Unfair supply chain: UK Government’s complacency will result in job losses

Scotland’s only voice on the European Parliament’s Agriculture Committee, Alyn Smith MEP, has condemned the UK Government’s lack of a response to the developing crisis in the farming supply chain.

Alyn has been appointed the shadow rapporteur for a report entitled “Tackling unfair trading practices in the business-to-business food supply chain” which is likely to call for legal action at EU level.

The department of Business Innovation and Skills (BIS) has written to Alyn emphasising that although they agree with him that “real cultural change” is required they will not be opening a formal enquiry into the issue.

Alyn said:

“The official response to this on-going crisis has been woefully inadequate and we are fast approaching the point of no return.

“The warnings of major groups such as the Federation of Small Businesses and the Institute of Directors are simply being ignored. These warnings are not unsubstantiated, and the recent analysis by Begbies Traynor showing that the number of smaller food suppliers at risk of bankruptcy has risen by 58% illustrates the chilling scale of this problem.

“I will be highlighting these issues for the forthcoming EU unfair trading practices report. Mairead McGuinness, the MEP leading the report said in committee “the UK is an example of what not to do, some of the worst examples of abuse are coming from the UK” and it is difficult to disagree.

“BIS is not addressing this. The response I have received does not go far enough to protect small Scottish firms. It contains many nice sentiments and acknowledges the need for radical change but does not say they will launch an inquiry, or give the Groceries Code Adjudicator (GCA) actual power.

“These must happen now. The UK Government’s consultation relating to late payments illustrates the problem. We are clearly beyond a point where consultations are useful; what we need is legislation to solve this problem.

“It is worth remembering that the GCA is run by Christina Tacon who is only employed three days a week and cannot launch pro-active investigations. The comments David Cameron made yesterday on making sure the GCA has powers are undoubtedly welcome, but they are too little, too vague and frankly too late.

“Christina Tacon’s hands are still tied. The Environment, Food and Rural Affairs Committee report is simply the latest illustration in an going saga.

“As I have said before the Tesco saga is ‘the tip of the iceberg’ here. We need a GCA that can actually defend suppliers, not one that is equipped to simply watch as the market fails around us.”

Further Information

Alyn’s letter to and from then Department of Business Innovation and Skills: letter and the BIS reply

The House of Commons Environment, Food and Rural Affairs Committee report on dairy farming which was published earlier this week that condemned the Groceries Code Adjudicator for being unable to launch address pro-active investigations or address complaints from indirect suppliers. This can be found here.

Begbies Traynor released a warning a week ago that the number of firms at risk of bankruptcy has risen by 58% to 4,552. This can be found here.

In December the Institute of Directors published a survey which found that nearly two thirds of all SMEs had been paid late and can be found here).

The Federation of Small Business Bullying Report that I wrote to the Department of Business Innovation and Skills about can be found here.

Alyn’s previous actions to help tackle problems in the supply chain are outlined here:

UK Government must act to protect small Scottish businesses says Scottish MEP

Spineless Groceries Code Adjudicator fails to help Scottish suppliers

Tesco might be the tip of the iceberg


A video of Alyn's contribution to the debate should display above, if not you can find it on his YouTube channel