Earlier this week, the chairman of British Berry Growers Nick Marston said that “confidence in their retailer partners had been dented,” notably impaired by an outdated Groceries Supply Code of Practice (GSCOP).
“It is not fit for purpose in today’s inflationary marketplace,” said Marston, whose group represents 95% of those who grow in the commercial soft fruit industry. “Growers are struggling with static returns and ever-increasing costs, especially labour costs. This is creating a crisis for British producers who cannot now grow fresh berries on a financially sustainable basis.”
The result, Marston points out, is that 67% of all growers in his sector are worried about how long they can make it in the market.
“While supermarkets prices have risen, prices paid to growers have not,” he said. “For strawberries, the cost of production has increased by 18p per 400g pack since 2021. Retail shelf prices have risen by 27p pack over this period – an increase of 14.8%. However, average grower returns are up by only 2.3% or 3.6p.”
In addition to ensuring that businesses thrive, the GSCOP is aimed at providing a framework for retailers to deal fairly with their suppliers, including the appointment of independent Code Compliance Officers. However, many growers believe those agreements are being circumvented and that they are losing direct pipelines to those 14 retailers – from discounters Aldi and Lidl to traditional supermarket giants such as Tesco, Waitrose, Morrisons, Asda, M&S, and others.
That’s let to a severe disconnect between the two, especially when it comes to discussing prices.
“Currently there is no requirement for fair dealing on pricing in GSCOP,” Marston said. “Supermarkets can put up their prices to shoppers at a push of a button; growers cannot. Growers would like this addressed.”
Growing discord with GSCOP
The GSCOP includes several tenets, and these are noted on retailer sites, including Tesco’s own page. They include:
- Written supply agreements
- No retrospective changes to agreements
- Reasonable notice of changes to supply chain
- No delay in payments
- No obligation to contribute to marketing costs
- No payments for shrinkage
- No unjustified payment for handling customer complaints
- Clear process for de-listing suppliers or significantly reducing volumes
- New starter and annual refresher training for groceries buyers
While some of these are being met, several are not, growers say.
Last autumn, NFU Horticulture and Potatoes Board chair Martin Emmett attended the Groceries Code Adjudicator conference and hinted at the severe divide among the parties, saying that “the behaviours of retail buyers continue to be a source of pain for many grower businesses.”
Emmett wrote in a piece for the NFU that buyers were delaying decisions on pricing, amounts, and even their agreements. The big takeaway: the GSCOP was not providing enough support for growers to combat those practises.
“As one grower said in a recent NFU negotiation training day, ‘they’ll dangle you over the edge of the cliff, if they have to, to get a lower price,’ “ Emmett wrote. “I fear many are doing just that, right now.”
The high turnover among buyers and lack of deals beyond one or two years has also placed a massive pinch on growers, who understand the strains on the market but need assurances that their futures are solid.
“We need stronger, clearer legislation which will get retailers to commit to being long term partners, paying growers a fair price and buying British when in season,” Marston said. “We also need to impose rules to prevent legislation avoidance by retailers by inserting service providers into the chain and for government to take a strong line on protocol breaches.”
That’s not to say there is not value in the GSCOP, highlighted by the above bullet points. It just needs updating.
“There’s no denying GSCOP has made a difference and has put an end to some appalling practices, but it needs reform, and now, to give growers a fair chance,” Marston said.
Those wishing to voice their opinions confidentially on how retailers are complying with the GSCOP can do so by taking the GCA annual survey. The GCA will be doing follow-up interviews with some respondents and plans to release results in a few months. The deadline for submissions is Feb. 25.
