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Supermarkets

Volume 456: debated on Thursday 1 February 2007

10. What assessment he has made of the potential implications for farmers of the latest report by the Competition Commission on the power of supermarkets; and if he will make a statement. (117820)

The commission has set out its emerging thinking on its inquiry into the groceries market, including an initial assessment of the impact of retailer buyer power on primary producers. No conclusions have been reached so far.

I am grateful to the Secretary of State for that response. Was he as disturbed as I was to read the letter that the commission sent to all Members of Parliament? It said that the commission recognised that some farmers are experiencing difficulties,

“but there are fewer of these than we had expected.”

Will the Secretary of State tell the commission that in fact, a lot of farmers, especially milk producers, are really struggling? Far be it from me to advocate a return to production subsidies—I certainly do not—but one problem is that, since the ending of that system, the supermarkets have got away with pressing down the price of milk at the farm gate, which has caused milk producers considerable hardship. Will the Secretary of State have a word with the commission about that?

I really am grateful to the hon. Gentleman for asking that question and I hope that through my answer I can make a point to all hon. Members, including Opposition Front Benchers. Many hon. Members are concerned about this issue. The purpose of the Competition Commission’s letter was to signal that it has had very few—only about six or seven—specific examples to investigate and consider. It is appealing—and I join in that appeal and I hope that we can spread it around the country—for farmers with experience to get in touch with it. The obvious riposte is whether there is any danger in being open about those experiences, but the Competition Commission has given absolute assurances to me and others that any request for confidentiality will be completely respected.

It is obvious that farmers may have inhibitions about engaging in this process, but I hope that hon. Members will join me in assuring them that we have had strong assurances from the Competition Commission. If it is to investigate the issue properly, it needs more than the six or seven cases that it has so far been given. If we can get the message out that substantive evidence needs to be given to the commission—

I wrote to my local branch of the National Farmers Union and spoke with it early in January. Single payments are being eroded in many cases because those farmers that are involved in milk production have seen all those losses being swallowed up. I appreciate that little evidence has been offered so far, but what more can the Government do to assist farmers in making their case about unfair competition?

I applaud my hon. Friend’s initiative in contacting the NFU and suggesting that it provides information. I have two points to make to him. First, he will know that under the agriculture development scheme DEFRA has spent £1.3 million on trying to spread good practice in the dairy sector to promote innovation and ensure that as many dairy farmers as possible were able to follow the example of the best in the sector, who are making a real go of it.

Secondly, I repeat the point that I made in answer to the original question: without substantive evidence, the Competition Commission cannot investigate the issue. That has to be the focus now if we are to obtain the benefits of the independent commission that we have at our service.

That is fine, but if the Secretary of State truly shares the concerns articulated by my hon. Friend the Member for Tewkesbury (Mr. Robertson), will he invite in the heads of the supermarkets and tell them of the Government’s acute concern on that front?

The hon. Member for Shrewsbury and Atcham (Daniel Kawczynski), who chairs the all-party parliamentary group on the dairy industry, knows that when I met him before Christmas I told him that I had already met the supermarkets and made these points to them. I have also met individual supermarkets, because it is important to point out—as the hon. Member for Tewkesbury (Mr. Robertson) said when he asked the original question—that we do not wish to give the impression that we want to go back to the days of the Milk Marketing Board, with the Government, still less me, trying to set the price of milk. It is important not to give that message. It is also important that we recognise that responsible practice by the supermarkets offers huge advantages for consumers and producers. The emphasis must be on “responsible” and it is important that we look at the issue in detail, because different supermarkets have different practices. We must ensure that effective practices are developed on all sides, including the producer side and the retail side.