EFRA Committee stand up for producers and processors in ASDA/Sainsburys deal
Recently the Environment Food and Rural Affairs (EFRA) Committee has been questioning the Sainsbury’s and ASDA chiefs on their proposed merger. And, Chairman Neil Parish MP has demonstrated a fierce commitment to extracting answers to some hard questions that will be close to the British meat industry’s heart.
From the beginning of the first session, Mr Parish launched a robust interrogation into exactly how the supermarkets would achieve the promised 10% savings to customers, asserting to ASDA CEO Roger Burnley that savings will be achieved “at the expense of those that supply you” adding “when you buy cheaper, it’ll be the producers, the processors: everybody will pay the price”
Mr Burnley stressed that their plan was not to reduce the price they pay suppliers across both businesses but rather to buy Sainsbury’s products at ASDA prices to achieve an overall saving. Mr Burnley also pointed out that dealing with just one set of packaging and product specifications rather than two would offer cost savings to suppliers.
Mr Parish launched a robust interrogation into exactly how the supermarkets would achieve the promised 10% savings to customers
However the Committee dismissed this, saying that those savings would not balance the losses from having to trim prices. Mr Parish also challenged the ASDA chief to explain why they could not improve efficiencies in order to become more competitive (much like Aldi has done) rather than pressuring farmers and suppliers to become more competitive.
Nick Allen, CEO of the British Meat Processors Association, has been meeting with Neil Parish and DEFRA officials over the last several months to raise concerns and offer industry intelligence on the position of the British meat industry. Through these meetings, BMPA has been able to offer an insight into the challenges we’re facing as an industry both as a result of this merger activity but also surrounding the effects of Brexit.
We’ll watch with interest as the inquiry progresses and will continue our constructive dialogue with all parties from Government, the meat and livestock industry and the retail sector to push for outcomes that work for everybody.