IFA Dairy Chair Stephen Arthur said there is only one loser when supermarkets engage in price wars and that is the farmer. The latest announcement of a reduction in the retail price of butter follows a cut in the retail price of milk announced last weekend.
“We have seen supermarkets use dairy products as loss leaders in the past. Our input costs remain historically high, so our farms cannot withstand such cuts. We are squeezed from both sides as we are consumers too. We need a fair margin,” he said.
“It is evident that the supermarkets are cutting food prices to attract customers. This could quickly escalate into a price war where only the farmers will pay the price,” he said.
There is an immediate need for the Food Regulator to be established to ensure transparency.
The CSO agricultural input cost index has risen by 50% in the past two years.
“Our margins are being eroded at an alarming rate and these announcements by retailers are further damaging morale,” he concluded.