MPs demand Morrisons probe: Fears over impact on UK food supply chain

Ministers demand probe into £6.3bn Morrisons takeover: Fears over US buyer and the impact on UK’s food supply chain

Ministers were last night urged to probe the £6.3billion takeover of Morrisons over its potential impact on the UK’s food supply chain.

The supermarket group’s bosses are recommending a sale to private equity firm Fortress, which is backed by a consortium, and insists it will be a ‘good steward’ of the business.

Fortress has made a series of commitments in a bid to head off political opposition, including to maintain the grocer’s direct involvement in large amounts of food production. 

Pledge: Morrison's buyer Fortress has made a series of commitments including to maintain the grocer's direct involvement in large amounts of food production

Pledge: Morrison’s buyer Fortress has made a series of commitments including to maintain the grocer’s direct involvement in large amounts of food production

Morrisons is unusual among the ‘Big Four’ supermarkets for owning much of its own supply chain.

But Luke Pollard, the shadow environment secretary, raised concerns about how binding voluntary pledges by Fortress are and whether they could be enforced.

The Labour MP accused ministers of ‘sitting on their hands’ over the issues and called for a probe into the takeover.

Pollard said: ‘Ministers cannot be bystanders on a takeover this significant. The best thing they could do is properly scrutinise this and get commitments that will protect jobs and the UK’s food security.

‘If Morrisons is broken up and pieces of it sold for a quick buck, that could potentially weaken the supply chain and Britain’s food security.’ 

He said if ministers were unwilling to scrutinise the deal, MPs should launch their own probes.

Supply chain issues were thrust into the spotlight in the early days of the pandemic, when shoppers across Britain were greeted by partially-empty shelves after a surge of panic-buying.

Kwasi Kwarteng, the Business Secretary, has said he is ‘monitoring’ the situation and is thought to be seeking a meeting with Morrisons bosses. 

The Mail also understands the Department of Environment, Food and Rural Affairs is engaged in the process, with ministers seeking to ensure British farmers do not suffer due to loss of contracts or goods being replaced with cheaper foreign imports. 

Morrisons was founded as a market stall in Bradford by William Morrison, whose son Sir Ken transformed it into a national grocer over a period of 50 years.

Along the way, the retail tycoon purchased several of his firm’s suppliers to gain greater control over quality and to cut overall costs. 

It now buys animals and whole crops directly from some 2,700 British farmers and has become the UK’s second-biggest manufacturer of fresh food – making everything from fresh bread to seafood and meat products such as sausages. 

It even owns a 30-foot fishing trawler called Jacqui A, after buying a Cornish seafood business in March.

This ‘vertically-integrated’ model sets it apart from the rest of the ‘Big Four’ grocers, which do not directly own most of the companies that supply them. 

Fortress said it is ‘committed to supporting Morrisons’ important role in ensuring the ongoing security of food supply in the UK’. 

However, the buyout firm has so far stopped short of making any legally-binding commitments and yesterday a spokesman refused to commit to doing so.

Rosalind Sharpe, of the Centre of Food Policy at City, University of London, said it was important to maintain domestic food supplies as the impact of climate change may mean foreign countries can export less produce in future.

She said: ‘The Government has typically taken the view that UK ownership of these things does not really matter, but that has lost a bit of ground during the pandemic, when people saw how vulnerable supply chains could be. 

So there is a strong case for maintaining the ability to feed ourselves – and that might mean in the short term that we have to be protectionist.