Fair dealing and regulation

Over 90% of the UK's food retail market is controlled by just 9 supermarkets. This highly centralised system has led to power imbalance and the erosion of negotiation, with farmers forced to be price takers.

That is driving other challenges in the sector, mainly the economic viability of farm businesses. For example, 50% of farm income is from government support payments, and farmers often receive less than 1% of the profit made in the supermarket.

Farming is a high cost, low margin sector. Not by choice of farmers, but by the designed of a broken food system. This puts our food supply in jeopardy and at the whim of economic, environmental, and geopolitical shocks.

Sustain is advocating for:

• A stronger regulatory framework and enforcement of fairness rules on supermarkets and large supply chain intermediaries.
• A programme of policy to support the growth of better and fairer routes to market for SME farmers and producers.

Super Market Failure - this work exposed the failings of supermarkets on worker wages, pay disparity, and unfair trading practices.

Unpicking Food Prices - this research found that farmers often receive less than 1% of the profit made in the supermarket, and highlighted how economic unequal the supply chain is.

Groceries Code Action Network - we coordinate this group of stakeholders who want to see better and proprotionate fairness regulation of the supermarket chain.

Sustain helped to secure the fair dealing clause in the Agriculture Act 2020 which should lead to a new Statutory Codes of Practice for all sectors, enforced by a new body (or a extension to GCA powers), and with powers to fine for non-compliance with the codes. We will continue to presure Defra to implement this.

For more information on the work of the Groceries Code Action Network, contact Will White, Sustain: will@sustainweb.org. And join the mailing list for regular updates.

Further information

We are concerned with futher consolidation of food retail and the lack of market opportunities for farmers and growers. See our response to the proposed Asda Sainsburys merger announced in 2018.

Brexit has proved to be challenging for farmers and small food businesses supplying UK manufacturers and retailers, who have had to grapple with additional uncertainties and business risks.

Find out more about the Groceries Code Adjudicator and our recommendations for improvements to support sustainable farming, in the UK and overseas:

• Discussion paper: A plausible model of operating for an extended GCA

• Briefing paper: Ten frequently asked questions about the case for extending the GCA to protect farmers