UK supermarkets defend pricing models amid MP grilling

Senior executives at five of the UK’s leading supermarkets defended their pricing models before MPs in the latest inquiry into fairness in the food supply chain.

In the parliamentary session with the Environment, Food and Rural Affairs committee, topics such as the impact of food price inflation on supermarkets and consumers, the relationship between production costs and food prices, and how structural relationships in food producers, manufacturers and retailers could be improved, were discussed.

The panel included Tesco commercial director for fresh food Dom Morrey, Asda chief commercial officer for food Kris Comerford, Waitrose commercial director Charlotte Di Cello, Lidl GB chief commercial officer Richard Bourns, and Sainsbury’s chief food commercial officer Rhian Bartlett.

Morrey said that Tesco has been having “open and transparent” discussions with suppliers. He claimed the past 18 months have been “particularly challenging” with input prices having “spiked” across the retailer’s supply base.

“We’ve responded quickly and appropriately to address them [challenges] and pay the price that’s fair to our supplier partners when they’ve asked for it,” he said.

Di Cello noted that Waitrose will “always pay the cost of production and make sure that farmers are making a decent living,” noting the upmarket retailer’s long-standing supplier relationships, some of which are 40 years old.

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In a previous session, British Apples and Pears executive chair Ali Capper said that supermarkets had delisted producers following requests for cost price increases due to rises in input costs.

In response, Bartlett said that Sainsbury’s has put through cost price increases “ahead of the season to give the certainty to farmers”.

For Lidl, Bourns added: “I don’t recognise the allegation that we delisted certain producers based on inflationary pressure but certainly that’s something we would take extremely seriously.

“We’re absolutely committed to fair and transparent partnership and dealings with all of our suppliers and that’s something we stand behind and would expect.”

A point was also raised regarding the current challenging weather conditions which have impacted the livestock, arable and horticultural sectors and disrupted individual businesses throughout the country.

Last week, UK farming unions called on major retailers to support the industry, asking for measures including flexibility on product specification if produce does not fully conform to the exact description previously agreed.

Bourns said that Lidl is “in complete agreement with the approach”.

“We’ve amended specifications for potatoes, parsnips, carrots, amongst other things in order to enable our producers to maintain that avenue to market,” adding that the discounter will “continue to adopt that strategy going forward”.

Tesco, Sainsbury’s and Waitrose also highlighted their commitment to British produce through recently created dedicated ‘Best of British’ pages on their online websites to help customers shop for locally grown and sourced produce much easier.

Tesco’s Morrey added: “We would be 100% committed that if it is in the UK season and it’s been grown, our first priority is to have everything 100% British sourced”. This sentiment was concurred by all other supermarket executives on the panel.