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 Asda 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.
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.
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.
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.
