Supermarkets 'are too powerful'

80% of food suppliers believe supermarkets have too much power

The majority of UK food suppliers believe supermarkets wield too much power, according to a survey.

The report by Grant Thornton says 25% of suppliers have had an order greatly reduced or cancelled by supermarkets at short notice, without compensation.

Around 80% expect more supply firms to go bust, with over half of those blaming the supermarkets.

But the British Retail Consortium says competition and rising costs are also causing hardship among suppliers.

The survey from the accountancy firm reveals 80% of food suppliers say supermarkets are too powerful.

'Unreasonable practices'

It suggests two-thirds of suppliers do not have formal contract terms with supermarkets, which can result in last-minute changes and complications.

A fifth of all suppliers also said supermarkets have extended the time they take to pay up, while almost 80% of suppliers said they had been put under pressure to lower prices.

Grant Thornton says while supermarkets in most cases behave as any reputable business would, unreasonable practices do occur, putting a financial strain on suppliers.

Defending the supermarkets, the British Retail Consortium says the report mentions other factors causing hardship to suppliers.

And it also points to the current Competition Commission investigation into supermarkets, which it says has so far found no evidence of market abuse.