04 Dec 2014
RETAILER DISCOUNTING OF FRESH PRODUCE WILL HAVE REPERCUSSIONS – IFAHorticulture
IFA President Eddie Downey has warned retailers that farmers will not tolerate a repeat of the savage discounting of Irish potatoes and vegetables which occurred in the run-up to last Christmas, where growers were the victims in a vicious battle over market share.
He said, “Pricing decisions will be made in the coming days by the retailers for the run-in to Christmas. In 2013, some items were sold at one tenth of their production cost. This action has the consequence of undermining local growers and sending a misleading message to consumers regarding the inherent value of what is essential and 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. “In the last 12 months, we have seen some retailers impose average reductions of 10% in the farm gate price. 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. Growers are now at breaking point with some returns below the cost of production.”
He said the new Competition and Consumer Protection Act introduced this autumn totally neglected to address the issue of below-cost selling, and Eddie Downey said that Minister Coveney could not simply stand by and let the retailers repeat last year’s behaviour.
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 wave the Irish flag and use individual growers for promotion, but that belies the real situation. Farmers can’t continue to produce food at rock bottom prices which put their businesses at risk”.