The way to provide cheap food? Squeeze suppliers

I LISTENED to Sir Terry Leahy on Desert Island Discs last week. He seemed a man I’d like: open, restrained but friendly, a solid, unpretentious citizen, loyal to one wife, one religion, one football team and one company.

That’s the company he first worked for as a teenage shelf-stacker, returning to its junior management team with a degree, building it over the next 30 years into the giant business we know and love as Tesco.

Only a hint of irony there. If so many didn’t love it, would Tesco have so many stores, sell so much and, in spite of recent problems since Sir Terry stood down, make such big profits?

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His great strength, he said on DID, was that coming from a working-class family where at times 50 per cent of their income was needed for food, he knew what shoppers want.

That is cheap food, and Tesco busts a collective gut to provide that in competition with other supermarkets. One way, the main way, to do it is to squeeze food suppliers until their pips squeak.

Sir Terry didn’t say that on DID, or mention buyers: the young thrusters who frighten the life out of, say, potato, tomato, meat and poultry suppliers for three months or so before being moved on in case they get friendly with the natives.

Farmers do say it, but anonymously because of fear of reprisals – the contradiction being that they now rely on the big supermarkets for much of their income.

They accept that to get any kind of share they have to jump through hoops, that standards are stringent, that there is no excuse – ever, for any reason – for late delivery, that the price they get can be slashed arbitrarily, that they can be forced to pay for shelf space or subsidise a two-for-one campaign.

Or, with rare exceptions, see imported foods fill the shelves if it can be bought more cheaply.

Or be dropped peremptorily by a buyer who is himself terrified by a word from headquarters about how he’s comparing with his Asda or Morrison counterpart, has he met today’s target and, if so, here’s tomorrow’s.

Ah well, Sir Terry couldn’t be expected to cover everything in a gentle 45-minute chat that included equally gentle music. But he did point out, fairly, that many of us, certainly in the middle and upper income brackets, now spend only 10 per cent or less of our income on food.

So surely we could afford to spend a little more and give British farmers a fairer slice of the retail cake? If only he’d had time to discuss that. «

Twitter: @FordyceMaxwell