Around 70 pig farmers and supporters of the industry gathered on a picket line outside Tesco’s annual general meeting in Nottingham on Friday (1 July). The protesting farmers, who accuse Tesco of grossly underpaying its UK suppliers of meat, despite having raised prices to customers, gathered as part of a campaign to secure “a fair price” for their products.  

The British Pig Industry Support Group, which organised Friday’s protest, revealed farmers lose around £10 for every pig they sell due to rising input costs and shrinking farm-gate prices. The group has called for an immediate 10p/kilo rise in the price paid to suppliers.

Industry-commissioned research conducted earlier this year showed that the largest supermarkets make £16 million a week average profit from their pork products, whereas pig farmers lose an average of £3 million a week. Furthermore, the industry support group said Tesco recently increased the price of a number of its pork lines, including loin steaks which rose by 33p per kilo, and leg joints which rose £1.01, from £6.98 a kilo to £7.99. The group emphatically stated that the profits made on these increases were not filtering down to producers.

Supermarkets blame processors

Supermarkets maintain that farmers and processors have to come to an agreement over price, as companies like Tesco only deal with processors, not directly with farmers. However, an investigation by The Guardian, the results of which were published on Sunday (3rd July), revealed that the supermarkets’ agreed processors and packagers tend to offer binding contracts that do not specify prices at the supermarkets' behest.

The investigation revealed how risk has been transferred down the supply chain, from the retailer to the producer, “These tend to lift the brakes on how much is ordered, because the shop will not suffer if produce is not sold. This is particularly painful for soft fruit and salad growers, whose entire year's income can be ruined by a couple of rainy summer weekends when people don't want to buy summer produce.”

A spokesperson for Tesco said the company has recently increased the price it pays for pork, but that the supermarket had a duty to “ensure a fair price not only for farmers, but for customers.” However, he admitted that he “understood why farmers were protesting at the AGM.”

Calls for grocery adjudicator increase in volume

Calls for the implementation of the ‘groceries code adjudicator bill,’ which proponents believe would redress some of the imbalance in the supply chain and enforce codes of conduct on the largest supermarkets and processors, have increased in volume.

Not only does the bill have cross-party support, but an unlikely variety of non-governmental organisations, including ActionAid, Friends of the Earth and the NFU have called for the instatement of an ombudsperson. However, the British Retail Consortium, which represents many of the supermarkets (four of which control almost 80% of food retail, according to the latest figures), has attacked the bill. The supermarkets say more regulation would undoubtedly lead to further rises in food prices, which have already reached new heights in 2011.

Andrew George, Liberal Democrat MP and leader of the Grocery Market Action Group, fiercely rejected this threat, "The cost to each retailer for the costs of the adjudicator is put at £120,000 per annum. It's a gnat bite – nothing, given their record profits in the depths of the greatest recession of modern times.” Addressing the motivation behind the supermarkets’ resistance to the bill, Mr George demanded, “Are they saying that it will cost them more to behave decently and legally in their dealings with suppliers?"