The Tracing Paper

The Co-operative Group has announced today that it’s agreed to buy Somerfield for just short of £1.6 billion, a long way below the £2 to 2.5 billion Somerfield’s owners expected when they put it up for sale in January.

The co-op is different from other retailers. It’s owned by its customers (the 2.5 million who have elected to become members) and has a long commitment to quality, healthy food and to the environment and animal welfare. This is a momentous development in British retail.

The Big Four becomes The Big Five?

The take-over would give the Co-op an 8% share of the grocery retail market, catapulting it into the league of the “Big Four” retailers - Tesco (with 31% of the market), ASDA (16.8%), Sainsbury’s (15.9%) and Morrisons (11.4%). Waitrose would be a distant sixth with 3.9%.

With a focus on smaller convenience, community and rural stores, the Co-op already has more outlets than any other retailer. Somerfield’s 880 stores would give the Co-op over 3,000 in total, even after an inevitable sell-off of 200 or so for local competition reasons.

Providing quality food

From the earliest days of the Rochdale Pioneers, the co-operative movement has been committed to providing its members with pure, unadulterated food.

In the 19th century, adulteration of food with cheaper bulk substances was widespread. Alum and chalk were often added to flour, while loaves were bulked out with pipe clay and sawdust. Other adulterants were intended to improve flavour cheaply but were often toxic, such as the bitter mixtures containing strychnine added to beer.

Working in the interests of consumers, rather than purely in pursuit of profit, the early co-operative movement sold food its customers could trust and led the way for reforms in food law.

Pioneering ethical trade and animal welfare

More recently, the Co-op has led further improvements in the standards of food and drink, with a strong and clear ethical policy.

In 1995, the Co-op started to label eggs from battery chickens as “Intensively produced”, despite such honest labelling being strictly illegal. The law was changed, all eggs are now more transparently labelled and the move towards wider use of free range eggs continues. (Hellman’s are currently running and advertising campaign to promote their recent move to free range eggs.)

The Co-op has also been ahead of the pack on ethical trade, switching all its own-brand block chocolate, then its coffee and now tea, to Fairtrade. Besides the widest Fairtrade range of any retailer, the Co-op’s Sound Sourcing Code of Conduct supports reasonable working conditions, living wages, no child labour and trades union membership.

Led by its members

Of course, the Co-op is not a perfect retailer and has plenty of room for further improvements in the quality and sustainability of its food. Most importantly, though, the Co-op is owned and led by its members. The acquisition of Somerfield will widen the opportunity to have real ownership of the food we eat.

Inside a Fresh and Easy Store (photo Fresh and Easy)

The Guardian reports that Barack Obama has written to Sir Terry Leahy, Chief Executive of Tesco, to urge him to engage with the US trade union representing workers at Tesco’s new US venture, Fresh and Easy.

Without union engagement, the union claims that Fresh and Easy’s workers are stuck with no written contract of employment and working conditions that compare unfavourably with Tesco’s employees in Britain.

“Talk to us!”

The possible future US president’s intervention is a success for the United Food and Commercial Workers (UFCW) union, which has been campaigning to encourage Tesco to talk to them. Despite Tesco’s strong relationship and partnership with USDAW, the British union representing 85,000 of its workers, they’ve so far reportedly refused all invitations to engage with UFCW.

Global standards or double standards?

Tesco assert that their workers are free to join the union and that they’ve “engaged with community leaders”, but it’s a far cry from their partnership with USDAW in Britain. Elsewhere, the trades union movement has raised questions about labour relations in some of Tesco’s other oversees operations, such as Tesco Lotus in Thailand.

UFCW has dubbed Tesco the “Wal-Mart of Britain”. It’s a confusing turn of phrase, as another British supermarket, Asda, is actually owned by Wal-Mart. And while Wal-Mart’s attitude towards unions is notoriously uncooperative (except in China), Asda, like Tesco, has a rather good relationship with British unions.

The different approaches taken by companies around the globe demonstrate the importance of labour laws and established workers’ rights. Britain is no longer a cushy environment for trades unions and their workers, but it’s a lot more comfortable than America and other countries.

Easy facts?

UFCW has teemed up with “grocery workers, food industry professionals” to create freshandeasyfacts.com, also known as freshandqueasy.com, to publicise their campaign against Tesco. Don’t bother trying these links to the Fresh and Easy Facts homepage from the UK. It’s blocked to UK-based browsers, presumably for legal reasons. Continue Reading »

Not a supermarket

Early reporting on today’s long awaited publication of the provisional findings of the Competition Commission’s 17-month (and counting) investigation into the groceries market gave the impression that the Commission (CC) had given the major mulitiple retailers a clean bill. “Competition inquiry to reprieve supermarkets” pronounced the FT.

There is real criticism of supermarket practices in the CC’s provisional findings, with suggested remedies that might just tackle some of the problems. But the CC also suggests changes to the planning system which would be nothing less than a bonanza for the larger retailers and spell further disaster for town centres and the small independent operators.

Uncompetitive Features

Read the report and you’ll find the CC stating clearly that “there is an adverse effect on competition”, identifying a number of uncompetitive “features” (a sanitised expression for damaging practices) of the market:

• “A significant number of local markets have high levels of concentration, and these high levels of concentration have persisted over a number of years”
  ie there are “Tesco Towns” (and Sainsbury suburbs etc) whose inhabitants suffer from a lack of choice of food shops
• “The control of land in highly-concentrated local markets by incumbent retailers acts as a barrier to entry”
  ie the supermarkets are in possession of landbanks that restrict the development of competing stores
• “the exercise of buyer power [...] through the adoption of supply chain practices that transfer excessive risks and unexpected costs to [...] suppliers [...] prevents, restricts or distorts competition”

ie the supermarkets do treat some of their suppliers unfairly

These are strong criticisms and bear out accusations that the supermarkets have repeatedly denied. Continue Reading »

Check prices now

Check today’s price of milk in Tesco / Asda / Sainsburys / Waitrose - Ocado with mySupermarket.co.uk

The Rising Price of Milk

Two weeks ago, Tesco was widely praised in the media for announcing two initiatives: To increase the price UK dairy farmers receive for milk, while not raising the price of standard milk to consumers; and to introduce a higher priced “localchoice” milk from smaller local producers.

But yesterday’s Guardian attributed the surprise rise in UK inflation, at least in part, to the rising price of milk.

Have consumers already swallowed the price rise that will pay for desperately needed higher returns to farmers, while the supermarkets take all the credit?

And Tesco’s PR department must be delighted with all the publicity for something that other supermarkets are already doing. ASDA, Sainsbury’s, M&S and Waitrose already have direct or close relationships with farmers supplying their milk, while the East of England Co-op is just one example of a retailer selling milk from specific local farms at reasonable prices.

So what is the price of milk?

Continue Reading »

Philip Pullman once wrote that books are not eggs, his point being that every book is different whereas we expect every egg we buy to be the same. Agreed, books should not be treated as a commodity, but nor should eggs. Every egg is an individual creation, laid by a hen of some particular variety, fed and kept in a particular way, in a particular location.

I was reminded of this comparison of books and eggs, and the telling assumptions implicit, on a recent rare visit to my local Tesco (looking at the labelling of their meat, on which more later). Many of the packs of meat carried photos of genial looking farmers surrounded by apparently happy animals in beautiful countryside. All very well, and I’m sure these pictured farmers are doing an excellent job, tending their livestock and the countryside, and producing good food.

But how much of Tesco’s meat comes from these pictured farmers? This is an illusion of provenance. Returning to the comparison with books, it’s rather as though a bookshop sold all its books under Jane Austen’s name, simply because she wrote some of them. We deserve to be told more about how our food’s produced and where it’s from.

Continue Reading »

Andrew Simms, policy director of the New Economics Foundation, yesterday compared the big retailers to invasive species like the Nile Perch and Japanese knotweed. Honey fungus (Armillaria mellea and related species) also springs to mind, its superficially attractive fruiting bodies sprouting up prolifically while insidiously killing off surrounding plants.

Over the last few decades, the rise of the major multiple retailers and the increasing share of the grocery market taken by supermarkets has dramatically altered our townscapes.

Continue Reading »