Supermarket to charge suppliers to promote products

The National Farmers' Union is reporting the supermarket chain Safeway to the Competition Commission over plans to charge suppliers for in-store promotions.

The National Farmers' Union is reporting the supermarket chain Safeway to the Competition Commission over plans to charge suppliers for in-store promotions.

The retailing giant has asked some of its growers and suppliers to pay £20,000 in return for extra promotion of their products.

The NFU complained that the move was unacceptable and was putting smaller producers, many already strapped for cash, at a disadvantage.

The supermarket giant has written to 300 of its suppliers promising a 15% increase in sales for those promising to donate £20,000 for each product line.

In return for the money the suppliers, which range from multinational firms to small fruit growers, are assured that their products will be promoted and valuable shelf space guaranteed.

But the NFU described the offer as "totally unacceptable and morally wrong" to expect producers to help meet such costs.

Helen Lo, head of the union's food and marketing department, said: "We would assume that ensuring the shelves at Safeway are kept well-stocked would be a fundamental requirement of any store."

The NFU warned that smaller growers will feel under intense pressure to contribute, fearing "commercial reprisals" if they fail to donate.

The union's director general Richard Macdonald said: "This extra payment is being suggested at a time of severe hardship within the industry. We believe Safeway must withdraw this request."

He added that the union was also writing to agriculture minister Nick Brown and Trade and Industry Secretary Stephen Byers in protest.

The supermarket chain said it believed its initiative will satisfy customer needs which, in turn, will benefit suppliers.

Safeway also insisted that it would be happy to answer any questions from the Competition Commission, which is already investigating supermarket practices.