Move for farmers' fair deal

SUPERMARKETS reacted warily yesterday to a government announcement that a new food industry group would consider a code of conduct for retailers to guarantee farmers a fair return when dealing with big stores.

Nick Brown, the Minister of Agriculture, said at the National Farmers' Union (NFU) annual conference at the Hilton Hotel in London that a situation where farmers and growers were selling their produce at prices that did not cover their costs was "not sustainable".

Mr Brown said the forum, made up of food experts, supermarkets, farmers and distributors, was a means of tackling tensions and problems affecting "the food chain". The group will include a senior member of the Ministry of Agriculture, the NFU, the Food and Drink Federation, the Britain Retail Consortium and the Institute of Grocery Distribution.

But Asda's chief executive, Allan Leighton, warned: "We don't need a code of conduct. The code that exists within businesses is one of common sense, and if that was changed it would sound failure for us all."

A spokesman for the Tesco chain welcomed the new group, but added: "We would have to be very careful with any attempt to rig the price in a free market."