Irish producers are being “scared into silence” on prices their leader has claimed.
Competition legislation in the Irish Republic allows multiples to pay producers as little as a fifth of what they charge consumers for staple foods such as potatoes, according to the Irish Farmers’ Association (IFA). Its president, Padraig Walshe, told a parliamentary committee in Dublin on February 6 that producers and suppliers are “so fearful of the power supermarket chains wield over them that they are scared into silence and submission lest they be delisted at the whim of a buyer”. The situation was “intolerable”, he said.
The 90,000-member IFA wants producers to be excluded from the scope of the Competition Act when it is updated later this year, so that growers, for instance, can get together as a group and negotiate prices with retailers. At present, such a move is deemed illegal under the legislation and the IFA has already faced court action by the Competition Authority when attempting to assert dairy farmers’ rights in a dispute over milk prices.
Walshe told the committee, which is investigating the Irish retail trade, that when the position of an individual farmer was set against that of a major multiple, “the balance of power is totally unequal”. It was “absolutely absurd”, he claimed, that under the current competition law farmers and growers are prohibited from acting together to negotiate food prices.
He cited France as an example of good practice where producers, suppliers and retailers meet regularly to set produce prices for certain sectors. In contrast, Walshe said, the price Irish producers were paid by the multiples was only a fraction of what consumers were charged. For a 2.5kg bag of washed potatoes, for instance, the grower got just €0.70 (£0.61), while the retail price was €3.74 (£3.27). Similarly on carrots, the return to the grower was just over 40 per cent of the shelf price in the multiples.
Walshe accused the six major chains in the Irish market - Tesco, Dunnes, Superquinn, the Musgrave-owned SuperValu, and discount chains Lidl and Aldi - of “ratcheting up demands while at the same time pushing down prices”. He claimed retailers imposed additional packaging and transport costs on producers, as well as demanding “hello money” to get produce displayed and long-term rebate agreements that translated into end-of-year payments.
Growers and farmers must be freed from the restraints of the competition legislation “to help rebalance bargaining power in the Irish food chain,” Walshe concluded.
