Retailers are charging consumers a 60% mark-up on key lamb cuts despite the price being paid to farmers falling markedly in the last two weeks, said IFA sheep chairman John Lynskey.
An IFA lamb price survey of the five main supermarkets shows that retailers are charging consumers from €10 to €16/kg for the key lamb cuts, while the farmer price has fallen from €5.50/kg to €4.70/kg in recent weeks.
Some factories are quoting €4.50/kg, which is now below the cost of production.
“Factories are telling farmers that retailers are putting pressure on them to push down prices at farm level.
"This pressure has to stop, and retailers need to review their pricing policy and return a fairer share of the retail price to farmers, which covers the cost of production and leaves a margin,” stated Mr Lynskey.
He said that the average retail price of lamb last year was €10.50/kg according to Kantar data and based on a 22kg carcase with a saleable meat yield of over 70%, this would return a retail value of €164 per lamb before the value of the fifth quarter.
At a farmer price of €100 per lamb, the retail and processing gross margin is more than 60%.
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