The “predatory pricing” of multiples poses as big a threat to horticulture as climate change, according to the leader of Ireland’s main farming organisation.
Padraig Walshe, president of the 90,000-member Irish Farmers’ Association (IFA), claims that supermarkets’ pricing policies and their use of fresh food as “loss leaders” threaten to wipe out what he called “the remaining potato, vegetable and fruit growing sectors of Irish farming”.
In a hard-hitting address to the IFA’s annual general meeting in Dublin on Tuesday, he promised to confront the supermarkets over their use of fresh food as a loss leader - the sale of such food at substantial discounts to attract customers and generate additional sales - and to expose the exploitation of producers when they are “bullied into special offers at below the cost of production.
“This unscrupulous, predatory pricing by multiples is most extreme in the fresh produce sector, where growers’ bargaining power is weakest,” said Walshe. “If allowed to continue, it threatens to wipe out our potato, vegetable and fruit growers. It ranks on the same scale of threat to farmers as climate change.”
Four supermarket groups - Tesco, Dunnes Stores, Musgrave and Superquinn - plus the German discounters, Aldi and Lidl, control 85 per cent of the Irish market, giving them, said Walshe, a stranglehold on producers and co-ops, who he labelled the real casualties in the supermarket wars for market share. And while those wars are being fought, at the expense of producers, the supermarket groups hold on to their profit margins, he claimed.
He said glib advertising slogans that promise “more for less” are deceitful. “Tesco offers 10kg of Irish potatoes for €4.99 - save €3.50! But who will pick up the cost of this giveaway. You know who - it will be the grower.
“Aldi has targeted vegetables in a blatant drive for footfall. In its latest promotion, Irish carrots that normally retail at €1.49 per kg are offered at 49 cents per kg, while Irish mushrooms, which should retail at €1.40 per kg, are being sold at the ridiculous price of 49 cents.”
Walshe wants to see action taken on below-cost offers. “Ten kilos of potatoes at half price, or two heads of broccoli for the price of one, must be outlawed. I am saying to supermarkets: Whatever a farmer produces, there is a basic unit cost that must be recovered from the marketplace.”
The farm leader’s broadside will have the support - albeit unspoken - of horticulture minister Trevor Sargent, whose north Dublin constituency includes many of the country’s vegetable growers. The former Green Party leader is on record as saying that growers need a substantial price increase if the industry is to survive.
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