ICMSA claims suppliers forced to accept below-cost prices for goods

GIANT retailers are dictating national food policy, the Irish Creamery Milk Suppliers Association has claimed.

Jackie Cahill, ICMSA president, accused the retail groups of operating grossly excessive “Paddy” margins while forcing their Irish suppliers to take below-cost prices for their produce. He claimed giant retailers had taken over the food sector since the Groceries Order was suspended more than three years ago.

Mr Cahill said the Government had effectively abdicated responsibility and ceded control to massive conglomerates.

Even more unfair was the practice of dropping the prices paid to suppliers of household staples like milk to below-cost levels.

He said the retail giants then use those products as “loss leaders” to attract customers into their supermarkets where they make their profits through selling other items.

“We have arrived at a situation where milk suppliers are receiving below-cost prices for their milk and effectively subsidising the more profitable lines and products,” he said.

Mr Cahill called for the re-introduction of the Groceries Order that forbids the sale of food products below cost price. “Allowing the one element of any sector to become too powerful is what has brought the country to its knees,” he said

Meanwhile, the Irish Cattle and Sheep Farmers Association said farmers are not to blame for price differentials between Ireland and Britain.

Munster vice president Edmond Phelan said farmers, who are being paid 20c/litre for milk and receiving just over €3.00/kg for beef and €3.80/kg for lamb, are not the ones pushing prices up. “Clearly there is an issue with the cost of doing business in Ireland but it must surely be obvious to all that the farmer is not contributing to this problem,” he said.

Cork North West Fianna Fáil TD Michael Moynihan said it was “a load of rubbish” for supermarkets to claim that the demands of producers must come at the cost of higher prices to consumers.

He pointed out that in the 12-month period up to March 2009, the price to farmers for a litre of milk dropped 42% from 38.6 cent to 21.8 cent.

But the average cost to shoppers for milk on the supermarket shelf went up from €1.112 to €1.128 a litre, more than five times what the farmer was paid for that milk.