With the rising global demand for meat from Asian countries, large processors supplying the supermarkets are under pressure. Processor Vion, featured here, is facing direct competition from Morrisons and so changes its practice in order to buy at lower prices from producers.
The Graig Producers‘ case brought this comment from Tim Lang, Professor of Food Policy, City University London:
“This case highlights two continuing tensions in the UK food system to which Governments – shame on them – turn a blind eye.
First, the ruthless power relations driven down from retailers via processors to farmers.
Then, when farmers get better organised, with coops, look what happens!
Several hundred farmers across England and Wales formed a collaborative marketing group, Graig Producers.
It worked well until Vion Foods, a Dutch-owned meat company and UK supermarket supplier, decided to start paying all livestock farmers directly, rather than through any marketing groups which farmers had chosen as their route to the market, thereby gaining greater control of the supply by dealing with individuals. The web post continues:
“Vion have stated that they will only pay farmers directly, and that to be paid for their livestock, farmers must complete a very detailed, and in our view intrusive 4-page contract. This includes such questions as ‘Please list any public offices or elected positions you hold within your community’.“
It is feared that Vion will buy most of their supply from large farms to which they would offer preferential trading terms. Smaller traditional family farms would have to find their market through inferior contracts or live markets. If this continues, the exodus from dairy farming will continue – the number of dairy farmers has more than halved over the past 10 years – leading to the construction of large dairy factory units and/or increased imports.
Contracts not worthy of that name persist as British politicians wilt under corporate pressure
A list collated by the NFU gives examples of ‘the sort of bad behaviour retailers have indulged in over recent years’, including:
- Buyers requiring a fee from potential suppliers so they could be considered as suppliers
- Suppliers asked to pay to have a product displayed on the shelves
- Forced contributions from suppliers to run promotions
- Unilateral and retrospective changes to contractual conditions, mostly prices.
- Unilateral breach of contract by the buyer.
- Exclusivity clauses/ requiring a fee from suppliers in order to be their exclusive customer
- Imposing payment for waste processing removal, for example of perishable products past their best-before date.
The fourth – in plain English – includes the buyers’ reduction of the milk price without notice and sometimes even backdated.
After listing well-respected supporters, Graig Producers say: “If you believe this is unethical behaviour by Vion which should be reversed, please sign our petition”.