Farmers accuse Tesco of using Irish suppliers to protect profits

TESCO has been accused by farmers of using Irish meat, milk and vegetable suppliers as cannon fodder in a major struggle to save its market share and protect its profits.

Irish Farmers’ Association president, Padraig Walshe, said Tesco’s tactics would squeeze producers and processors even harder at a time when the Irish food sector was under huge pressure, with farmers already being forced to produce at below the cost of production.

“On the same day as Tesco announced a major new pipeline for imports, we are seeing their real agenda, which is to push Irish food processors, farmers and growers into the frontline in the latest round of supermarket wars.

“This really throws a major question mark over Tesco’s commitment to Irish produce. Irish food producers are fearful that they will become the next victims of Tesco’s new direct import policy,” he said.

Mr Walshe said this latest retail war was totally unsustainable for Irish farmers and growers. Irish jobs and livelihoods would be lost as a result of Tesco’s grab to recover market share and shore up its profits.

He said Tesco Ireland recently reported record profits of £3.1 billion (€3.5bn) but there was no record of retailers reducing their own profit margins to give sustainable better value to consumers.

Irish food processors must resist any strong-arm tactics by retailers to maintain their own profits at the expense of Irish food producers.

Mr Walshe warned the multiples that farmers need a higher share of the consumer spend on food to remain viable and to ensure the highest food standards that consumers expect.

Ireland East MEP Mairead McGuinness has, meanwhile, challenged Tesco to sign up to plans in Britain to introduce an ombudsman for the retail sector.

“As I understand it, Tesco and other major multiples are resisting this proposal, preferring instead to rely on voluntary codes of conduct.

“The ombudsman proposal, which emanates from the UK Competition Authority, would monitor the relationships between suppliers and retailers and would arbitrate disputes between them.

“In light of Tesco’s new policy in Ireland with regard to international brand groceries at 11 of its stores in border counties, a decision by the company to sign up to the ombudsman proposal would show a desire for more openness and transparency,” she said.

Ms McGuinness said concerns had long been expressed in Britain and at EU level about the power of the multiples.

“The EU Commission has, rightly, decided to open up this area to greater scrutiny,” she said.