17 May 2022

Tipperary farm leader calls for ban on below-cost selling of food

Tipperary farm leader calls for ban on below-cost selling of food

Food prices: IFA leader Tim Cullinan has called for the ban on below-cost selling of food to be restored by the Government

The Government should move quickly to restore the ban on below-cost selling of food, according to IFA president Tim Cullinan.

The Toomevara farmer was commenting as he launched a report on the horticulture sector, Retail Price Compression Threatens the Viability of Irish Horticulture, by economist Jim Power

“The price compression at retail level has forced growers out of business. The most recent National Field Vegetable Census, which is now out of date, showed that the number of field vegetable growers fell from 377 in 1999 to 165 in 2014, a reduction of nearly 60%. It is clear from anecdotal evidence that this trend has continued in recent years,” he said.

Mr Cullinan said the inputs crisis at farm level had become far more severe as a result of the war in Ukraine.

“Like all growers, they can only recover their costs from the price they are paid,” he said.

The IFA leader said that the analysis contained in the report showed very clearly the intense pressure on primary producers of food in general, but horticultural produce in particular.

Retail price compression had forced many producers out of business and many more will be forced out of business if the imbalance in pricing power in the supply chain was not addressed, he said.

The price compression was due to significant competition from imports, and the growing concentration and inordinate market power of a small number of very powerful retailers, said Mr Cullinan.

Economist Jim Power said that, since 2011, CSO data showed that the average retail price of food fell by 9% in real terms.

Over the same period, overall consumer prices increased by 13%. Over the past 12 months, food prices increased by just 1.6%, while aggregate agricultural input prices increased by 9.2%.

He said the growing market share of the two discounters – Aldi and Lidl – had fundamentally impacted on the price that primary producers received for their produce.

Many farmers had been forced out of business and many more will follow, unless strong intervention in the market occurs, said Mr Power

The EU directive on Unfair Trading Practices (UTPs) was adopted in April 2019 and was transposed into Irish law in April 2021.

It was now essential to set up a National Food Ombudsman with strong powers that will guarantee farmers a fair share of the retail price, he said.

Mr Power said that there was a strong need for a significant rebalancing of power in the food supply chain, to deliver a price for primary producers that would ensure their future viability.

Among the powers given to the ombudsman should be full powers of investigation of margins in the various components of the food supply chain, and a ban on below-cost selling.

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