The milk blockade is part of a far crueller story

It's just an episode in a scandalous, decades-long tale of corporate greed.

Every couple of years the papers run a story about the food in your local supermarket. It goes like this: you know that Lochmuir Salmon you get in Marks and Spencer? Well, turns out Lochmuir isn’t a crystal-clear lake near Edinburgh, populated by ginger-haired men in rowing boats, catching ethically-sourced salmon in small nets.

In fact, there’s no such place as Lochmuir: it’s just a brand name, chosen by a panel of consumers. The salmon’s actually farmed on an industrial scale at various sites around Scotland, by a supplier called Scottish Sea Farms.

Having revealed this and other similar tricks (Tesco’s Willow Farm, home of its chickens, is just a bunch of barns across the country, for example), the journalists generally shrug their shoulders. But it’s where the story begins. Because the idea is to give the impression of “local” food from a guaranteed source: products that have, in recent years, exploded in popularity. And the fact they only want to give this impression helps illustrate a scandalous, decades-long tale of corporate greed.

Unlike the bankers at RBS and other institutions, it didn’t financially imperil the country. Many of those who suffered weren’t the kind of people journalists care about. But in terms of pure, callous, blood-soaked capitalism, you’d do well to find a more nauseating story.

Let’s rewind the clock a couple of decades. Between 1990 and 1996, the number of independent shops with annual sales of less than £100,000 declined by 36 per cent. Over an equivalent period, the number of superstores in Britain more than doubled, to over 1,000. A 1998 report by the now-defunct Department for the Environment, Transport and the Regions made an explicit link between the two figures. It said some food shops lost up to 50% of trade when a supermarket opened.

This, we’re told, was simply the market in action: customers getting what they wanted. But you have to ask why customers got what they wanted so quickly, while no provision was made for those who’d be left behind by this brave new world.

The answer in the first instance is that corporations know how to grease the wheels of local government. In one town alone -  Seaton in Devon - Tesco offered a package including a visitor centre, football pitches and buses. For the people of Witney, it offered to build a new main road.

And the supermarkets exerted even more influence at a national level – quite apart from the number of supermarket execs on government task forces over the years, one need only look at the 13 meetings Tesco, Asda and Sainsbury held with Department for Business, Innovation and Skills ministers and officials between 2008 and 2009: years when their stores were springing up at a rate of nearly one a day.

“But the superstores create jobs!” was the mantra, churned out by the companies themselves and rarely challenged by the government, despite a 1998 report by the National Retail Planning Forum that found evidence the superstores had a negative net impact on employment up to 15km away.

It’s hardly rocket science. Your local butcher might well be less efficient than a supermarket, but he’s more likely to buy his meat from a local farm, use a local builder for maintenance jobs, and spend his profits in the local economy.

This caused untold damage to the social fabric of our small towns and cities, but was as nothing compared to that wrought on food suppliers. Tesco, Sainsbury's, Asda and Morrisons have now taken control of nearly 80 per cent of British food retail. Your out- of-town supermarket controls a local monopoly, and it’s most effective for it to buy most of its produce from a small number of large farms.

And all this has had a heavy impact on the two million people in rural Britain living below the poverty line, and, according to last month’s Observer, to the 3,000 small and medium-scale farmers in Britain put in poverty or out of business over the past decade.

I have my journalistic case study; but it’s one I can’t bear to write about in detail. He was a close friend of a friend, and he died by his own hand. Was his depression purely a result of his financial worries? No doubt it could be spun that way. Such things are impossible to quantify. All we know is: they have an impact. Governmental figures from the 1990s revealed that farmers were nearly twice as likely to commit suicide as the rest of the general population, and one shudders to think what results a similar survey would reveal today

And what of the “lucky” farmers who do supply the supermarkets? They have nowhere else to go, and so the stores can specify any number of conditions over the meat or crops they supply. Supermarkets can set whatever price they like, until the farmer’s business folds, whereupon they’ll find a new supplier.

“You won’t hear a word from the farmers on record,” says Jeanette Longfield, coordinator of Sustain, a charity that campaigns for better food and farming. “The simple fact is they’re scared to come forward, because they know they’ll be punished.”

This month we’ve seen an uncharacteristically coordinated response to the supermarkets’ sharp practises, with farmers taking to Westminster and blockades of milk plants around the country. But this is one of many occasions over the last couple of decades when the supermarkets have overstepped the mark.

“This issue comes up time and again,” says Longfield, “Milk, unlike other products, is hard to transport, so you’d think the farmers would have bargaining power. But the National Farmers’ Union (NFU) has historically seemed either unable or unwilling to unionise their members.” And indeed, many have asked whether the NFU can really be called a union at all, such is its close relationship with government.

All this pain, we’re told, is worth it for low food prices. Some will point the finger of blame at producers like Dairy Crest. But Andrew Hemming of Farmers For Action this morning left Radio 4 listeners in no doubt as to the culpability of the supermarkets in putting pressure on them. The prices paid by the supermarkets – some less than the cost of production – must be seen in the context of a world in which they’ve quadrupled their profits on every litre in the last 15 years. As Longfield says: “Would consumers even notice a few pence extra on the price of their milk? People gladly pay more for bottled water. It’s madness.”

A common belief is that the farmers are all subsidised by the European Union, so none of this really matters. “It’s not that simple,” says Longfield. “Due to the complexity of the Common Agricultural Policy regime, large farms will work the system to their advantage. The subsidies often don’t benefit the smaller farms.”

The impotence of politics in the face of big business is highlighted by how long it’s taken for any kind of legislation to appear that might stymie this lunacy. It only materialised, in fact, because, in 2006 the Office of Fair Trading made a reference to the Competition Commission after a court case involving Action Aid and the Association of Convenience Stores. The resulting report in 2008 proposed a better code of practise enforced by an ombudsman. The resulting Groceries Code Adjudicator Bill is at its third reading in the House of Lords.

Michael Hutchings, a solicitor who has advised the grocery market on the inquiry, says: “By this point competition policy was supposed to be politically independent and in the hands of the OFT and Competition Commission, but as we saw with Lloyds/HBOS – and more recently BSkyB - the government was happy to fudge the decision.

“All the details have been decided and have cross party support – it just needs a stroke of a statutory pen. Instead we’re getting long parliamentary debates in the Lords. One peer wants to give retailers the right to go to court before reports into them are published – the adjudicator won’t have the hundreds of thousands of pounds required to fight a case like that.”

Despite this, Hutchings still expects the bill to be passed without being watered down too much: “An adjudicator will have two jobs – first to arbitrate disputes between the two – this won’t really happen because the producers are scared. But more importantly, to carry out generic investigations, which will have an impact. The important thing is that the bill starts with the principle of fair dealing. Most industries do work fairly, because you don’t have such an imbalance of power between producer and supplier. This is a special case.”

 

Supermarkets can set whatever price they like for farmers' produce. Photograph: Getty Images

Alan White's work has appeared in the Observer, Times, Private Eye, The National and the TLS. As John Heale, he is the author of One Blood: Inside Britain's Gang Culture.

Chuka Umunna speaks at the launch of Labour's education manifesto during the general election. Photograph: Getty Images.
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After so badly misjudging the leadership contest, how will the Blairites handle Corbyn?

The left-winger's opponents are divided between conciliation and aggression. 

When Labour lost the general election in May, the party’s modernisers sensed an opportunity. Ed Miliband, one of the most left-wing members of the shadow cabinet, had been unambiguously rejected and the Tories had achieved their first majority in 23 years. More than any other section of the party, the Blairites could claim to have foreseen such an outcome. Surely the pendulum would swing their way?

Yet now, as Labour’s leadership contest reaches its denouement, those on the right are asking themselves how they misjudged the landscape so badly. Their chosen candidate, Liz Kendall, is expected to finish a poor fourth and the party is poised to elect Jeremy Corbyn, the most left-wing leader in its 115-year history. For a faction that never ceases to underline the importance of winning elections, it will be a humbling result.

Though the crash has been sudden, the Blairites have long been in decline. Gordon Brown won the leadership unchallenged and senior figures such as John Reid, James Purnell and Alan Milburn chose to depart from the stage rather than fight on. In 2010, David Miliband, the front-runner in the leadership election, lost to his brother after stubbornly refusing to distance himself from the Iraq war and alienating undecided MPs with his imperiousness.

When the younger Miliband lost, the modernisers moved fast – too fast. “They’re behaving like family members taking jewellery off a corpse,” a rival campaign source told me on 9 May. Many Labour supporters agreed. The rush of op-eds and media interviews antagonised a membership that wanted to grieve in peace. The modernising contenders – Chuka Umunna, Liz Kendall, Mary Creagh, Tristram Hunt – gave the impression that the Blairites wanted to drown out all other voices. “It was a huge mistake for so many players from that wing of the party to be put into the field,” a shadow cabinet minister told me. “In 1994, forces from the soft left to the modernising right united around Tony Blair. The lesson is never again can we have multiple candidates.”

While conducting their post-mortem, the Blairites are grappling with the question of how to handle Corbyn. For some, the answer is simple. “There shouldn’t be an accommodation with Corbyn,” John McTernan, Blair’s former director of political operations, told me. “Corbyn is a disaster and he should be allowed to be his own disaster.” But most now adopt a more conciliatory tone. John Woodcock, the chair of Progress, told me: “If he wins, he will be the democratically elected leader and I don’t think there will be any serious attempt to actually depose him or to make it impossible for him to lead.”

Umunna, who earlier rebuked his party for “behaving like a petulant child”, has emphasised that MPs “must accept the result of our contest when it comes and support our new leader in developing an agenda that can return Labour to office”. The shadow business secretary even suggests that he would be prepared to discuss serving in Corbyn’s shadow cabinet if he changed his stances on issues such as nuclear disarmament, Nato, the EU and taxation. Were Umunna, a former leadership contender, to adopt a policy of aggression, he would risk being blamed should Corbyn fail.

Suggestions that the new parliamentary group Labour for the Common Good represents “the resistance” are therefore derided by those close to it. The organisation, which was launched by Umunna and Hunt before Corbyn’s surge, is aimed instead at ensuring the intellectual renewal that modernisers acknowledge has been absent since 2007. It will also try to unite the party’s disparate mainstream factions: the Blairites, the Brownites, the soft left, the old right and Blue Labour. The ascent of Corbyn, who has the declared support of just 15 MPs (6.5 per cent of the party), has persuaded many that they cannot afford the narcissism of small differences. “We need to start working together and not knocking lumps out of each other,” Woodcock says. There will be no defections, no SDP Mk II. “Jeremy’s supporters really underestimate how Labour to the core the modernisers are,” Pat McFadden, the shadow Europe minister, told me.

Although they will not change their party, the Blairites are also not prepared to change their views. “Those of us on this side of Labour are always accused of being willing to sell out for power,” a senior moderniser told me. “Well, we do have political principles and they’re not up for bartering.” He continued: “Jeremy Corbyn is not a moderate . . .
He’s an unreconstructed Bennite who regards the British army as morally equivalent to the IRA. I’m not working with that.”

Most MPs believe that Corbyn will fail but they are divided on when. McFadden has predicted that the left-winger “may even get a poll bounce in the short term, because he’s new and thinking differently”. A member of the shadow cabinet suggested that Labour could eventually fall to as low as 15 per cent in the polls and lose hundreds of councillors.

The challenge for the Blairites is to reboot themselves in time to appear to be an attractive alternative if and when Corbyn falters. Some draw hope from the performance of Tessa Jowell, who they still believe will win the London mayoral selection. “I’ve spoken to people who are voting enthusiastically both for Jeremy and for Tessa,” Wes Streeting, the newly elected MP for Ilford North, said. “They have both run very optimistic, hopeful, positive campaigns.”

But if Corbyn falls, it does not follow that the modernisers will rise. “The question is: how do we stop it happening again if he does go?” a senior frontbencher said. “He’s got no interest or incentive to change the voting method. We could lose nurse and end up with something worse.” If the road back to power is long for Labour, it is longest of all for the Blairites. 

George Eaton is political editor of the New Statesman.

This article first appeared in the 03 September 2015 issue of the New Statesman, Pope of the masses