The Irish Cattle and Sheep Farmers’ Association (ICSA) has reported that some food retailers have contacted small-scale primary producers to pass on any reduction in their input costs. The ICSA believes that the current focus on high grocery prices has resulted in pressure being piled onto local suppliers to reduce their costs and pass on those savings to retailers. The ICSA’s beef chair, Edmund Graham, has warned the government not to be manipulated by supermarket groups, particularly in relation to the price of important household staples like meat, bread, vegetables, and dairy.
According to Graham, food retailers are in the spotlight following a meeting of the Retail Forum with the Minister of State at the Department of Enterprise, Trade, and Employment on Wednesday, May 10th. Minister Neale Richmond has stated that retailers have given assurances to the government that consumers will benefit from grocery price cuts, but only where input cost reductions filter through to products. Graham has emphasized that it is crucial that Irish suppliers are not required to find these input cost reductions for retailers.
Graham has stated that most primary producers are operating with tiny margins and have next to no bargaining power when it comes to negotiating with the big retailers. He has expressed concern that these producers are the ones being hammered in the name of bringing down food prices so that retailers can continue to make massive profits behind a veil of almost total secrecy. Last week, some supermarket groups reduced the price of milk and own-brand butter, and this week, a number also reduced the price of their own-brand bread.
Graham has described it as “laughable” to pretend that a 10c cut in a loaf of bread is going to make a substantial difference to household budgets when there are thousands of product lines on supermarket shelves that continue to be sold at extortionate prices. He has emphasized that input cost inflation is real and the narrow margins on primary products are a reality that is putting extreme pressure on farmers, especially in meat, cereals, and vegetables. He is concerned that following the meeting of the Retail Forum, hugely profitable retailers have decided to wield their power and heap pressure on primary producers and small-scale suppliers so that they can virtue signal about reducing prices for consumers but still maintain their own profit levels.
The ICSA has documented examples of farmers whose costs went up 33% but who gained about 8% in product price in their dealings with retailers. Graham has added that this week’s beef prices are about 8% above this time last year, and lamb prices this week are exactly the same as in 2020 and 2021. In that context, it is offensive to see the government egging on retailers to cut prices for key farm products as if the farmer price is the main driver of inflation.
Graham has warned the government not to be manipulated by supermarket groups and has highlighted the importance of ensuring that Irish suppliers are not required to find input cost reductions for retailers. He has emphasized that most primary producers are operating with tiny margins and have next to no bargaining power when it comes to negotiating with the big retailers. It is crucial that these producers are not hammered in the name of bringing down food prices so that retailers can continue to make massive profits behind a veil of almost total secrecy.