The Food War

The accountancy firm Moore Stephens said supermarkets are squeezing producers in order to cut check-out prices and boost profits. This year 146 food producers have entered insolvency, up from 114 last year. Moore Stephens said the rise in food producer insolvencies was in contrast to the 8% fall in company liquidations generally in the 12 months to the end of September.

Tough competition in the supermarket sector has intensified with the rise of discounters such as Lidl and Aldi.

Duncan Swift, a partner at the firm, said: "The supermarkets are going through the bloodiest price war in nearly two decades and are using food producers as the cannon fodder. Supermarkets have engaged in questionable buying practices for years, but it's getting worse and clearly wreaking havoc on the UK food production sector." Despite being squeezed, food producers are reluctant to speak out, Mr Swift said. "The fear of losing business from supermarkets means that food producers rarely - if ever - complain about clear breaches of agreed industry standards. That means there is no check on the highly aggressive buying practices of the supermarkets."