Scotland's farming union (NFU Scotland) has expressed its bewilderment at the outcome of the Office of Fair Trading's audit on the Supermarket Code of Practice. Whilst highlighting that it has yet to digest the full 140-page report, NFUS today gave its initial reaction to today's OFT statement.

The OFT has concluded that supermarkets are, by and large, complying with the Supermarket Code of Practice because few suppliers are using the Code to complain. NFUS continues to stress that the report highlights the major problem of suppliers fearing the consequences of complaining. Even where the OFT did uncover that suppliers were requested to make lump sum 'loyalty payments', the suppliers in question still did not make formal complaints, despite this being a blatant breach of the Code.

NFUS agrees that when the relationship between supermarkets and their suppliers works, its works to the benefit of both parties. However, NFUS remains extremely concerned that when the power of supermarkets is misused, suppliers and ultimately farmers suffer and have no means of redress.

NFUS is extremely disappointed that the OFT has again highlighted the fear amongst suppliers of complaining, yet has offered no new steps to provide an effective means of resolving problems when they occur.

NFUS President John Kinnaird said:

"It is difficult to conclude that this audit has been anything other than a waste of time. We have told the OFT and Government that the fear amongst suppliers of complaining renders the Code ineffective. However, the OFT has concluded that this lack of evidence of breaches is a sign that all is rosy in the UK food industry.

"Supermarkets are the farming industry's biggest customer and I have no time for those that oversimplify the problem and label the supermarkets as 'the bad guys'. However, there is no getting away from the fact that the big four can misuse their power. Indeed, the report itself identifies instances where this has happened.

"Given the size and importance of the food industry, there must be a check in the system and we just don't have that at present. Government and the OFT recognised the need for a Code three years ago, all we are asking is for it to be properly enforced, which the OFT seems loathe to do. The OFT has ducked this whole issue by hiding behind a Code that suppliers are afraid to use.

"It is clear that Government must look again at this problem. It has a duty to protect individuals when there are abuses of power in our food industry. If the OFT is reluctant to act, Government must. We need proper independent enforcement to protect suppliers rights, or else the trust amongst those in our UK food industry will collapse."