More retail pressure

[The Agrarian]

Tesco demands supplier price cuts in discount battle

Britain’s biggest supermarket has reportedly given suppliers until 10 July to agree price cuts.

www.bbc.co.uk

Can only be bad news for us.

 

[teslacoils]

I'd rather lick my own sweaty nutsack than shop in Tesco.

 

[kiwi pom]

The problem is there's too many milk buyers and processors out there, all cutting each others throats to supply. If there was only two or three with reasonable volume, they could dictate to the supermarkets.
Would farmers all work together to supply a few buyers though?

 

[Lowland1]

The problem is people don't pay a fair price for their food. Governments use the supermarkets to keep food prices down therefore the consumers have spare cash to spend on other things thus keeping the economy rolling. With Corona all bets are off there is liable to be widespread unemployment so people are going to be short of money so there is going to be downward pressure on prices and as Tax revenues decline Governments are less likely to be interested in supporting agriculture. Things are not looking good.

 

[Bald Rick]

Tesco demands supplier price cuts in discount battle

Britain’s biggest supermarket has reportedly given suppliers until 10 July to agree price cuts.

www.bbc.co.uk

Can only be bad news for us.

But ... but .. but .. they are the true heroes of the Covid crisis.

And of course the public don't give a ruck so long as they can fly on holiday and go to the pub .

Why do we bother?

 

[jondear]

Well every little helps ! THEM!
They feel very powerful Wright now !

 

[Beef farmer]

But ... but .. but .. they are the true heroes of the Covid crisis.

And of course the public don't give a ruck so long as they can fly on holiday and go to the pub .

Why do we bother?

You've hit the nail.
People dont care.
Take out the 1% vegans then the 9% who want organics
The last 90% want a shopping cart full off grub that sustains life with little regard to actual taste as cheap as possible.
Then they can buy a new fridge freezer that makes ice cubes. ??

 

[GeorgeK]

You have to love the marketing spin.
Tesco to suppliers "Cut your prices, you have until the 10 July to agree"
Tesco to the press "We have been speaking to suppliers about how we can work together to continue giving our customers great value."
Are Tesco aware there's a difference between 'working together' and 'demanding'?

 

[fgc325j]

The problem is there's too many milk buyers and processors out there, all cutting each others throats to supply. If there was only two or three with reasonable volume, they could dictate to the supermarkets.
Would farmers all work together to supply a few buyers though?

More than likely the milk buyers would "gang up" to agree on what should be a "fair price" to pay for milk.
Look at the live beef trade, compared with 20 years ago there are only a few buyers at the rings, and they are
not going to cut each others throats.

 

[melted welly]

Tesco losing market share to Aldi and Lidl. COVID is the smokescreen they’ll use to hammer their suppliers in order to try and regain it. That’s what’s happening here.

Aldi and Lidl got leaner business models than Tesco, with all its arms and legs and smartarse sharp marketing practice, it must be a logistical nightmare to keep on top of.

the simpler, leaner models of Aldi and Lidl are why a shop there is cheaper. The term “discounters” irks me too, they’re providing a better, more efficient service than the big boys who are falling over themselves to pander to the high maintenance middle class.

 

[organicguy]

The problem with a low price food culture is that every one in the supply change suffers for it.
Everyone in the supply change has to be on the minimum wage, from the abattoir, the picker, the packer, the haulier and of course the farmer ,if he's lucky.
And I bet half the people who go to the food banks are probably in the food industry!

 

[dinderleat]

Tesco losing market share to Aldi and Lidl. COVID is the smokescreen they’ll use to hammer their suppliers in order to try and regain it. That’s what’s happening here.

Aldi and Lidl got leaner business models than Tesco, with all its arms and legs and smartarse sharp marketing practice, it must be a logistical nightmare to keep on top of.

the simpler, leaner models of Aldi and Lidl are why a shop there is cheaper. The term “discounters” irks me too, they’re providing a better, more efficient service than the big boys who are falling over themselves to pander to the high maintenance middle class.

Hit the nail on the head. Plus Aldi and Lidl are supposedly a lot better to deal with than Tesco so may not Necessarily Pay their suppliers less than Tesco.

 

[Sid]

Pull the plug.
Put the milk into cheese, powder anything that will store, the capacity is there atm as not at peak.
Make them short of product, people will just shop elsewhere.

 

[melted welly]

Hit the nail on the head. Plus Aldi and Lidl are supposedly a lot better to deal with than Tesco so may not Necessarily Pay their suppliers less than Tesco.

There’s a lot of shite involved with (not just) Tesco, constant wriggling on price, unannounced audits, ever tightening pointless aesthetic standards, 2 for 1s, “supplier contribution” or whatever it was called......

Or how about producer buys unique packaging for new season, purchase/marketing dept then run promo requiring different packaging, original packaging now obsolete and supplier out of pocket.

Not shopped in Tesco for near 15yrs ?

 

[dinderleat]

There’s a lot of shite involved with (not just) Tesco, constant wriggling on price, unannounced audits, ever tightening pointless aesthetic standards, 2 for 1s, “supplier contribution” or whatever it was called......

Or how about producer buys unique packaging for new season, purchase/marketing dept then run promo requiring different packaging, original packaging now obsolete and supplier out of pocket.

Not shopped in Tesco for near 15yrs ?

It’s amazing what you get in Aldi for £100 it’s hell of a shop

 

[pappuller]

Pull the plug.
Put the milk into cheese, powder anything that will store, the capacity is there atm as not at peak.
Make them short of product, people will just shop elsewhere.

But how long do you store it for ? no use having a store full of cheese if your returning a pish poor price.

 

[Barleycorn]

Shame we haven't got a Milk Marketing Board!!

 

[upnortheast]

Hit the nail on the head. Plus Aldi and Lidl are supposedly a lot better to deal with than Tesco so may not Necessarily Pay their suppliers less than Tesco.

Aye, there is the story of the carrot packer who had the snotty lady from Tesco turn up in his yard one day.
"Aldi are selling carrots cheaper than we are, what are you going to do about it" she says
Absolutly nothing he say.
But if you want to keep suppliying us you will have to sort it.
At this point he shows her the invoices.
Aldi were paying more for the carrots than Tesco Also paying him quicker.
Been a Tesco in our local town for over 10 years. I refuse go through their door barstewards !

 

[Sid]

But how long do you store it for ? no use having a store full of cheese if your returning a pish poor price.

No good selling it to the supermarkets as liquid for a pish poor price either!

A certain buyer wanted to drop the price it paid for organic milk, no was the reply, well we are paying x, you wont get the milk, we will see.
They didn't get the milk, the milk was shipped elsewhere, and they shouted and were short of product and guess what, paid the price.

We should be sellers of our products not suppliers!

 

[Farmer1001]

The problem is there's too many milk buyers and processors out there, all cutting each others throats to supply. If there was only two or three with reasonable volume, they could dictate to the supermarkets.

Without knowing it, I think you have pointed out the real issue here, think about what you wrote “too many buyers and processors out there” so why is FG price so low if so many buyers for the milk? And “cutting each other’s throats to supply (supermarkets)” so why aren’t many of them going bust? Biased milk contracts weighting the power with the buyer allows all losses and risks to be pushed down the line.