Food Industry Competitiveness

The hon. Gentleman is right. I was going to come on to that point, but I shall touch on it now. The fact of the matter is that the biggest supermarket chains in the country, on which the efforts of the new ombudsman will be focused, have big suppliers by definition, as those suppliers are the ones who can produce the stuff in sufficient quantity to get it across the country. By definition, then, big supermarkets tend to have big suppliers. Many of those suppliers are huge multinational companies in their own right. In fairness to my hon. Friend the Member for Arundel and South Downs, he has recognised the issue and wants an ombudsman to look at smaller suppliers rather than suppliers per se; I give credit to my hon. Friend in that regard. However, we could end up with a ridiculous situation in which an ombudsman intervenes on behalf of a huge multinational food company that is actually bigger than the supermarket. In many cases, we should congratulate supermarkets on being hard-nosed in making big multinational companies reduce their prices for the benefit of the consumer rather than building up even bigger profits for themselves. Some pharmaceutical companies, for example, are massive and have huge marketing budgets. Another myth is that supermarkets persuade suppliers to do special offers and make the supplier pay for them. The fact is that suppliers fall over themselves to provide special offers for supermarkets. They say to the supermarket, "Please can we do a 'buy one, get one free' offer on our product?", because it is part of their marketing budget. They use those huge budgets to urge supermarkets to make such offers, and they are quite happy to pay for them, because it helps to build their market share. In my time at Asda, I might add, we used to say to suppliers, "Rather than you coming to us with 'buy one, get one free' or 'three for the price of two' offers, why not just have a long-term reduced price?", so that rather than the people who buy the product in that particular week or month or families of five or six benefiting, every single customer benefits from an overall lower price. It is not supermarkets that force suppliers into these deals; it is often the suppliers themselves who are insistent on those special offers. It is another misapprehension.