Farm Business May 2009

In February I agreed a competitive price promotion with the Coop to run starting this week.  To my horror because of the shortage of British pigs, pork prices have been rising relentlessly and as we approached promotion D-Day they had risen 12%.

Any increase is a nightmare for small suppliers let alone one on this scale added to that the dread of having to plead with a buyer for a price increase.  In this credit crunch climate where supermarkets are at war with each other on price, asking for an increase is likely to meet with the kind of wrath that Oliver Twist received when he dared ask the governors for more.

Like Oliver I am spurred on by an overriding need to save my business, and my only course of action was to renegotiate the deal I had made earlier in the year with a new deal that would still mean they would be able to keep their margin.  Rather than being greeted with some understanding and flexibility my approach was met with anger and a warning that I would have to pay a penalty.  I was somewhat surprised to be treated like this by the Coop because their heritage demonstrates a rather better understanding of the plight of the producer or supplier. Hopefully this is a rogue incident.  My concern is this; if this ruthless approach has also permeated the likes of the Coop this could ring the death knell for those of us in the rest of the food chain.

Over the last year this country has been going through a revolution.  Greedy bankers have been pilloried for showing disregard to the public by bankrupting the banks and MPs have been discovered taking our money to feather their own nests.  There is massive public anger, especially since many people are losing their jobs and homes.  At the moment supermarkets are under the radar but unless they get their houses in order it won’t be long before the public turns on them.

It is unsustainable in this new political climate for companies to be making such vast profits often at the expense of smaller players.  I believe that in future the public will be demanding a new approach.  Supermarkets are going to have to display their ethical credentials showing that it is possible to make profit and not put the rest of the food chain on the rack.

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~ by theblackfarmer on January 20, 2010.

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