Belfast Telegraph

Monday 29 December 2014

Supermarkets 'put a cash strain on local suppliers'

A huge financial strain is being put on certain food suppliers in Northern Ireland by what is said to be the "unreasonable behaviour of some supermarkets", according to a new survey.

Charlie Kerlin, head of Grant Thornton's NI Food Group, which carried out the research, said most supermarkets operate reputably.

"However, the results of the survey and, indeed, our direct experience of advising food suppliers, clearly show that examples of unreasonable behaviour do go on and are putting a huge financial strain on food suppliers, " he added.

"Significant proportions of suppliers complain of not having contracts in place, no notice periods, orders cancelled at the 11th hour and penny-pinching clients who, through their market power, constantly chip away at price and demand contributions and credits for unsold goods.

"Yet, there is little they can do about it.

"If they complain the likelihood is that they will lose the business through de-listing. There is no real protection."

The main finding of the survey was that more than half (52%) of the UK's food suppliers to supermarkets are unfamiliar with the provisions of the Office of Fair Trading's supermarket code of practice.

Among those that are, over three quarters (76%) do not believe it offers any protection from the increasing power of supermarkets and the financial effects this is having on suppliers.

More than half (52%) of the respondents believed that the voluntary Supermarket Code of Practice was of little benefit because it did not encourage suppliers to raise a formal complaint against supermarkets for fear of losing their supply contract.

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