The retailers have said that grocery prices will fall in both chains as a result of the proposed merger. This raises concerns that a drop in price could lead to increased pressure on farmers.
The NFU are questioning whether the retailers can deliver a 10% saving for shoppers without passing on that pressure to farmers and have voiced their concerns to the Competition and Markets Authority last week.
Careful consideration does need to be given to the impact of squeezing margins and how that could take away the ability of the food and farming industry to invest and improve quality, range and sustainability.
“The consolidation of retail buying power is one of the biggest concerns farmers and growers have about the proposed merger. “As the foundation of the UK’s largest manufacturing sector, food and drink, there are serious fears that farm businesses will be the ones to take any additional price pressure. At a time when farms are already facing intense price pressure, the prospect of a further squeeze on price leaves farmers concerned about the potential impacts on their businesses."