The ignorance of supply conditions when it comes to retail pricing has been slammed as potentially below cost selling by Alan McCutchion, president of the Fresh Produce Consortium.
Opening the Re:fresh Conference, McCutchion, right, said: “The drive to ignore the supply and demand equation in price setting is of great concern.
“Is it fair and reasonable when severe weather conditions cause extensive and prolonged shortage that the supplier’s cost of procuring the produce is not reflected in the retail price? Is this below cost selling?”
He also warned that the retail obsession with price competition was damaging the UK market’s appeal to the rest of the world.“The ability to attract supply is crucial to our industry. Retailers’ consistent and prolonged policy of ‘we will not be beaten on price’, and the deflation spiral, is making the UK uncompetitive on the world market and unprofitable to the UK producer.”
He said there was a real danger that quality supply will not be available in the medium term due to retail policy. “Producers and exporters have alternative outlets and the UK is slipping down the list of their priority markets.”
McCutchion said the ever-increasing burden of costs on the industry cannot be met solely by increased volume. “There must be a notable improvements in margins,” he said.
