Blair's backing for farmers

TONY Blair has joined the debate on the growing power of supermarkets giants, describing their hold over farmers as an 'armlock'. The timing of the Prime Minister's intervention is significant.

The Office of Fair Trading is expected soon to publish a long-awaited report into a widely discredited code of conduct that governs relationships between big food retailers and their suppliers. And it will add to the political pressure being piled on supermarkets to stop their bully-boy tactics.

Last month, Blair's Cabinet colleague, Environment Secretary Margaret Beckett, warned them not to squeeze their suppliers 'to the point of elimination'.

Blair's admission follows claims by accountancy group Grant Thornton that the code 'had no impact whatsoever' on how business between the major multiples and their suppliers was conducted.

'In respect of the supermarkets...I think they've still got an armlock,' Blair said. 'There is a code of practice that we have put in place and we need to look and think carefully at whether there's something more we can do to make sure that it's actually abided by, because I know there are farmers who believe that the code is being flouted.'

Kevin Hawkins, director-general of the British Retail Consortium, which represents the major supermarkets, reacted angrily to Blair's claims. 'It's not very helpful for the Prime Minister to use that phrase,' he told Financial Mail on Sunday. 'A lot of emotion is generated on these issues, but the reality is there is no magic formula.'

Duncan Swift, head of food and agribusiness recovery at Grant Thornton, said radical reform of the 'ineffective' code was needed: 'The current code does not stipulate the minimum required contract terms. Too much remains unwritten. It is weak, vague and badly worded.'