A survey claiming that the mark-up multiples charge on vegetables in the Irish Republic can be as high as 250 per cent has provoked a storm of protest, with demands for government intervention.
Dermot Jewell, spokesman for the Irish Consumers’ Association, said: “Ministers should call in the major retailers and ask them to explain these huge mark-ups. Both consumers and producers are being penalised by what are outrageous costs.”
The survey, commissioned by the main Irish opposition party, Fine Gael, and covering the three principal supermarket groups - Tesco, Dunnes and Superquinn - found that the mark-up on mushrooms was a remarkable 249 per cent. While the grower received €1.35 (£1.07) a kilo, the comparable price when the product reached the supermarket shelves was €4.71/kg.
On cabbage, the stores’ profit margin was 120 per cent. The price for the grower was just 60 cents, while the consumer was charged an average of €1.32. A kilo of carrots had a farmgate price of just 75 cents, but supermarkets charged €1.59/kg, which represented a mark-up of 112 per cent.
Cauliflower earned the grower 80 cents, but made an 86 per cent profit for the retailers, selling at €1.49. Lettuce, at 45 cents per head for the producer, had a retail price of 73 cents, a 62 per cent margin. A 10-kilo bag of Rooster potatoes, worth €5 to the grower, cost the shopper €8.33, a profit margin of 67 per cent.
On a basket of nine items, including milk, beef and eggs, as well as vegetables, the survey found that consumers were charged over twice what the producer gets - €33.77 as against €14.55. Tesco was found to have the highest overall mark-up on the items, at 147 per cent, with 126 per cent for Superquinn and 120 per cent for Dunnes.
Retail Ireland, representing the multiples, reacted angrily to the survey, claiming it was “wilfully misleading” consumers. According to spokesman Torlach [stet] Denihan, it ignored the fact that retailers “do not buy directly from individual producers, so the prices quoted don’t apply”. In addition, he said, the survey ignored the costs incurred for processing, packaging, storage, advertising and distribution.
But Jewell said that many products had nothing added to them. “They simply move through a system that adds on money, which is why people find these mark-ups so frustrating. The only answer open to consumers is to buy directly from farmers’ markets.”
The leader of the 88,000-member Irish Farmers’ Association, Padraig Walshe, called for action to tackle what he called “the widening imbalance between retail prices and what the producer gets”. The need for such action was urgent, he said, given that the cost of fuel, fertiliser and other inputs was continuing to increase.
The survey comes at a time when supermarket groups are already under government pressure for failing to pass on in lower prices the 20 per cent fall in the value of sterling against the euro. With inflation now at five per cent, almost double the EU average, and an economic downturn threatening jobs, consumers have become increasingly concerned over high prices as family budgets are squeezed.
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