A FAMILY-RUN potato business has fired the first shot for Scotland's food growers by choosing to end a multi-million-pound contract supplying one of the UK's largest supermarket chains.
The announcement by Taypack Potatoes in Perthshire yesterday that it had cut its £32 million-a-year contract with Asda, Britain's third-largest supermarket group, was met with surprise by insiders. The company, which started up in 1986, supplies Asd
a with 80,000 tonnes of fresh-pack potatoes per year.
Taypack, one of four main potato suppliers in Scotland, is a significant player in the UK fresh potato market, controlling a 9 per cent share of the annual production of 1.5 million tonnes.
It is believed Taypack's misgivings over the contract began some time ago but came to a head recently when Asda, which paid the company around £180 per tonne, demanded more potatoes were supplied, forcing the growers to buy in potatoes at £230-300 a tonne.
Growers also pointed to two fuel rise prices over the past 12 months and a threefold increase in fertiliser, which has not been acknowledged by the supermarkets. George Taylor, chief executive of Taypack, which employs 220 full-time staff and a large number of seasonal workers, said: "The current contract expired on 1 May, however Taypack has presented a two-year proposal, based on the true cost of production, which will deliver sustainability and stability to all parties.
"This is with Asda for consideration and our door remains open. We are in a strong financial position and will take time in the coming months to provide new customers with a competitive offer which safeguards the long-term sustainability of the entire potato supply chain."
The move was unexpected given Britain's £1 billion potato market is described as "cutthroat" and there is said to be overcapacity in the processing and packaging plants supplying supermarkets.
Last night the National Farmers Union (NFU) in Scotland said Taypack's action could be the first indication growers felt more "protected" in speaking out following the Competition Commission's announcement it was appointing an independent ombudsman with powers to protect farmers and suppliers from exploitation.
Anna Davies, communications and campaigns manager for NFU Scotland, said: "This could well be a sign of increasing confidence brought about by the recent Competition Commission announcement of an independent ombudsman.
"Traditionally the large retailers have been the ones wielding the power but now those further down the supply chain will be able to speak out without fear of reprisal and will be in a position to make the best decision for their business."
The full article contains 443 words and appears in The Scotsman newspaper.
