Supermarkets

Oral Answers to Questions — Environment, Food and Rural Affairs – in the House of Commons at 11:30 am on 19 July 2007.

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Photo of Keith Vaz Keith Vaz Member, Labour Party National Executive Committee 11:30, 19 July 2007

What recent discussions he has had with supermarkets on the prices of foodstuffs provided by suppliers.

Photo of Jonathan R Shaw Jonathan R Shaw Parliamentary Under-Secretary (and Minister for the South East), Department for Environment, Food and Rural Affairs

Ministers have held a number of meetings with supermarkets, but not specifically on prices paid to suppliers. Supermarkets' relations with their suppliers are currently being looked at by the Competition Commission as part of its inquiry into the grocery market.

Photo of Keith Vaz Keith Vaz Member, Labour Party National Executive Committee

I welcome my hon. Friend's elevation from the Whips Office to the Front Bench. The next time he goes shopping in Tesco, will he reflect on the anecdotal evidence that a large number of suppliers are very concerned about the fact that the big supermarkets, Tesco included, are using their monopoly power to force down the prices of foodstuffs offered by suppliers? I know that an inquiry is under way, but will he see what he can do, as the Minister, to check on the evidence?

Photo of Jonathan R Shaw Jonathan R Shaw Parliamentary Under-Secretary (and Minister for the South East), Department for Environment, Food and Rural Affairs

I thank my right hon. Friend for his comments. We need to get to the heart of the matter. There is a widely held belief that large supermarkets have a stranglehold on suppliers. That has been said with respect to dairy farmers particularly. We should support the investigation by the Competition Commission and welcome the fact that it will focus on dairy farming. My noble Friend Lord Rooker has written to the Competition Commission—we have made a submission. We will not comment on the outcome at this stage, but when the investigation is complete, we will. We look forward to the evidence that the commission presents.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

I welcome the new Minister to his position and I wish him well. I am delighted that he has mentioned dairy farming. It is a matter that I raised in the House only a few days ago. The dairy industry is in crisis. In my constituency, in the years that I have represented it, more than 50 per cent. of the dairy farms it once had are no longer in existence. One village which was all dairy, North Rode, now has no dairy farms. Will the Minister talk to the superstores and supermarkets—not just with their suppliers, but about the producers, and the prices that the producers get? We have a wonderful country for both dairying and the production of food. Let us use it to the advantage of this country and of people in other countries who are starving.

Photo of Michael Martin Michael Martin Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Chair, Speaker's Committee on the Electoral Commission

Order. I must appeal to hon. Members. They should put a supplementary question. When they speak for too long, it puts other Back Benchers at a disadvantage. That should go on the record.

Photo of Jonathan R Shaw Jonathan R Shaw Parliamentary Under-Secretary (and Minister for the South East), Department for Environment, Food and Rural Affairs

I thank Sir Nicholas Winterton for that question. When any business collapses, it is painful, but when a farm collapses it affects all of us, because farmers are the stewards of our countryside. We have seen a decrease in the dairy industry of about 6 per cent. over the past five years, but that is not specific to Britain. It has happened in Greece, Spain and Portugal. However, we are seeing price rises now at the farm gate. The dairy industry needs to move into other products, such as cheeses and organic yoghurts, as happens in Northern Ireland, where the industry relies more on the export market and prices are rising higher. We should eat British cheese—there are 750 varieties, more than in France—followed by British strawberries, preferably from the garden of England.

Photo of Brian Iddon Brian Iddon Labour, Bolton South East

Is my hon. Friend as concerned as I am about the hype of so-called organic foods by the supermarkets, which is obviously resulting in higher profits for them, but not necessarily for the growers here in Britain or in faraway places such as Kenya?

Photo of Jonathan R Shaw Jonathan R Shaw Parliamentary Under-Secretary (and Minister for the South East), Department for Environment, Food and Rural Affairs

I welcome the point that my hon. Friend makes. We want a fair deal for farmers in Britain and for farmers in developing countries as well, so that they can profit. It is vital that labelling, particularly of organic products, is accurate. Supermarkets should be clear that when they tell the consumer that their product is organic, it should indeed be organic.

Photo of Brian Jenkins Brian Jenkins Labour, Tamworth

Does my hon. Friend recognise that we live in a capitalist system? Does he recognise that some of these supermarkets produce the most efficient delivery systems for foodstuffs in the world? Does he recognise that to try to change that philosophy is probably a bit more than he and his Department are capable of? Does he recognise that free trade—

Photo of Jonathan R Shaw Jonathan R Shaw Parliamentary Under-Secretary (and Minister for the South East), Department for Environment, Food and Rural Affairs

I always recognise my hon. Friend. I take on board his points, but I think it is important that we get the balance right in the relationship between the supplier and the supermarket, as both require certainty and flexibility in today's world.