Sainsbury’s has strongly denied any suggestion that farmers and processors will bear the brunt of planned 10 per cent price cuts resulting from its merger with Asda.
The retailer responded to concerns as the Environment, Food and Rural Affairs Select Committee planned to launch an inquiry into the deal.
Chairman of the committee Neil Parish said he was ‘very concerned’ because the MPs had been told during a private evidence session that the price cuts would be ‘largely paid for by suppliers’.
“The Government talks about farming becoming more efficient and more productive, but so should the retailers”, he added.
“You have got retailers like Lidl and Aldi, who actually pay a good price to the farmer but also give a good price to the consumer. Is it not right for the supermarket chains to be more competitive, not just farmers?”
Sainsbury’s, however, told Farmers Guardian the price reductions would come from harmonisation of buying terms which are already being offered by suppliers to one of the two businesses.
“This is a great opportunity for suppliers as they will be able to make their supply chains more streamlined, develop differentiated product ranges and grow their businesses as we grow ours”, a spokesman added.
“A more resilient business with lower prices and increased sales will also result in higher volumes for suppliers.”