Examination of Witnesses (Questions 518-519)
MS KATHARINE
WALTERS, MR
SIMON HUGHES
AND MR
KEVIN HAWKINS
WEDNESDAY 27 FEBRUARY 2002
Chairman
518. Just for the record, we have Katharine
Walters, Government Relations Manager of the Co-operative Group;
Simon Hughes, Fresh Meat Buyer, Netto Foodstores Limited; and
Kevin Hawkins, Communications Director, Safeway Stores plc. Thank
you for coming here today and for any information you have given
us in advance. We are doing an inquiry into basically the future
of farming so really the heart of this inquiry is to try to find
out what is happening in your world and the consumers you are
dealing with and to find out how those messages get back so that
the farmers can kept abreast of those modern trends. So all the
time if we can focus our questions and you can focus your answers
on how we get through that line of communications. Could I begin
by asking you first the question I just asked your predecessors:
if the pound were, for the sake of argument, ten per cent weaker
against the euro, what impact would that have on the procurement
policies you have and the ability of farmers in Britain to secure
more of their produce through your stores and earn a livelihood
from that? How great a weight is that exchange factor?
(Ms Walters) I think, as the colleagues
before said, relationships between retailers and suppliers, including
farmers are long-term relationships. They are based on trust and
based on knowing each other for a long time. They are not simple,
day-to-day contractual relationships. And so whilst price is a
key element, I do not think that immediate short-term fluctuation
in terms of currency would make us change those relationships.
Clearly long-term economic cycles would have some bearing and
price for retailers has to be an element, and so if imports became
substantially cheaper I think we would see us bringing in some
imports, with the usual caveat that we do seek to buy British
products.
519. I will ask each of you the question, without
telling us what it is, is there a specific line, for example a
commodity-based product, which is so price sensitive that changes
in that exchange rate would be likely to cause a change of direction
for procurement?
(Ms Walters) Not having a background
in procurement I would be unable to say that at this stage.
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