Farmers Clash with Retailers Over Rising Prices

Farmers are reporting increasing difficulty in securing cost‑price increases from several retail buyers, according to the National Farmers’ Union (NFU), as input costs climb sharply amid conflict‑driven supply shocks and climate‑related pressures.

Retail buyers’ inconsistent handling of CPI talks

While a handful of supermarket chains follow a “clear and predictable” process for cost‑price negotiations, the NFU says many others leave suppliers “facing long periods of uncertainty.” The union noted that this uncertainty fuels “a significant increase in industry frustration.”

Several members described a well‑established “playbook” used across buying teams, suggesting the problem is often systemic rather than the result of an individual buyer’s approach. The union has raised these concerns with the Groceries Code Adjudicator (GCA), alleging that some retailers’ handling of CPI discussions lacks structure, making outcomes and timelines hard to anticipate.

Rising input costs strain farm margins

Key inputs such as feed, fertiliser and fuel have surged in recent years. Fertiliser prices remain well above pre‑war levels after the supply shock caused by Russia’s invasion of Ukraine in 2022. Fresh instability in the Middle East has pushed some fertiliser products up by as much as 36 % since February, according to data from the Agriculture and Horticulture Development Board (AHDB).

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Red diesel prices have also jumped more than 40 % year‑on‑year, based on June AHDB figures. Consultancy The Andersons Centre calculated “agflation” – total farm‑input inflation – at 8.4 % year‑on‑year in May, outpacing overall CPI inflation of 3.3 % and CPI for food at 3.5 %.

Even with these cost pressures, many buyers appear to adopt a “head in the sand” approach to CPI requests. NFU members say they are asked to provide detailed evidence by a set deadline, only to hear nothing for weeks or months afterward. Such delays could breach the GCA’s seven golden rules, the union suggested, and it is now seeking additional anonymous evidence from its membership.

Farmers fear losing contracts.

Ali Capper, executive chair of British Apples and Pears, echoed the complaints, noting that producers often fear retaliation if they identify a retailer in a GCA complaint. “There are usually just two or three or four key suppliers to a retailer,” she said, adding that a complaint could jeopardize business relationships and lead to contract loss.

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Baroness Minette Batters, a former NFU president, has called for the GCA’s remit to be extended further down the supply chain and for greater transparency on CPIs. She warned that “with such extreme volatility and increasing costs for suppliers, it’s essential those costs are covered [by buyers].”

Mark White of the GCA stressed that cost‑price negotiations must be fair, with prompt responses, no surprises, and appropriate use of evidence. He warned in October 2024 that retailers were “using avoidance tactics or flat‑out refusing to engage.” Suppliers experiencing issues are advised to contact the GCA or a retailer’s Code Compliance Officer confidentially.

The NFU’s latest intervention comes as the farming community grapples with these financial strains. The union’s push for clearer, more consistent CPI procedures reflects broader concerns that the existing system may not adequately protect producers from volatile market conditions.