Tesco chief executive Sir Terry Leahy felt the full force of Irish growers’ anger over his company’s policy of cutting consumer prices by squeezing suppliers and increasing imports when he visited the Republic on Tuesday.
Around 30 furious potato growers stormed a Tesco executives’ meeting that Sir Terry was attending at a hotel in Ashbourne, County Meath, to take their protest directly to him. Brandishing packs of imported English potatoes from local Tesco stores, they forced their way past hotel security and into a meeting of 200 Tesco managers.
Staff tried unsuccessfully to calm them as they protested that their livelihoods were being threatened by a combination of reduced returns and imports. Eventually, Gardaí were called and the growers agreed to leave, with one telling Sir Terry: “The anger over what is happening is at boiling point. Unless you get a handle on this, it will spill over and you will have major problems.”
Later, in the Irish parliament, enterprise minister Mary Coughlan said major retailers like Tesco “must give suppliers a fair price for their produce”. She told members: “Any company, no matter who they are, if they are making a profit and sustaining their business, should distribute a reduction in prices to consumers and equally give a fair return to the suppliers.”
She added that the Competition Authority was currently examining claims by farmers that their produce was being pushed off shelves by cheaper imports. “People expect better value for money but this has to be balanced with a sustainable food sector,” she said.
Tesco’s Irish executives were greatly embarrassed by the incident, especially as it happened during Sir Terry’s visit. In a statement, the company said it was “very proud” of its contribution to Irish agriculture and that it purchased €2 billion (£1.76bn) worth of Irish food annually. A spokesman declined to discuss the level of potato imports, but the statement promised: “We will continue to work in partnership with local producers, one element of which has been the production here of peppers and onions, which were previously imported.”
The squeeze on potato growers comes at a difficult time, with last year’s crop hit badly by the weather and the fall in the value of sterling making imports more attractive. Growers are the second group to protest over Tesco’s price-cutting plan - last week, 70 dairy producers staged a trolley blockade inside one store.
A prominent Irish MEP and farming expert, Mairead McGuinness, claimed the key issue was that small suppliers had no option but to accept the reduced prices dictated by the multiples. “Ultimately,” she said, “if we do not check the power of the supermarkets, consumers will lose out through less choice and potentially higher prices... It is now virtually impossible for consumers to know how the prices they pay relate to the input costs and profit margins of larger chains.”
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