Farmers vow to tackle supermarket policies

The Irish Farmers' Association has accused supermarkets of using fresh food as "loss leaders" and claimed their "predatory pricing…

The Irish Farmers' Association has accused supermarkets of using fresh food as "loss leaders" and claimed their "predatory pricing" was as great a threat to farming as climate change or the World Trade Organisation.

IFA president Pádraig Walshe told the association's annual general meeting in Bluebell, Dublin, that supermarkets' policies threatened to wipe out the remaining potato, vegetable and fruit growing sectors of Irish farming.

In a hard-hitting address to delegates, he promised to target supermarkets' alleged use of food as a loss leader - where foods are sold at a substantial discount in order to 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 supermarkets is most extreme in fresh produce, where the growers' bargaining power is weakest, and threatens to wipe out our remaining Irish potato, vegetable and fruit growers," he said.

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"A clear illustration of the dominant power of supermarkets was when the world price for milk powder more than doubled to $5,000 per tonne. This product was being sold to some of the poorest people in the world, in Africa and the Caribbean, at the full market price," he said.

"At the same time, European supermarkets, such as Aldi, abused their dominant market power to hold down the price of cheese and dairy products. They were engaged in a blatant distortion of the market," he continued.

"The perverse result was that, while those that could least afford it were paying market prices, the world's wealthiest consumers were paying the lowest prices and were not even asked for a price increase."

The IFA president said glib advertising slogans offering "more for less", were deceitful.

As the four main groups - Tesco, Dunnes, Musgrave's and Superquinn - and the German discounters controlled 85 per cent of the Irish food market, they had a stranglehold on producers and co-ops, who were the real casualties in the supermarkets' wars for market share. All the while, supermarkets held on to their profit margins.

"Tesco offered 10kg of Irish potatoes for €4.99, save €3.50. You know who will pick up the cost of this give-away - the farmer. SuperValu had Irish beef discounted by 33 per cent while winter finishers are unable to cover their costs," he continued.

"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," he said.

He said producers' and co-ops' weakness was epitomised by their fear of being delisted should they seek a price increase.

EU commissioner for agriculture and rural development, Mariann Fischer Boel, and Minister for Agriculture Mary Coughlan will address delegates today.