What This Supplier Survey Reveals About the Future of Groceries Will Change How You Invest Forever
Ever wonder how suppliers in the agri-food sector manage to keep their heads above water when the margin squeeze feels like a vise tightening on all sides? It turns out, whether you’re a big fish or a small fry, no one’s immune to the pressures of pricing wars and inflation — although, the little guys seem to be getting the worst of the deal. The latest annual survey from the Agri-Food Regulator shines a revealing light on the often tricky dance between suppliers and some of the biggest buyers out there — think Aldi, Lidl, Tesco, and the rest. As suppliers grapple with stagnant or even shrinking prices despite rising costs, it begs the question: how sustainable is this game, especially when growth opportunities can seem like a mirage for many? Plus, there’s the layer of protection — or the lack thereof — against unfair trading practices, with some suppliers quietly bearing the brunt of abrupt order cancellations or unexpected charges. So, what’s really going on behind the scenes in these commercial relationships, and who’s calling the shots when it comes to price and terms? Dive into the findings that not only expose the challenges but also underline the crucial role of regulation and dialogue in leveling the playing field. LEARN MORE
From margin pressures to protection against unfair trading practices, the annual survey reveals illuminating details on the relationships between suppliers and specific buyers
Margin pressure is universal for suppliers of food and drink products to the retail and wholesale sector.
Larger players are more cushioned but are still impacted, while smaller suppliers absorb greater risk and are least able to pass on inflation.
This is one of the insights of the Agri-Food Regulator’s annual supplier survey that was recently published. The survey gathers feedback on trading relationships with eight specific buyers — Aldi, BWG, Dunnes Stores, Lidl, M&S, Musgrave, Sysco and Tesco.
Through interviews carried out to supplement the survey, a number of suppliers indicated that buyers control if, when and how prices change and that buyer prices held steady or were pushed down despite higher supplier costs.
It was noted by some suppliers that higher sales did not always improve profitability and can increase financial pressure as their business may need to spend more money earlier leading to strain on day-to-day finances.
Growth opportunities do exist but are hard to pursue and finance, particularly for smaller suppliers.
“There is no doubt that suppliers involved are experiencing pressures” said Niamh Lenehan, CEO of the AgriFood Regulator.
“Some suppliers are abandoning growth opportunities even after contracts are signed due to lack of capital, while smaller and niche producers are struggling to compete on price and discounting with imported products.”
This is the second year of the Agri-Food Regulator’s survey of agri-food product suppliers to the retail and wholesale sector, and 485 suppliers completed the survey, resulting in responses relating to 1,313 trading relationships, which was a 58 per cent increase in the number of respondents.
The supplier businesses ranged across food categories from fruit, vegetables, meat, fish and poultry to ambient, chilled dairy, ready meals and frozen foods.
Drinks are classified as agri-food products — 13 per cent of respondents supplied non-alcoholic drinks and 12 per cent supplied alcoholic drink — as are flowers and plants.
A section of the survey examines compliance by the buyers with the Unfair Trading (UT) Regulations from the suppliers’ perspective. Introduced by the EU in 2021, the Agri-Food Regulator is the enforcement authority for these regulations in Ireland since its establishment in late 2023.
The UT Regulations provide legal protection for suppliers of agri-food products against 16 specific unfair trading practices (UTPs) by their buyer, in situations where the supplier’s annual turnover is lower than the buyer’s turnover and the buyer’s turnover is greater than €2 million.
Ten of the UTPs are prohibited in all circumstances while the remaining six are prohibited unless there is an agreement in place before-hand. In the survey, when asked if they felt they experienced one of the UTPs, 11 per cent of respondents said that they did, with some suppliers reporting experiencing multiple UTPs with multiple buyers.
Four per cent said they were subject to cancellations of orders of perishable products with less than 30 days’ notice, while 3 per cent said that they were required to pay for the loss or deterioration of their product where such loss was not due to their own negligence.
The UTP payment terms of not later than 30 days for perishable products and not later than 60 days for non-perishable products were also reported as breached with 3 per cent of suppliers indicating that they had experienced each.
“Our role is to ensure full compliance with the regulations,” said Melanie Hall, Head of Unfair Trading Practices Compliance and Enforcement in the Agri-Food Regulator.
“While the survey is not a mechanism to file a complaint with the regulator, it is a process for suppliers to inform us of their trading experiences in confidence.”
The survey was conducted independently by RED C Research on behalf of the Agri-Food Regulator.
While the Regulator sought the assistance from the eight buyer businesses to distribute the survey, buyers do not know if a supplier business did or did not complete it.
“We are aware of the fear factor in not only fi ling a complaint but also addressing the underlying issue with their buyer,” continued Ms Hall.
“And this year we wanted to further explore suppliers’ experiences and commissioned RED C to conduct qualitative research with respondents who agreed to follow-up interviews.”
This research discovered that suppliers do not raise a UTP with their buyer out of fear of delisting, retribution or damaging an already fractured relationship.
If a supplier is going to escalate an issue, they prefer to do so directly with their buyer as they believe that joint resolution has a long-term benefit to the relationship. Raising a UTP with the regulator is seen as a last resort.
One small business owner interviewed as part of the qualitive research said that for them “if it meant nearly shutting the business down, like a full delisting for invalid reasons, then it would probably become a valuable avenue of resolution”.
Other respondents said they were unsure of the anonymity of the process and fear that, even if the regulator did not identify them, the buyer would figure out who the complaint came from through the process of elimination.
“Resolving an issue with your buyer is a positive way to build on your relationship,” said Ms Hall.
“But given that these regulations were introduced five years ago, we understand that some suppliers may not fully be aware or understand them.
“I am keen to stress that suppliers can contact the regulator in confidence for advice and guidance about the protections offered under the unfair trading practices rules. Giving us a call or sending an email to us does not mean an automatic fi ling of a complaint. And it means a supplier who is fully informed of their protections under the UTPs is on a stronger footing when raising the issue with their buyer.”
The survey also found that suppliers who had raised an issue with the Agri-Food Regulator had a positive experience and were directed with ease and efficiency.
“I urge both suppliers and buyers to read the complete survey findings,” said Niamh Lenehan.
“The research helps inform the work of the Regulator, but it also gives buyers a valuable insight into suppliers’ perspective. For suppliers, it affords them the opportunity to contextualise their experience with their peers’.”
The complete findings of the Agri-Food Regulator Supplier Survey 2026 are available on www.agrifoodregulator.ie
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