IFA President Eddie Downey has warned retailers against discounting of fresh produce in the run-up to Christmas, where growers are used as pawns in a vicious battle over market share. He said, “The use of below-cost selling of farm produce as a tool to drive footfall undermines Irish production and the financial viability of specialist growers. These growers have invested hugely in their farm businesses to supply a plentiful crop of fresh Irish produce for Christmas. Retailers have to respect this investment”.
Launching IFA’s Christmas for Growers campaign on a farm in north Dublin that produces brussels sprouts, Eddie Downey said, “Pricing decisions will be made this week by the retailers for the run-in to Christmas, which is six weeks away. In 2013, some items were sold at one tenth of their production cost. This action had the consequence of decimating grower incomes and sending a misleading message to consumers regarding the inherent value of what is healthy food”.
Eddie Downey said claims by supermarkets that they bear the entire cost of these ‘giveaways’ are disingenuous and not borne out by the facts. “This continuous downward pressure on fresh produce is threatening local growers that are part of an indigenous sector which is worth over €350 million per annum to our economy. Fresh produce which is in season – Brussels sprouts, carrots, parsnips, cauliflower – costs up to 70 cent per unit to produce. When they are promoted as low as 49 cent, they are clearly below cost and consumers should be aware that margins on other products in the same shop are jacked up to take more money from them.”
The IFA President said recently some retailers have been looking for plaudits for introducing a living wage for its staff. However, we have yet to hear what action they will take to ensure that their suppliers will get a living wage. The extra cost in paying higher wages cannot be at the expense of suppliers.
He said the Competition and Consumer Protection Act totally neglected to address the issue of below-cost selling, and Eddie Downey said the Government could not simply stand by and let the retailers repeat their behaviour of two years’ ago. It’s over a year since the retail legislation was passed and we are still waiting for the regulations to take effect. Enterprise Minister Richard Bruton must move on this and we also need action at European level to address unfair trading practices in the food supply chain.”
The IFA President also challenged the Competition and Consumer Protection Commission to monitor the activities of the retailers. “This Commission is very quick to wave its flawed legislation at farmers, who are after all price takers. However, farmers would question how a small number of powerful retailers can arrive at the same price point and it doesn’t trigger any interest from the Commission”.
Eddie Downey said, “Growers are fed up with the quality product from their investment and hard work becoming a weapon in the war of attrition between the major multiples. The fresh produce sector is in ongoing decline and we will not allow the industry to be decimated by crude price-cutting tactics, which give the illusion of value to the consumer. Supermarkets are quick to use local individual growers for promotion, but that belies the real situation”.