Fresh produce growers in the Irish Republic have issued a stark warning to the multiples: Increase our prices or we’ll go out of business.
In recent months, four producers - two in north Dublin and two in Wexford - have been forced to quit because of the poor returns and others are in similar jeopardy. “These were four good family businesses,” said PJ Jones of the Irish Farmers’ Association (IFA), referring to the latest casualties.
“They were people whose families had been growing fresh produce for generations. But they just couldn’t survive in today’s conditions, with production costs soaring while the prices we get for some crops are lower than they were five years ago.”
Jones, a north Dublin grower and the IFA’s national fresh produce co-ordinator, spells out the bleak economics threatening the sector. A kilo of broccoli in the supermarket costs the consumer €3.49, but the grower gets only €1.27, and there is a similar price gap with other vegetables. The grower’s profit on an acre of winter cabbage is just €8. “If I filled the three acres of Croke Park (where England play Ireland in Saturday’s rugby international) with cabbage,” he said, “I would earn just €24, which wouldn’t even buy me a ticket into the ground.”
At the same time, business costs are roaring ahead, with Irish inflation almost five per cent, more than double the EU average, and the minimum wage at €8.30 an hour, the second highest in Europe. Energy costs are also severe. “One grower recently told me that four years ago his regular electricity bill was €700 - today it is €8,000.”
Jones said he has taken these figures to the multiples and told them that unless growers’ returns are improved, the industry, with a farmgate value of over €180 million, cannot survive. “I’ve told them that Irish consumers have shown they prefer Irish produce and want to buy it, but that unless the prices paid to growers are increased - and soon - they won’t have that option. Instead, they’ll be buying Dutch produce and wondering what happened to Irish fruit and vegetables.”
In the past, fresh produce has been used as a loss leader by Irish supermarkets, as fruit and vegetables were not covered by the ban on below-cost selling. That ban was removed last year, and Jones says his hopes that the status of fresh produce would be restored have not been realised. “In fact, with cut-price and half-price offers on fruit and vegetables, things seem to have got worse.
