The Forum of Private Business (FPB) has called on Sainsbury’s to provide assurances to its supply chain, in response to news of a potential merger with Asda.
The call comes in reaction to comments made by Sainsbury’s CEO Mike Coupe this morning, referring to the new larger supermarket being able to achieve better discounts from suppliers.
Ian Cass, Managing Director of the Forum, said: “We’re very concerned that the new, larger business could use its position to further squeeze the small businesses in their supply chain, who are already working on tight margins.
The Forum notes previous experience of large retail groups imposing discounts on their smaller suppliers, often with little notice and a ‘take it or leave it’ attitude towards these smaller firms.
Ian Cass added: “While the merger would provide a strong retailer with the ability to compete with Tesco, we are concerned that the two new retail giants would effectively cover over 50% of the market, which could potentially have a hugely detrimental impact on smaller businesses.”