Western Daily Press (Saturday)
Name reminds us of unpleasant episode
EVERY so often something unspeakable and unwelcome rises from the depths of history to remind us of a particularly unpleasant episode in our past.
This week it was Sir Terry Leahy, who has found himself embroiled in a Competition and Markets Authority investigation into what effect the acquisition of Morrisons by Clayton, Dubilier & Rice Holdings – parent company of Leahy’s Motor Fuel Group – is likely to have on fuel sales.
The official view being that the deal could lead to higher fuel prices in 121 locations across the country where both firms own forecourts.
I leave the official watchdog to progress its investigation and report back.
But the very name of Leahy at the present moment will send a chill through many farmers as they struggle to cope with stagnant, if not falling prices, and inexorably rising costs.
Because it was during his tenure as chief executive that Tesco acquired its stigma of putting its own profit margins first and the financial welfare of its suppliers – including farmers – a long way down the priority list. In fact so far as to be out of sight.
You may remember how Tesco was fingered for demanding sweeteners from its suppliers for favourable product placement while keeping them waiting for months to be paid.
The taint has never left the chain as a result of these sustained and cynical examples of bad, not to say sharp practice.
So I don’t hold out much hope for dairy processors or the NFU when they say dairy farmers need more money and shelf prices at Tesco and elsewhere must go up to provide it.
Milk is still being sold more cheaply than bottled water, making it the most undervalued of all food products (according to the latest Dairy UK report, it should be an essential element of the diet for the elderly).
But supermarkets are entirely happy for it to carry on being cheap, because cheap milk lures the punters in and what they don’t spend on milk they spend on more profitable lines.
What I do find totally ludicrous about the current situation, however, is that while having a leg on one soapbox demanding higher farmgate prices NFU president Minette Batters has one on another calling for input prices to be dropped so that farmers can cope with them.
Oh, what a happy world it would be if everyone could have their cake and eat it in that manner.
When is it going to dawn on Ms Batters that every commodity, every commercial transaction is affected by the same set of negative economic factors and that farmers cannot claim to be a special case.
Supermarkets’ costs are going up. Processors’ costs are going up. Distributors’ costs are going up.
Consumers’ general living costs are going up which is why the margin for raising supermarket prices still further to send more money back down the chain is almost nonexistent.
The latest word from the Bank of England is that we are facing an inflationary storm unlike anything we have seen since the 1970s and it’s likely to be two years before it abates.
My advice to Minette Batters? You and your members have no option but to sit tight and ride it out. Exactly like the rest of us.
Oh what a happy world it would be if everyone could have their cake and eat it in that manner