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Last Updated: Monday, 5 November 2007, 18:12 GMT
Church seeks supermarket watchdog
Milk protester outside Downing Street
Dairy farmers protested in Downing Street earlier this year
Supermarkets are placing "considerable stress" on British farmers through "invisible and pernicious practices", a Church of England report has said.

The study by the Church's Ethical Investment Advisory Group (EIAG) suggests some farmers are being exploited for "unfair gain".

It says a "squeeze" on prices is forcing farmers out of business and calls for an independent ombudsman.

The British Retail Consortium says the industry is "healthy and competitive".

Speaking to the BBC, the chairman of the Church's rural strategy group said urgent action was needed.

The Bishop of Exeter, the Right Reverend Michael Langrish, said the British public was enjoying cheap food "at the expense of the livelihood and well-being of the farming community".

'Boycott fear'

Bishop Langrish said: "The business practices of the major food retailers have placed considerable stress on the farming community through the use of methods which we believe to be unfair and of which consumers seem to be unaware.

"Farmers seem to be unwilling to complain or to expose these practices for fear that their produce may be boycotted by the major retailers."

Are human beings treated with dignity and respect, or is there some exploitation of one group of people for the unfair gain of another?
The Bishop of Exeter, the Right Reverend Michael Langrish

Bishop Langrish did acknowledge that some supermarkets were moving in the "right direction".

"Everyone is agreed, supermarkets do a great job in many ways. They provide convenience, quality assurance, they provide a range of goods, they provide good value, some of their best practices are excellent," he said.

But the EIAG study says farmers are being made to pay for supermarkets' own special offers, such as "two-for-ones", but feel little financial benefit in return.

It says that as a major investor in the food industry and a landlord to many tenant farmers the Church has a duty to ask whether the relationship between supermarkets and farmers is fair.

"Are human beings treated with dignity and respect, or is there some exploitation of one group of people for the unfair gain of another?" Bishop Langrish asked.

We have got a healthy, competitive grocery market where customers come first and they have benefited from lower prices
Richard Dodd, British Retail Consortium

The EIAG said the dairy industry was of particular concern, with seven dairy farmers going out of production every week.

It wants to see each supermarket draw up a buyer's code to be overseen by an independent watchdog and argues the supermarkets' own code of conduct is not working.

Richard Dodd, a spokesman for the British Retail Consortium, which represents major food retailers, said: "We have got a healthy, competitive grocery market where customers come first and they have benefited from lower prices."

It was not in the supermarkets' interest to drive farmers out of business, he said.

He denied there was any price fixing between supermarkets and suppliers.

He did acknowledge bigger, more efficient producers were doing well while some smaller suppliers were struggling however.

Lucy Neville-Rolfe, from Tesco, said shopping for groceries was "better for consumers than it has ever been".

"All the benefits to consumers have come about because retailing in this country is intensely competitive and customers are quick to punish shops that disappoint them."

The Church report follows Competition Commission provisional findings that suggested the UK lacked competition in the supermarket sector.



SEE ALSO
'More supermarkets' watchdog call
30 Oct 07 |  Business
Supermarkets 'fixed dairy prices'
20 Sep 07 |  Business
Tesco to pay dairy farmers more
03 Apr 07 |  Business
Price squeeze 'hitting farmers'
26 Feb 07 |  Business

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