That is a valuable point. There have been a number of references to the dairy industry, and to small dairy farmers all over the United Kingdom. It should be borne in mind that very few small dairy farmers deal directly with the supermarkets. They nearly always negotiate through a dairy producer, someone who is making cheese or yoghurt, or even a bottling plant. The hon. Gentleman has made an important point, and we shall probably need to consider it once we have sorted out the Bill.
Another important topic is that of promotions. Many consumers will no doubt think that “buy one, get one free” offers and other promotions show supermarkets’ generosity, as they must be shrinking their margins. The truth, however, is that it is the primary producers who pick up the tab for the reduced price of the product, and they are often also asked to increase the supply of that product.
Earlier in the year a series of adverts ran on TV promoting asparagus at half price. The weather had been so shocking that I do not think there can have been a single blade of English asparagus on the market at that time. I almost shuddered for our asparagus producers. Many of them had obviously signed a contract to supply a supermarket, and an advertising spot had been booked six months in advance, without regard to the weather. When that time slot in the calendar came, the
adverts rolled out and asparagus producers were probably having to buy asparagus from Mexico or Spain to meet their contracts to supply that promotion. There is no flexibility in the system, or common sense from some supermarket buyers.
The worst practice, however, is backdating. A primary producer can supply a supermarket for two years, let us say, and then the supermarket can suddenly say to that producer, “By the way, we’re backdating the price of all that product you’ve supplied to us for the last 12 months, and you owe us £50,000.” That primary producer is then faced with the prospect of either finding that money from somewhere—borrowing it or taking it out of their bank account—or reneging on the contract and never being dealt with again. That truly is an abuse of power. I hope the grocery ombudsman will be able to stop such practices.
Key issues are what tools will be available to the ombudsman and how he will make sure the code of practice is adhered to. That brings us to schedule 3 and the subject that has been dominating the debate: if the adjudicator cannot fine supermarkets, will he have sharp enough teeth to ensure that the code is adhered to? I do not ask the Minister to commit to anything in his winding-up speech, but I ask him to assure us that he will have an open mind and will consider the Committee’s deliberations, and be willing to make an amendment if he feels that that is the right thing to do.
I reiterate that there is much more good than bad in this Bill and it represents a great step forward. With the will of the House and a fair wind, I think we can get to the right place for the primary producers, and also for our consumers, who want good quality food in our supermarkets at the right price, and, crucially, at a price that is sustainable.
Small dairy farmers begin the process of producing milk by choosing an animal to breed. They then breed that cow, which takes nine months, bring that heifer to full production, which takes two years, and then, finally, they get milk from that animal. It takes four years of hard work and investment to get to the point of supplying any milk, therefore. In that time, supermarkets can change their contract on an hourly basis. The whole of the risk is with the primary producer, and at present there are occasions when the whole of the reward is with the retailer. I sincerely hope that we can start to redress the balance in that relationship, to the benefit of supermarkets, primary producers and consumers.
8.4 pm