Friday, December 07, 2007

Dairy Prices

British supermarket Sainsbury's has been fined £26m for dairy price fixing. Chief executive Justin King told the BBC that its price initiatives in 2002 and 2003 "were designed to help British dairy farmers at a time of considerable economic pressure and public debate about whether farmers were getting a fair price for their products". [BBC News December 7th 2007]

But the Office of Fair Trading found no evidence that farmers had benefited. And the National Farmers Union worries that the fines "could take money out of the supply chain". In other words, the supermarkets will wish to pass the costs of this regulation back onto the farmers.

Supermarkets typically claim to represent the interests of consumers or suppliers, but we may have reason to be sceptical of these claims. See earlier post: Wal-de-Mart and the profit eaters.

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