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SME food suppliers at risk from supermarket price wars

458 supermarkets
458 supermarkets

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January 27, 2015

Supermarkets
Supermarket price slashing could spell trouble for UK food suppliers

SUPERMARKET price wars could send more than 100 UK food suppliers to the wall,
according to insolvency specialists Begbies Traynor.

The report found about 4,550 food-selling businesses are currently struggling

It warned that the number of food firms in “significant distress” nearly doubled in the last three months of 2014 and the food retail industry itself is also showing signs of financial problems.

The report found about 4,550 food-selling businesses are currently struggling, compared to 2,878 a year ago. The number in significant distress rose from 733 in the last quarter of 2013 to 1,410 in the last quarter of 2014.

The rise in financial difficulty is more marked for smaller companies. Small food retailers in distress during the final quarter of last year rose 61% to 4,388, while small manufacturers of food and drink showed a 113% rise to 1,240.

BBC Business reports that part of the pressure on food makers comes from supply agreements with big buyers, such as supermarkets, which can involve large discounts, slow payments or demands for rebates.

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