Tuesday, September 11, 2007

But Zac....We Like Supermarkets !

Bed hopping Zac Goldsmith wants Supermarkets to charge us for Parking .The thinking comes from the constituency surrounding the Communities Bill and I have attended a couple of their meetings in which they roll up a lot of worthy local issues in this case the hollowing our of CBD`s ( Central Business Districts ).They are joined in their stand against slash and burn big business, by disparate groups like local shop owners and CAMRA . All those, in fact, who value commercial heterogeneity at a local level. Nice people and I partly approve.

.Given the parking restrictions driving local shops to bankruptcy, it is silly to talk about the free market. The supermarkets operate as a Cartel against farmers and buy up land so as to thwart proper competition. They use their monopoly status to undercut smaller retailers who provide the sort of cultural capital we should ascribe value to.

The Zacolytes ( Thankyou Lud) , are also to the fore in demanding local people have a greater say in planning decisions. As ancient woodlands and gardens to fall into the gaping maugh of the Mantioch ,big business ,for ordeuve .My approval grows ... I want to like the idea ......

But....and it’s a big but. Here are the pictures in my mind . Harassed wives on a budget crying with frustration that they are forced to add pounds onto their bill so Toff totty can roll up outside the Farmers Pork Pie shop in ? “ The Village” ...of Highgate in a Prius ( Dad has a Range Rover). People who tut at the supposed exploitation of the third world accidentally picking up free trade bananas and dropping them as if they were scalded when they see the price difference. . David Cameron promised green taxes should be, ”or” not ,‘and’ but in this case this “ environmental tax” is said to be ploughed back into Public transport . A bad bad start.

I suspect Supermarkets do use supernormal profits to subsidise Parking then surely this is matter for the Monopoly board and the legislation is already in place. Shouldn`t we look carefully at the way in which monopolistic practices go under the radar whereby they have the spare cash. Supermarkets may be loathed by those with the time and money to source original Orkney Lamb hung in the medieval fashion ,but they are loved by everyone else for delivering us from the disgusting sub quality and over priced produce my mother struggled home from local shops with in the 1970s .

They have scoured the word for Avocado Pears ....Olive Oil. ....sun dried tomatoes humus fetta cheese, yoghurts with no fruit in them (which I thought was the point of yoghurt). Big prawns, John Dorry , Ostrich , Covent garden Soups and . To Zac this may be terribly passé but most if us are still think of Supermarkets as a miracle of global Capitalism.This has all the signs of being an idea with promise not properly thought through. It is half baked and I want it double baked. (Like the twice baked banana cake they do in Tescos ...its lovely try some tomorrow ! )


Anonymous said...

"Zaccies", eh? I like that.

May I also propose "Zacolytes"?

Newmania said...

Zacolytes is so much better Lud...( I `m having that") Brilliant

Anonymous said...

Go, Zac! ZAC FOR PM - after David and Boris - we love ya baby xxx

Thank you, THANK YOU for at long last standing up for us SMEs, the vital seedbed of the economy and Uk's largest employer which nulab and B ruin treats with such contempt and which the supermarket giants are killing off.

As for housewives - I'm a housewife and an SME owner, n.


While the giant multis are automating to reduce their staff numbers, SMEs continue to employ almost 60% of staff, n, over 16 million people, plus a couple of million sole traders. God help the UK economy without us.

Yet nulab's insane over-regulation and encouragment of giant multi's to establish their destructive dominance in far too many markets leaves the majority of SME's at the mercy of these giants or their pressurised supply chains.

SME margins are being perilously squeezed by multis and the government between them. Many have had to contend with a 50% drop in profits.

Much more of this pressure and millions of SME owners will decide it's more profitable to close down and put our money in investment accounts - with HUGE JOB LOSSES - than to trade.

Can't finish this now as I'm too busy, but will come back to this later.

Auntie Flo'

Newmania said...

I thought it might be up your street Flo I a bit more conflicetd as you might exopect but not at all unsympathetic as I tried to suggest

Anonymous said...

And you really believe there is such a thing as FREE institutional parking?

Blimey, n, I wouldn't have thought you were the type for fairy stories.

AS it stands now, thanks to nulab, the taxpayer and council tax payer subsidises the tax billS of the giant multis.

First because nulab exempts the supermarkets from paying the tax on their free parking places -tax which everyone else has to pay.

So who pays this tax for the supermarkets? Us. All of us.

Correct me if I'm wrong, but I believe the cost to the taxpayer to be around
200-300 in lost revenue million a year.

Second. When my water company's engineers came to investigate the first time my street was flooded, they concluded the floods are caused by too much waste water coupled with too much rainwater runoff and too little drainage pipes and streams to hold it.

Then put in more more pipes, I said.

Can't, they told me, because the water treatment centre can't handle any more water and we can't afford a new treatment centre.

Where's all of this extra water coming from? Said I.

Do you have a large supermarket or new estate near here. Yep, estate and supermarket up the road, I told them.

There's your reason, the engineers said, supermarkets and housing development generate a huge amount of additional waste water and rainwater runoff. They import in more usage and waste water generation - and they concrete over the soakaways.

How many billions is flooding costing UK now and estimated to cost Uk in future, n?

Are the supermarkets going to pay the cost of share of the flooding? No! We're going to pay it, you and I all of the other taxpayers.

And there was me thinking you wanted tax cuts, n, I was obviously wrong.

Auntie Flo'

Anonymous said...

Newm -

Cool! I'm a neologist now!

"Conflicted" is a good description of my position, too. Auntie Flo's explanation is v. good. Since I couldn't put it any better, I'll call it the "on the one hand" position.

It's the "on the other hand" that causes the conflict. Remember that post you did the other day on relying on reason rather sentiment. It applies here too.

Basically, what are small businesses, such as local shops, for? What's their purpose? Does anyone believe they have a God-given right to exist? I've not heard anyone say that in so many words. So what's their purpose?

Look at it from my, i.e., the customer's, point of view. They are there to offer me goods or services , in return for which I offer them money. If a particular shop has nothing I want, or is too far away, or isn't open when I need, or provides rubbish service, chances are I won't shop there.

Yes, of course, there are times when I will choose to overlook one or more of the negatives for whatever reason. But the point is, it is my decision who I choose to give my money to. If a business want to attract my trade it has to offer me something I consider worth the trade.

OK, so small shops cannot possibly offer the range that Tescos can. But what about personalised service? Or getting to know me and my buying habits and ensuring the things I purchase regularly are kept in stock? Or convenient hours?

Sorry this is so long. But it's not an easy question - certainly not as simple as just slapping taxes on the big boys.

Mermaid of Moorgate said...

Will Zac goldsmiths' piece of fluff charge him for "parking and riding"? We should be told. Newms, you have been busy politicing. We're worried about you!

Newmania said...

I`m v busy working now ....later

Anonymous said...

Lud said

What are small shops for? Do they have a God given right to exist?

Lud, you're asking that question because you've not grasped what an SME.

And you haven'tgrasped that there is no such thing as a supermarket.

There are only SME's, they are 99.97% of UK businesses and almost 60% of UK jobs and if SME's disappear there would be not a frozen or chilled meal nor much of anything else of any description in any alleged supermarket anywhere.

And the stock that the alleged supermarkets do have would be much MUCH MUCH more expensive.

I'm at work and too busy to explain why now, but, rest assured, I will do so later.

Auntie Flo'

Anonymous said...

Sorry, I meant to say that you've not grasped what an SME is, Lud


Anonymous said...

Aunti Flo -

Lud, you're asking that question because you've not grasped what an SME.

That's a very distinct possibility. While it would be an exaggeration to say that I make this stuff as I go, neither can I say I have the sort of direct experience of the thing that you do. And since that rational approach I claim to prefer relies on knowing something about what you're talking about, I really do welcome any light you can throw on the subject.

In my defense, however, can I just say that I was intentionally limiting myself to the issue of small shops. I know there's a lot more to SME's in Britain than just them.

* proofreading the above (ahem, ahem, Newms :-p ) I realise it sounds a bit sarky. I promise it's not meant to. I really do want to understand.

Newmania said...

Flo is all bluster Lud , she`s a sweety really ,. I approve of rectifying the attack on small and medium business and maitaining diversity in town centres especially by unfair Parking but to , in effect , tax people , is not the way to go.
I wish I could think of a way to give CBD shops tax breaks . I would say that when COucils have their CPZs the money they give to this that or the other worthy cause that tax should already either cover or not, should go back to the shops as compensation for lost custom .

But messy?

Anonymous said...

Newm -

I listen to R4 a lot. And I mean a lot. One of the complaints you hear quite often there is about how all town centres look alike - they all have the same high street shops.

Now, this may be only tangential to what you mean by "diversity in town centres", and if so, I apologise. But can I just say that that complaint (the one you hear on R4) makes me just a little nuts?

OK, so how would this work out in practice? Well, if town centres are not each to be the same as the next, then they have to be different from one another, right? (Yeah, yeah, I know it's obvious - stick with me on this one for a mo.)

How will they be different? Presumably by having different shops. That would mean that if one town has a Currys or a Target or whatever, then the neighbouring town shouldn't have one too.

So who decides which town gets a branch of a particular chain and which doesn't? Who is taking it upon themselves to tell me I can't get McDonald's in my town because the next city over already a McDonalds?

It's simply none of the business of those whose aesthetic sensitivity is offended by similar-looking town centres. It's between me and the shop and whether we decide to do business with each other.

OK, rant over. I think I'll go have a drink now.

Newmania said...

I also listen to R4 when I get the time and I understand what you mean. there is something a little unrealistic about it Lud ...I `m not sure

Anonymous said...

Lud said:

So who decides which town gets a branch of a particular chain and which doesn't? Who is taking it upon themselves to tell me I can't get McDonald's in my town because the next city over already a McDonalds? (Lud)

Here's who, Lud, part of the power list published by the right-wing think-tank the Centre for Policy Studies:

BA boss Bob Ayling
Northern Foods chair Lord Haskins
Lord Sainsbury
Virgin boss Richard Branson
Tesco chief executive Terence Leahy etc.

the traditional old boys' network no longer wields the power in Britain, according to CPS

Tony Blair, says CPS, created an entirely new elite - where pop stars like Bono, Labour donors and big business hold sway.

Author Martin McElwee said Blair created and ever-growing number of QUANGOS, task forces, sub-committees and even Lords benches and packed them with his Labour-supporting chums.

The report said Blair had about 117 particularly powerful cronies - like Lord Falconer, Lord Sainsbury and David Puttnam who are rewarded for donations and loyalty to nulab by being made our decision makers on quangos and committees "again and again".

So now figures from the media, showbusiness, the arts and business hold the real reins of power.

And at local level?

This explains what BAA, two clueless vicars who are both nulab members and most of the labour party are doing on the UNELECTED, UNANSWERABLE, UNDEMOCRATIC EU REGIONAL QUANGOS which run my town and region.

There will be similar nulab members, donors and obediant others on the unelected quangos etc running your town and distict, Lud.

These, part nulab compliant, part self-serving, plus nulab are the people who make all the decisions affecting our lives on a national and local level.

McElwee said that this is more than just the usual elite of followers spawned by any government - it is a


An UNACCOUNTABLE ruling class that you and I do not belong to and have little or no influence over, Lud.


We have no means of making these people accountable and that is an abuse of democracy.

Auntie Flo'

Anonymous said...

Auntie Flo -

Thanks for that.

I'd like to follow up on some of the sources you cited. An abuse of democracy? Damn straight. Though I was really more venting my spleen about bossy sorts whose delicate aesthetic sensibilities are offended by similar-looking high streets - the sort of precious souls you tend to get pontificating on R4.

Anonymous said...

I should qualify the last post by adding that McElwee did argue that dissenters also given positions on these quangos etc - but he suggested this is to silence them where they would otherwise criticise.

There is also a media power list which is a bit out of date now:

BBC Director General Greg Dyke
Planet 24 owner Lord Alli
Granada TV chairman Gerry Robinson
UN&M chief executive Lord Hollick
Former Guardian chairman Lord Gavron

There is also well founded concern about both number of the quangos and task forces that these people are appointed to and the cost of them.

While the government claimed that about 44 task forces and 100 review groups had been set up during nulab's first 18 months. However the Peers disagreed. They said that Government figures "contrasted starkly" with those of the University of Essex, which said 295 task forces and similar bodies had been set up during the first 18 months of nulab in government.

So there you have part of my objection to the supermarkets, Lud, we now effectively have
GOVERNMENT BY SUPERMARKETS & big business, plus by the media and celebrities.

Something good old Baroness Miller of Hendon (Conservative) said - in respect of task forces - were a way of "downgrading Parliament" and were not transparent or accountable and that these were "QUITE SINISTER"

I totally agree with her

Auntie Flo'

Anonymous said...

Corporate Watch Tesco Profile

"Revolving doors"

"According to Red Star research, in the late 1990s Tesco executives featured on six government task forces, more than for any single company and far more than the other supermarket chains."

"These included Terry Leahy, who sat on the Board of Trade's Competitiveness Advisory Group and Tesco Retail director, Michael Wemms, was a member of the New Deal Task Force. John Longworth, group trading, law and technical director of Tesco PLC, sits/sat? on the Government Advisory Committee on Packaging Waste and Recycling, and is also one of nine commissioners of the Health and Safety Commission."

"Lucy Neville Rolfe, Tesco's Director of Group Corporate Affairs, also sits on Government committees."

"Tesco gave the Labour Party more than £5,000 in sponsorship in 1997 and 1998. It is the biggest backer of the New Deal scheme and has offered 1500 'opportunities' for New Deal applicants. Tesco's former Chief Executive Ian McLaurin sits in the House of Lords."

"In 1999 Tony Blair's government launched its first annual report in Kensington Tesco"

"Tesco was also a £12m sponsor of the Millennium Dome."

"It was reported in The Observer at the time that lobbying firm, LLM - involved in a campaign on behalf of Tesco to block plans for a tax on shopping centre car parks - had 'suggested that a £12 million Tesco donation to the Millennium Dome was part of a 'quid pro quo deal'—giving its support to a government project in order to endear itself to New Labour."

"The paper went on to say that there is no suggestion that Tesco made the Dome donation to help it get its way over the car park tax issue. But the plan to impose the tax was dropped from the White Paper on transport—and the terms of the exemption were exactly as LLM's Ben Lucas had suggested."

"The Sunday Times said that the estimated cost to Tesco of the car park tax would have been £40 million."

"Tesco has had a prominent presence at Labour Party conferences."

"In 2002, it sponsored the National Reception at the Party conference. In 2003, it sponsored the Constituency Delegates' Welcome reception, and co-ran a fringe debate 'Promising the Earth? Food, Farming and Rural Communities': presumably a fascinating 'greenwash' occasion considering the reality of Tesco's total contempt for UK farmers and rural communities."

"It is quite clear that Tony Blair has a fascination for successful corporate bosses, including Terry Leahy who was knighted in 2002."

"Many campaigners believe that supermarkets bring undue influence on local government, especially when seeking planning permission for stores. Transforming local government is certainly on Tesco's agenda."

" Tesco is a corporate partner of the New Local Government Network (NLGN) which is 'an independent think tank seeking to transform public services, revitalise local political leadership and empower local communities'. NLGN was favourably endorsed by Tony Blair, 'Modernising local government is vital to the future of our communities. NLGN contributes innovative and thought-provoking ideas to the debate on how we achieve that'."

Then there's the scandal surrounding "Dame Shirley Porter - Heiress to the Tesco fortune
'Shirley Porter was responsible for the worst, the most cynical and callous and indeed the most costly conspiracy of political corruption in this country in the modern age' Peter Bradley MP"

"Tesco is keen on employing former government officials. In 2001, it paid Philip Gould, one of Tony Blair's most trusted political advisers, to help reorganise its publicity, media and lobbying operation."

"It also hired David North, the Prime Minister's private secretary and a specialist in rural affairs, to take up a new position as director of government affairs and Corporate Social Responsibility, a post that was introduced as a direct result of Philip Gould's advice."

" North represented Blair on the Rural Recovery Task Force, set up to rebuild British farming after the foot and mouth crisis. He also helped to run the Cabinet Office's unit to support biotechnology at the height of the GM foods controversy in 1999."

Auntie Flo'

Ed said...

While it is certainly true that totalitarians have been destroying our town centres for generations, would we really manage without hypermarkets even if they hadn't?

Let's look at good old France shall we? They have protected their towns from the planners, have good parking, excellent local shops, quality products fairly priced but LO! they have EVEN BETTER supermarkets than we have here!

What is going on?

Zac`Goldsmith can f*ck back off to where his fantasies are. Charging for Tesco parking is not the way forward it really isn't. Food and sundries are already much more expensive here than on the continent for one very simple reason: we are restricting our land use too much already.

I'm not for concreting over the whole country but is it not obvious that by safeguarding the green for the rich we are f*cking over the rest of the country?

As Andrew Boff rightly said yesterday if Conservatives are not for liberation what are they for?

Anonymous said...

While it is certainly true that totalitarians have been destroying our town centres for generations, would we really manage without hypermarkets even if they hadn't?

You're over-dramatising, Ed...living without hypermarkets....awe come on :)

No one wants to - or could - put supermarkets out of business.

Though I can actually remember life before supermarkets when I was a child and it was pretty good. In fact I remember there being a much better quality of life than we have now. At that time, in the 60s, Sainsbury had small SHOPS with just two counters where you were served by staff wearing big pinnies. There weren't any aisles, self service or carrier bags and sausages were one of the few convenience foods. You tended to buy only what you needed and could afford. There was far less packaging, far less waste to be disposed of (one small dustbin which was never full), and there was considerably less personal debt except for re tally men. We didn't waste food. Yet we ate bl**dy well and never went without, believe it or not.

Anyway, we don't need to live without supermarkets. We just need the giants to stop behaving like oligopolies, to stop threatening our democracy and to keep their hands off our local and national government.

How can it be libertarian, Ed, for supermarkets to be runnng our government on unaccountable quangos?

You surely don't want that, do you?

Auntie Flo'

Anonymous said...

ED said:

I'm not for concreting over the whole country but is it not obvious that by safeguarding the green for the rich we are f*cking over the rest of the country

That's a very good point. I really sympathise with young people who can't afford their own place. My 25 year old daughter was forced to live at home until a few months ago because of the cost of an alternative.

We both needed independence and privacy - which we couldn't have living on top of each other. The pressures inevitably led to unnecessary rows that neither of us wanted to have with each other. Now she's sharing a private flat, but has to pay a huge amount for rent.

So I accept that there's a strong case for development. However, the case for proper immigration control is far stronger, as out of control migration to UK is the cause of our housing shortage. And I don't accept that there should be the huge and unsustainable volume of development in the South East that we're getting. Especially since the development near me floods my street and other parts of my town.

Auntie Flo'

Ed said...

Of course I don't want that, but that isn't market power, that is corruption - a different set of people to attack.

There are plenty of laws against abuse of market power and corruption.

Oh and I agree about the packaging! It makes me laugh the big chains say that we can't get rid of excess packaging because the consumers want it - but in the case of humous it's the cheap range that has the excess cardboard and the expensive one just just had a plastic tub.

Ed said...

I agree we can't allow the population to go on increasing forever. That means stopping encouraging people having children, reducing immigration and making city-dwellers live at higher densities.

Oh yes, and letting people build more houses and flats on already developed space. Or supermarkets if they want.

Anonymous said...

newmania said:

suspect Supermarkets do use supernormal profits to subsidise Parking then surely this is matter for the Monopoly board and the legislation is already in place.

Excellent point, n, I bet they must misuse their supermarket profits for this.

The problem is that nulab did away with the Monopolies Commission just as it's done away with so much else that used to protect us and our democracy. We now have nulab's Office Of Fair Trading, Oft, which seems to be more concerned with consumer rights than with controlling monopolies.

Nulab have changed the law in favour of the supermarkets too - what a surprise! Whereas, under the original monopolies law, I understand that companies were legally prevented from aquiring more than a 25% market share, now the rules have been changed and manipulated to allow Tesco over 31% market share and still rising.

Now we have the following:

The supermarkets operating today

Tesco – 31.5%.

Asda – 16%.

Sainsbury’s – 16%

Morrisons - 11%

Somerfield – 5%.

Waitrose – 4%

Iceland - 2%.

The Co-op - 5%.

Lidl and Aldi – 2%.

So over 96% of our grocery market is largely dominated by just 4 companies.

And - at the behest of these supermarkets who are so influential in local and national government - the remaining independents we have are being squeezed out of business by unfair over regulation of parking.

Is this a mere coincidence?

Whether it is or not, it certainl isn't good for our hig streets, our democracy - or for our SME's

Auntie Flo'

Newmania said...

I enjoyed reading that . Ed`s point about France is reall intresting isn`t it. They do seem to have both of course it is an exceedingly socially conservative Country more than I might be conmfortable with.

I think there is a distinct suspicion that Supermarkets are trading unfairly and that is why it might evened up. having se the voverage in the Sun of the idea I see poltically it is "Brave" but Cameron has always understood .Its not votes its seats and opening this sort of subject uo even is , I feel a good and valid idea.

It isn`t an easy one though it reningds me of carers in that uits not amenable to instant solution. cares save the NHS about £50 billion a year and many live in dreadful conditions while they are following natural love and loyalties we should support.

We have allowed this to be a left isseu but I think we should be talking about it , in the context of slashing away waste from the state. There is deperate devil in the detail but nothing would please me more than to hear cameron show that these peopl are not forgotten

Anonymous said...

Woops, sorry, I should have said that over 74% of our grocer market is dominated by just 4 companies.

96% of the market is congtrolled by just 9 companies.

Auntie Flo'

Ed said...

Flo - NL did not get rid of the MMC. In fact for the first time the UK got proper competition legislation on the level of the US model. Because that is one of the few things that the EU treaty is good for and our new regime is a reflection of that sensible regime. France has the same law, so does Poland, Spain etc.

Anonymous said...

newmania said:

I think there is a distinct suspicion that Supermarkets are trading unfairly and that is why it might even up. having se the voverage in the Sun of the idea I see poltically it is "Brave" but Cameron has always understood .Its not votes its seats and opening this sort of subject uo even is , I feel a good and valid idea.

Very true, n. I do feel that there's a groundswell building up against the supermarkets' monopoly, in particular among 'thinking' voters like us lot on newmania's blog, among disafected Lib Dems and swing voters that Zac and Cameron are right to capitalise on.

It extends too to the dreadful exploitation of staff in china. We may like our cheap goods, but do we want them so cheap if the true cost is Chinese workers dying at their machines after 48 shifts?

And do we really want these deals with China arranged by slippery Mandelson, totally at the expense of our own industry, what there is left of it?

Auntie Flo'

Ed said...

Flo, aren't Chinese employment "rights" up to the Chinese?

Newmania said...

Because that is one of the few things that the EU treaty is good for and our new regime is a reflection of that sensible regime. France has the same law, so does Poland, Spain etc

Actually Ed Croydonian did a Blog on EU competition laws a while ago and it all looked distinctly useless to me .Remeber in Europe they do not have competition as we do they are nothing like as open and my impression was that it had to be watered down to accomodate this .

Is this another thing where the EU are to blame then. I `d have to tap Mr. C for the details but I certainly do not remember it the way you said it .

Flo while I have great areas of agreement with you I am as you know somewhat to the right of you on many issues .....we both like Boris but then he does have that ability that the News Statesman noted to unite a very wide range of Conservatives...and now I am going to watch his inteview on DOughty Street

Anonymous said...

Ed said...
Flo, aren't Chinese employment "rights" up to the Chinese?

Entirely. But it is up to us, as consumers of the cheap goods produced under such inhuman conditions to decide if we are prepared to accept that - or if we should be demanding better conditions for those workers as a precondition of supply. It would boost our own manufacturing too :)

Auntie Flo'

Newmania said...

Nope sorry Flo I am not going to be changing the world with my shopping . If they sell it I will buy it you `ve disappeared into concerned Liberal land for me there .

Anonymous said...

Newmania said...

Nope sorry Flo I am not going to be changing the world with my shopping . If they sell it I will buy it you `ve disappeared into concerned Liberal land for me there .

Demanding better conditions for Chinese workers could help to level the playing field a little between China and UK - so it could save UK workers' jobs. I've twice quietly suggested this, yet no one seems to have picked this up, n.

Auntie Flo'

Anonymous said...

Ed said:

for the first time the UK got proper competition legislation on the level of the US model. Because that is one of the few things that the EU treaty is good for.

"OFT probe clears supermarkets

Businesses have harshly criticised a government watchdog's ruling that no change is needed in the way supermarkets conduct business with their suppliers.

The Office of Fair Trading (OFT) yesterday claimed there is no clear evidence that the Supermarkets Code of Practice is not working and that competition in the market for the supply of groceries is being restricted. It did concede that the Code could be used more effectively.

Business groups, however, slammed the decision.

"The code is toothless, and vague proposals to use it more effectively will not make it bite," said Duncan Swift, head of Grant Thornton's food and agribusiness recovery group. "The OFT seems undecided whether to use carrot or stick in its drive to improve the code."

The result was branded a 'whitewash' by the National Farmers Union for Scotland (NFUS).

The union declared that the study was flawed because the OFT will never receive on-the-record complaints from suppliers about unfair supermarket trading practices because it does not offer any protection to those who may be willing to raise their voice.

The OFT received 29 responses to its invitation for comments in its investigation.

"I am astonished that the OFT can continue to claim there is no evidence that the supermarket code needs changed and that the market is working well for consumers," said NFUS president John Kinnaird.

"We sent them exactly that evidence, but again, the OFT has chosen to ignore it because we didn't put the names of the companies suffering from the disgraceful trading tactics in our evidence."

Kinnaird said that supplier fear of losing supermarket contracts as a result of complaining is so pervasive that the Supermarkets Code of Practice is never used.

The Code, which applies to Asda, Sainsbury's and Tesco, would be better enhanced by greater use of written records of dealings between supermarkets and their suppliers and clear evidence of breaches, rather than general allegations, the OFT said.

OFT chairman John Vickers said that an independent ombudsman, as some groups have called for, would also require complaints to be transparent and sourced.

"Natural justice and common sense do not allow regulatory intervention in markets without proper evidence," he added."

Also, if the new regs are working, why does tesco have 31.5% of the market? That fact alone suggests to me that the regs are not working and that nor is the oft.

Auntie Flo'

Anonymous said...

Why are so many SME's going bust under nulab?

Over-regulation is obviously a major factor.

However, there's a common fallacy, the one proliferated by the supermarkets, that SME's are too over-priced and too inefficient to survive, that they cannot compete with the super efficient multinationals.


Grows the supermarket's crops, fruit and vegetables?
Husbands their meat and dairy foods?
Slaughters livestock for the sup's shelves?
Cans their products?
Washes and packs their fruit, salads and vegetables?
Manufactures their consumer durables?
Manufactures the 'own brands'?
Processes their processed foods?
Packs their goods?
Loads their lorries?
Staffs their warehouses?
Staffs their offices?
Drives their HGVs and delivers produce to their stores
Runs their accounts and pays their suppliers

Thousands of super efficient SMEs, that's who. That's why I said in my first posting that the giants are not supermarkets.


Few are aware of the reality of the depth of the relationship between SMEs and the supermarkets.

SUPERMARKETS ARE OPERATIONALLY DEPENDENT ON SME's, who's efficiency, flexibility, specialist expertise and exemplary cost control they can never match. It is super efficient SMEs which underpin the supermarket's success and which are the primary factor securing cheap prices for the consumer.

The level of this dependency on SMEs has become so pronounced in recent years that it frightens the daylights out of the supermarkets. In response, and in their quest for ever greater profits, the supermarkets require a level of, highly damaging, control of SMEs which is akin to taking over SMEs' businesses and running them on the, less successful, supermarket model. And that's one of the major reasons why so many SME's and their SME supply chains are struggling.

The other irony is that, without the business of the most maligned SMEs of all, the SMALL SHOPS sneered at by the giants, to offset the punitive margins demanded by the supermarkets, few of the supermarket's SME suppliers could continue trading.

So, if the supermarkets do finish off small shops and many other SMEs by 2015 as predicted, they will be cutting their own throats - and with them, yours, the consumers'

Auntie Flo'

Newmania said...

I read all that with huge interest Flo , if the past is anyhting to go by I will be quoting most of it as my own later. Thanks , fascinating stuff

Ed said...

Why are so many SME's going bust under nulab?

Over-regulation is obviously a major factor.

You think that regulating the supermarkets more to compensate?

As Andrew Boff says if we are not for liberty we are for nothing.

Anonymous said...

Ed said:

You think that [we should be?] regulating the supermarkets more to compensate?

The crux of the problem with the supermarkets is that they have far too much commercial and political power - and this has made some of them very ruthless indeed.

Over-regulation is a topic in itself which I hope newmania will look at sometime, however, in the meantime, let me tell you what happened to a hard working SME owner friend of mine - not me, than God.

My friend supplies one of the big four supermarkets. The contract initially turned over about £200 a week at a 20% gross profit margin. I would imagine that netted down to about £10-20 a week pre tax profit after overheads. The sup paid very promptly at that stage.

The sup encouraged my friend to increase production until eventually the contract was turning over about £10,000 a week.

Even if he hadn't been seduced by the size of the contract offered, my friend would have been hard pressed to find enough business elsewhere as the supermarkets now tend to monopolise demand in the sort of merchandise he supplies.

My friend had to focus most of his production on supplying the large volume of very high quality goods and constantly changing specifications required. He took on extra staff and machinery to do the work and lost a number of contracts he'd had for years. But the sup assured him that there would be long term work for him at a reasonable rate of return.

However, then the sup's payments began to slow down until there was a backlog of £200,000 outstanding, which gave my friend dire cash flow problems.

The response of the sup to my friend's approach for payment was to slap a new contract on him. This put an agent company between the sup and my friend's SME.

The new contract halved my friend's profit margin to an unsustainable level and gave the sup and their agent the RIGHT TO DELAY OR WITHHOLD PAYMENTS FOR AS LONG AS IT SUITED THEM. When my friend objected, he was told, tough, that's the way it is.

With £200,000 owed, my friend felt in no position to argue.

The agent later notified my friend that there'd been a paperwork error - the agent's or sup's error, not my friend's. This had resulted in a duplicated order and 'unfortunately' my friend could not be paid for thousands of pounds worth of goods supplied under a written purchase order.

The losses involved mean my friend will make ALMOST NO PROFIT ON THE CONTRACT FOR ALMOST A YEAR'S SWEATED LABOUR. My friend demanded full payment but the agent simply deducted the sum from my friend's next remittance.

Now my friend has lost so much other business for this contract that he has to continue supplying the customer just to keep turnover coming in.

My friend says he's been lured into a contractual trap by people who are no better than crooks. Yet the supermarket concerned is a well respected household name.

It's not a question of regulation, Ed, there already are regulations and the County Courts to protect SMEs against this form of destructive ruthlessness by monopolistic supermarkets. The problem is that the SMEs cannot afford to - and don't dare to - take on these giants.

The only answer lies in controlling the monopolistic growth of these companies because that's what makes them so all powerful.

Auntie Flo'

Anonymous said...

The precarious existence of the thousands in Britain's underclass

An investigation by the Guardian's Felicity Lawrence into UK's underworld economy January 10, 2005

"One of the leading companies involved in food production in Sussex is Natures Way Foods. It washes and packs over 14bn salad leaves a year for British consumers.

Set up in 1994 at the suggestion of Tesco to supply all its branches with salad, it depends on migrant labour. It employs many of its local and foreign workers direct but it and its sister companies have also used a succession of agencies or gangmasters over the years.

The Natures Way website boasts of the "phenomenal growth" the company has achieved with backing from Tesco: "Our first four years were so successful... our business doubled in size every year ... In December 1999 we were placed 29th in the Fast Track 100 of the country's fastest growing companies.

Natures Way has invested in the latest technology and logistics to respond to the new business model of "just-in-time" ordering developed by its customers, the supermarkets and fast food chains. The technique, where nothing is kept in stock, is used in many sectors and has helped drive prices down and keep inflation low. It has also enabled British companies to compete in an age of globalisation with other countries where labour rights are rudimentary.

As a supplier to the supermarkets Natures Way has to cope with huge and often last-minute fluctuations in orders. This reduces the retailers' risk of under- or over-supply to a minimum by transferring it down the line.

To help it respond to constantly changing demand, Natures Way, in addition to its substantial directly employed workforce, has relied upon a flexible workforce, with migrants prepared to work long and unpredictable hours and gangmasters able to move them around the country at short notice.

It says it "strives to achieve the highest standards in staff recruitment and employment practices and would never knowingly use illegal labour".

Its current gangmasters similarly say that they work closely with immigration, tax and other authorities to make sure that their employment practices comply with the law.

But despite these safeguards, it did not take long in Selsey to meet migrant workers doing shifts at Natures Way who admit working without proper papers through gangmasters, and who also claim to be victims of some form of abuse. Migrants working here with legitimate visas or EU rights also claim to be victims of abusive employment at the hands of gangmasters.

Georgi was among a group of Bulgarian workers interviewed by the Guardian who were being supplied to Natures Way by one of its principal gangmasters, Advance Recruitment. They had arrived on business visas for the skilled self-employed but were packing salad for Tesco.

Skilled self-employed business visas were the subject of a scandal earlier this year when a British diplomat blew the whistle on scams in Bulgaria and Romania, which famously included a one-legged Romanian obtaining a visa as a self-employed roofer"

Anonymous said...

Guardian investigation (continued)

Georgi said he had arranged work before arriving in the UK..."

Because of my problems with a visa, Advance paid me very low wages, £200 for 72 hours," he said. That amounts to £2.77 an hour when the minimum wage at the time was £4.50.

Georgi said he had been working these long hours each week for over four months on the salad production lines:

"The worst is I am never sure that I'm going to get paid. It happens to a lot of people." He also said he paid no tax or insurance but had £48 weekly rent deducted from his wages for a bed in a maisonette he shared in Selsey with six other men.

He said he was afraid to talk about his circumstances. He had handed over the equivalent of nearly £1,000 to a Bulgarian agency in Sofia to fix his visa.

Advance Recruitment is registered as Advance Employment Services, and its managing director in Sussex is a Russian ex-military officer called Anatoly Bespaly. He said that he supplied the Natures Way operation in Selsey with an average of 150 workers, drawn from 19 nationalities including Chinese, Russians, Poles, Portuguese, Bulgarians, Iraqis and Afghans.

The Guardian has seen the wage slips of several Chinese workers from Advance Recruitment showing false names and false national insurance numbers, for work at Natures Way. Some workers were using photocopied work permits bought for £50. They said they were frightened to make any complaint and alleged that Mr Bespaly's organisation used harsh methods to keep workers in order.

Both Chinese workers and the Bulgarian said that they had heard of other workers being beaten by Mr Bespaly's bodyguards when they complained about their wages not being paid in full.

"Anatoly made deductions from wages. Sometimes people refused to take it. On one occasion, an Iraqi worker got very upset and started to argue with Anatoly. Anatoly got four or five Russian men to beat him up," one Chinese worker said.

Others described hearing of similar incidents with Brazilian and Afghan workers. They had not been beaten themselves, but - whether their fears were justified or not - they were still afraid that the same thing might happen to them, and said Mr Bespaly's managers frequently used threatening language.

A house of seven Chinese workers said they were evicted without notice last year, told they could no longer work and were forced to leave the area.

Newmania said...

You think that regulating the supermarkets more to compensate?

Ed - Large companies love regulation because it is copiable and they can afford the sytems with huge economies of scale as compeared to small rivals . This keeps entrants out of the market. THis keffect os certainly teu anmd god knows I have suffered from it

Anonymous said...

Guardian investigation, the supermarket's response:

Tesco said it was surprised by the allegations since a recent independent audit of Natures Way had not highlighted any of the issues raised.

"We take our responsibilities in this area very seriously and while we don't pretend to get things right every time we always act swiftly if any issues are identified," the company said.

It denied that supermarket ordering practices had led to poor practice and said that it had worked to raise standards, including labour standards, in the industry.

McDonald's said it too expected suppliers to comply with clear codes of practice on labour and conducted independent audits on their performance but would investigate the Guardian's findings.

Sainsbury's said it was very concerned to hear of the allegations and had launched an immediate investigation. An independent audit of the suppliers highlighted had already been arranged.

Anonymous said...

Thankfully, few SMEs behave like the those exposed by the Guardian investigation.

My company, like millions of others, jumps through hoops to comply with the government's constant stream of - continually revised, badly drafted, irrational and contradictory - requirements under the Asylum and Immigration/prevention of illegal working legislation.

How contadictory has the legislation been?

To parahrase page 3 of Home Office guidance booklet: employers should ensure that ID documents are prescribed documents, genuine and relate to the person presenting them.

To paraphrase page 15 of the same booklet: Employers should be able to rely on National Insurance documents for ID(!)

Given the confusion with which the Home Office has shrouded the law on the prevention of illegal working and the way the supermarkets squeeze blood out of their SME suppliers - and their larger suppliers too, remember the battle of Tesco V Nescafe? - there's obviously a danger that the combined effect will lead to some of the weaker or crooked SMEs breaking the law and employing illegals.

Auntie Flo'

Blog Archive