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The British Retail Consortium state that the much-heralded Groceries Code Adjudicator will only cover supermarkets' relationships with direct suppliers. “It is a myth that it will make any difference to the majority of farmers”. The Adjudicator will make no difference to most farmers because few deal directly with supermarkets. Very few farmers have a direct contractual relationship with retailers. Farmers generally supply intermediaries, such as processors and dairies, who then supply retailers and other parts of the food sector such as catering and manufacturing.

Peter Kendall says in response to Wednesday’s announcement “It is vital (the adjudicator) has the power to take credible evidence from reputable sources, and to use its judgment to assess its worth, before launching an investigation. At present, the ability of third parties such as trade associations to provide such evidence is likely to be prohibited by the Bill, something which will seriously hinder the effectiveness of the Adjudicator. “While we move one step closer to a better functioning supply chain, there’s still work to be done. We applaud the government for sticking to its commitment to introduce an Adjudicator, but warn that to introduce one without the powers to do a proper job could in fact be counter-productive, entrenching unfair practices in the grocery supply chain even more deeply.”

Vion, a Dutch based company and one of Europe’s largest food manufacturers, is a case in point. Graig Producers, a farmer coop, have suspended trading with Vion, following an ultimatum from the company to the farmers that they must be paid directly by Vion, bypassing their marketing group.

Objections have been raised by the farmers about the particular kind of additional information that they are now expected to hand over to Vion.

The concern is that by side-lining the farmers’ group in the payment process, Vion, armed with the information they gather directly from the farmer, might choose to select predominantly large farms. This could result in the smaller traditional family farms having to find their market through inferior contracts or live markets.

“Vion’s action threatens to rip the heart out of our relationship with our members.” says Bob Kennard, managing director of Graig Producers. “We believe it also represents a major shift in the balance of power between beef and lamb producers and the processor, as the move affects all farmers’ groups, not just ourselves. The widespread support we have had on this issue reflects concern that it could result in more large-scale beef and sheep farms and the demise of smaller family farms. This has already happened in the dairy sector, where the number of dairy farmers has halved in the last 10 years. We have very few options for marketing our members’ organic livestock, and this action restricts us further.”

Transparency or Control

But Vion claim that they are responding to calls for greater supply chain transparency.  Vion has recently introduced a revised payment process that sees farmers receiving direct payment for livestock, which we believe will also deliver greater efficiency for farm administration. Graig Producers argue that rather than transparency this move is one of greater supply chain control – with little opportunity for farmers’ marketing groups to question members’ payments, as they currently do. “We cannot see any savings in farm administration. Indeed, if farmers have to take up problems with the abattoir directly, rather than through their group, this actually adds to farm administration”.

Vion have stated that the issue with Graig Producers is isolated and is not a move to bypass co-operative groups. But Meadow Quality Ltd was also subjected to a similar request from Vion and whilst they continue to supply pigs they no longer supply beef and sheep.


Vion is farmer-owned, and is a significant British farmer in its own right. They deal directly with thousands of small producers throughout the UK, and recognises the importance of promoting a strong, sustainable agriculture supply chain. On the Vion website, in their corporate responsibility section, several important aspects are covered, including Safety and Quality, Sustainability, Our people, Our environment and Animal Welfare. But Graig Producers note that nowhere on the website can they find reference to Vion’s responsibility to their suppliers.

Wider Support

Graig Producers has strong support from its farmer members together with a diverse range of organisations and individuals, all with an interest in a vibrant rural community, and who strongly oppose Vion’s action. These include Professor Tim Lang, of the Centre for Food Policy at City University London who commented “This case highlights continuing tensions in the UK food system to which Governments – shame on them - turn a blind eye. The ruthless power relations are driven down from retailers via processors to farmers. When farmers get better organised, with co-ops, look what happens!”

Well established Group

Graig Producers is an independent livestock marketing group that has been operating for over 17 years supplying organic beef and lamb to the major supermarkets via their designated abattoirs. The Group has several hundred members - from small family farms to large estates - for whom it secures economies of scale through collaboration, helping to optimise income, minimise costs, and improve management.

“Vion are now demanding that farmers sign a new form of individual contract with them before they will be paid for their livestock” continues Bob Kennard. “We believe this reflects their increasing control of the supply chain. We are concerned that this may ultimately result in the amalgamation of family farms. But we have shown that economies can be achieved through farmer collaboration, rather than amalgamation. Why risk the collapse of family farms and the consequent devastating impact on the wider rural community, when there is another way?”    

Supporting comments

Andrew George MP, West Cornwall and the Scillies Constituency of St Ives and Chair of the Grocery Market Action Group which has led the campaign for a supermarket and grocery supply regulator, says: "We should be encouraging joint initiatives and cooperation between farmers. As the Government prepares to introduce measures to improve fair dealing in the supermarket supply chain it's important to make sure that practices which could undermine the viability of small livestock farmers are resisted."

A poll of Graig Producers’ members returned 98% with the view that they did not want to be paid direct by the abattoir. One member commented “This is our chosen route to market, we have a contract with Graig.” Another said “(some supermarkets) would start controlling how we produce our goods and the small producer would be forced out as has happened to the milk industry”; “Graig provides advice regarding the correct route to market, hopefully then acting on my behalf to achieve the best possible prices long term”.

According to Graig Producers and its supporters these views confirm how vital a trustworthy and reliable route to market is for organic producers.  “Organisations like Graig Producers are an essential part of the marketing chain,” said Rt Revd Stephen Platten, Bishop of Wakefield.  “Not only do they promote collaborative marketing and give a large group of producers a coherent voice but they serve to promote diversity of production from farms of a wide range of sizes.”

In contrast, earlier this lamb marketing season Graig Producers secured a landmark agreement with major meat processor, Dunbia, on guaranteed fair prices for organic lamb, with the aim of ensuring a year-round supply and removing the need for imports.

Petition

Graig Producers say the public are invited to join others in urging Vion to reverse its decision, by signing an on-line petition at www.ethicalFood4Me.org

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