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Letter of 28 March 2006 sent to Groceries Market Inquiry 3rd Party Submissions from NGOs and Charitable Organisations

John Fingleton
Chief Executive
Office of Fair Trading
Fleetbank House
2-6 Salisbury Square
London EC4Y 8JX

28 March 2006

Dear Mr Fingleton,

Grocery retailers market investigation and overseas suppliers

The undersigned group of 12 development agencies are writing to express our support for the Office of Fair Trading’s proposal to refer the market for the supply of groceries by UK retailers to the Competition Commission for a market investigation.

However, we are concerned that the OFT’s report does not recommend that the Competition Commission investigates the impact of supermarket buyer power on suppliers, in particular those based overseas. We would like to hear why there has been this omission.

The Supermarket Code of Practice in principle covers the supermarkets’ dealings with suppliers based outside the UK. Evidence given in submissions by ActionAid, Banana Link, Oxfam and Traidcraft to the OFT in March 2005 show UK grocery retailers continue to engage in irresponsible buying practices with overseas suppliers, which include violations of the Supermarket Code. The purchasing practices documented in these submissions include:

The detrimental impacts of such buying practices on farmers, farm workers and suppliers in developing countries, as well as on levels of poverty more generally, are well documented. They include lower pay, longer hours, poor health and safety conditions and increased use of temporary contracts for workers, as well as increased vulnerability and barriers to entry for small producers.

In light of this evidence, we urge you to ensure that any potential market investigation will examine in detail the impact of UK retailers’ buyer power on suppliers, including farmers, farm workers and other producers in developing countries.

Yours sincerely,

Steve Tibbett, Director of Policy and Campaigns, ActionAid
Alistair Smith, Director, Banana Link
George Gelber, Head of Public Policy, CAFOD
Charles Abugre, Head of Policy, Christian Aid
Bill Vorley, Head, Sustainable Markets Group, International Institute for Environment and Development
Maggie Burns, Chair, Labour Behind the Label
Phil Bloomer, Director of Campaigns and Policy, Oxfam
James Lloyd, Head of Campaigns, People and Planet
Paul Chitnis, Chief Executive, SCIAF
Michael Gidney, Director of Policy, Traidcraft Exchange

John Hilary, Director of Campaigns and Policy, War on Want
Camille Warren, Acting Director, Women Working Worldwide