a supermarket ombudsman.

~~~~~

Since then, if I can take off my 'hat of objectivity', the government has been faffing. In October 2011 the government chose to ignore recommendations from two panels of MPs after submitting to the disbelief of the NFU. Since then there has been little in the news.

Obviously it is not in the interest of supermarkets to undergo stricter regulations, in much the same way the banks do not wish to be further regulated; it would force them to stop making some dodgy transactions.  If I can be especially cynical, I do not think it would be in the interests of the government for this bill to go through, as I suspect there are some important connections that may be put under pressure.

I for one will be campaigning on this - I think it's only fair that farmers in this country are paid a fair price for their produce. More to follow, no doubt