11 May 2006

ActionAid today vowed to step up its campaign for a wide-ranging inquiry on British supermarkets' exploitation of small producers and suppliers in poor countries after the agency won a partial victory through the decision by the Office of Fair Trading to investigate the £95bn-a-year supermarket industry, including the big chains Tesco, Asda, Sainsbury's and Morrisons.

ActionAid says the OFT's report gives the Competition Commission a marked steer to probe the impact of the supermarkets' huge buying power on their suppliers.

Now the agency will maintain pressure for the commission to address its concerns.

ActionAid had told the OFT that the supermarket giants engaged in unethical trading practices with suppliers in developing countries, including violations of the Supermarket Code.

This showed weaknesses in the code, introduced in 2002 after the commission found retailers bullied farmers and other suppliers.

The effects of these practices meant farm workers faced poverty wages, longer working hours and poor health and safety conditions, as well as low prices and insecure contracts for small farmers.

The OFT report acknowledged ActionAid's points that the code should apply to overseas suppliers and extend to farmers and growers.

ActionAid policy officer Dominic Eagleton said: "The market inquiry must look into the supermarkets’ dealings with producers in developing countries. British retailers’ unrelenting pressure on suppliers for faster, cheaper and more flexible production is leading to extreme hardship for the farmers and workers who produce goods for supermarket shelves. We believe including suppliers in the investigation will highlight the need to strengthen the code."