Select Committee on Environment, Food and Rural Affairs Minutes of Evidence

Examination of Witnesses (Questions 518-519)




  518. Just for the record, we have Katharine Walters, Government Relations Manager of the Co-operative Group; Simon Hughes, Fresh Meat Buyer, Netto Foodstores Limited; and Kevin Hawkins, Communications Director, Safeway Stores plc. Thank you for coming here today and for any information you have given us in advance. We are doing an inquiry into basically the future of farming so really the heart of this inquiry is to try to find out what is happening in your world and the consumers you are dealing with and to find out how those messages get back so that the farmers can kept abreast of those modern trends. So all the time if we can focus our questions and you can focus your answers on how we get through that line of communications. Could I begin by asking you first the question I just asked your predecessors: if the pound were, for the sake of argument, ten per cent weaker against the euro, what impact would that have on the procurement policies you have and the ability of farmers in Britain to secure more of their produce through your stores and earn a livelihood from that? How great a weight is that exchange factor?

   (Ms Walters) I think, as the colleagues before said, relationships between retailers and suppliers, including farmers are long-term relationships. They are based on trust and based on knowing each other for a long time. They are not simple, day-to-day contractual relationships. And so whilst price is a key element, I do not think that immediate short-term fluctuation in terms of currency would make us change those relationships. Clearly long-term economic cycles would have some bearing and price for retailers has to be an element, and so if imports became substantially cheaper I think we would see us bringing in some imports, with the usual caveat that we do seek to buy British products.

  519. I will ask each of you the question, without telling us what it is, is there a specific line, for example a commodity-based product, which is so price sensitive that changes in that exchange rate would be likely to cause a change of direction for procurement?

  (Ms Walters) Not having a background in procurement I would be unable to say that at this stage.

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