IFA targets ‘unscrupulous, predatory pricing’ by supermarkets

THE Irish Farmers Association last night launched a campaign to target supermarkets’ use of food as a loss leader and 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,” said IFA president Padraig Walshe.

Mr Walshe said predatory pricing by supermarkets ranks on the same scale of threat to farmers as climate change and WTO.

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 dairy products. They were engaged in a blatant distortion of the market.

“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.”

Mr Walshe said glib advertising slogans, offering “more for less” every day, are perpetrating a great deceit on the public.

The four main groups, Tesco, Dunnes, Musgrave and Superquinn, and the German discounters control 85% of the food market. “They have a stranglehold on producers and co-ops, who are the real casualties in the wars between them for market share, while they hold onto their profit margins,” he said.

Mr Walshe said newspapers are full of food items as loss leaders:

Dunnes Stores: a twin-pack of Denny ham at €4.40 and not a trace of the Origin Ireland logo. Every producer knows you can’t feed two pigs for the price of one.

Tesco: 10kg of Irish potatoes for €4.99, save €3.50. It is the farmer who will pick up the cost.

SuperValu had Irish beef discounted by 33%, while winter finishers are unable to cover their costs.

Aldi has targeted vegetables and potatoes in a blatant drive for footfall in its stores. Irish carrots that normally retail at €1.49 per kg were in its January promotion campaign at 49 cent per kg and Irish mushrooms that should retail at €1.40 per kg were at the ridiculous price of 49 cent.

Mr Walshe said 10kg 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.”