MAGGIE PAGANO: Farmers are taking the hit from inflation

Morrisons has just slashed prices on hundreds of items, from basic foodstuffs like potatoes to fancier sirloin steak.

The supermarket giant hopes to cut costs by around 20 percent to win back customers lured away by discounters Aldi and Lidl.

Morrisons was the UK’s fourth largest supermarket chain until last autumn, but was overtaken by Aldi. While these hefty cost savings are great for customers, it’s not so good for the retailers who compete for volume at the expense of profit margins.

Operating profit margins at Tesco are now around 4 percent, while other retailers have even smaller margins.

That is presumably why Tesco chairman John Allan declared war on both food suppliers and his rivals in his rather unusual outburst during a Sunday TV interview.

Allan blamed food suppliers for the continued skyrocketing price hikes, claiming they could very well be making a profit by jacking up prices more than they needed to.

His buyers, he says, are having tough talks with many of their suppliers, asking them to justify price increases.

They fell out with many of them during the process. Allan is right to slam his suppliers, but this time he may have gone a little too far.

National Farmers Union boss Minette Batters is furious at his claims, which suggest Allan is living in a parallel universe if he believes farmers and other food suppliers are making profits on the back of inflationary pressures.

As she points out, his comments are baffling as farmers and suppliers have faced a 650 percent increase in wholesale gas prices — and other rising inputs — over the past three years.

Other analysts described Allan’s comments as outrageous and plain wrong, as suppliers were picky about justifying every penny of price increases. So, who’s right?

Are farmers and wholesalers the bad guys? The evidence suggests not. Overall figures from the NFU show that farmers have endured the most painful price hikes of energy, fertilizer and food, all of which surged following the lockdown and war in Ukraine.

ONS data shows that while agricultural output prices rose an astonishing 26.8 percent in the year to October, agricultural output prices rose to the still high, but significantly lower, level of 17.7 percent.

On balance, farmers have had to raise prices, but they have paid for most of the costs themselves. Far from depleting customers or turning a profit, many have been forced to cut production while others go out of business.

Therefore, Batters is right in pushing Rishi Sunak to create a united national food security policy, to find more ways to increase homegrown production and make agriculture more efficient.

Allan should join her campaign.

Planning a funeral

Direct Line founder Sir Peter Wood leads the consortium bidding for Dignity. While the number of excess deaths has sadly increased over the past year, Dignity has run into murky waters.

It owes more than £500 million in debt and is running out of cash.

But there is potential. Dignity operates over 700 funeral businesses and Sir Peter sees an opportunity to improve and expand his funeral business.

Investors have choices. They can withdraw 550 pence in cash (a 29 percent premium on the shares from when an offer was first made) and own shares in the privately held private company Valderrama or opt for shares in the Castelnau Group, a publicly traded investment trust managed by Phoenix Asset Management, in which Sir Peter has an interest.

Stay with me. It’s not that complicated. But the benefit of taking shares in Castelnau gives investors a way out and the chance to see Sir Peter back in action.

Success story

Hats off to three British success stories.

Everyman Media has seen a huge increase in sales in the past year. It plans to add several more cinemas to the 38-member chain.

Billionaire Bill Ackman has taken a big stake in the latest funding round for London-based Bremont Watches because he liked the timepieces so much.

Third, sparkling wine sales at English producer Chapel Down surged 53 percent after selling a record number of bottles of its premium bubbly last year.

Even better news, Chapel Down says consumer confidence is back with a bang after 15 months of decline.