Sourcing Suppliers

Small UK suppliers urged to fill the Marmite gap?

Fred Heritage | 14 October 2016 | 8 years ago

marmite
Stocks of popular household products like Marmite have returned to Tesco
A leading small business members? association has encouraged smaller UK suppliers to take advantage of weaker exchange rates hitting stores like Tesco.

The Forum of Private Business (FPB), which represents more than 18, 000 small firms, urged its members to seize the opportunity to become supermarkets? preferred British-based suppliers as relations with larger multinational suppliers break down.

Ian Cass, managing director at the FPB, said in a statement: For too long major retail outlets have squeezed small suppliers both on terms and price, in favour of multinational suppliers like Unilever.

the impact of that strategy is now starting to bite and we are calling on large UK retailers to open their delivery doors to small UK producers once again, on transparent terms and prompt payment.

The call to action follows a dispute between Tesco and major supplier Unilever, after the supermarket refused to bare the cost of price rises for a range of popular household brands including Marmite and Ben & Jerry’s ice cream.

One of the nation’s largest food and household goods suppliers, Unilever’s prices rose by as much as 10 per cent for some products, with the company blaming the pound’s fall in value against the euro and dollar since the Brexit vote on 23 June.

As of 13 October, the dispute appeared to have been resolved, with both Tesco and Unilever agreeing terms to share the cost of price rises without passing it on to shoppers.

However, retail sector analysts have warned of further price hikes that could have a greater impact on consumers. Bruno Monteyne, an analyst with Berntein Research, told The Guardian that food prices could rise by as much as 3 per cent over time as the impact of the falling value of the pound is felt.

Shop owners have been advised to hold down prices for customers as much as possible. Head of the British Retail Consortium, Helen Dickinson, said: Years of falling shop prices and higher costs have left limited scope for retailers to continue absorbing this pressure.

everyone in supply chains will need to play their part in maintaining low prices for consumers.”

Why the weak pound sees small firms hit hardest by higher import prices.

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