ICMSA president Pat McCormack: major beef with Tesco over discounted steaks
The Tipperary president of the ICMSA, Pat McCormack has taken issue with supermarket giant Tesco over its claims it had come to the aid of farmers by buying up stock destined for closed restaurants and food outlets during the Covid-19 lockdown.
Mr McCormack said that the announcement by Tesco that the sales of steaks in their outlets had “rocketed” by 40% during the lockdown was "very interesting, but not for the reason that Tesco imagined".
He said that no single piece of data illustrated the dysfunction of the Irish beef system so vividly as the data released by Tesco on June 30 which showed that a massive demand surge for steaks and which presented the corporate retailer as, according to Mr McCormack, “riding to the rescue” of farmers when the food services side of the trade collapsed.
Farmers will be fascinated to read of how Tesco,after they became aware of our dilemma, ‘offered to help suppliers’ by putting those steaks on ‘discounted sale’, said the Tipperary Town farmer.
"With all due respect to the Tesco spokesperson and translated back from corporate-speak, what actually happened here is that Tesco purchased the cuts that were going to the food- service at prices that there were able to sell the steaks on to their customers at a low price and still make a margin. There’s nothing wrong with that, but the idea that this was some kind of rescue mission for the beef sector is a little flimsy. Has the price farmers receive for their beef surged by 40%. Or 20%. Absolutely not,” said Mr McCormack.
He said that while ICMSA did not want to appear ungrateful, but if Tesco’s answer to the problems of Irish beef farming was that farmers sell to them at low prices and they sell on to their customers at low prices, he was at a loss to work out how it worked for farmers.
"I can see how that works for both Tesco and their customers," he said.
Mr McCormack said that the fact was that farmers had been subsidising the price of top quality food for decades and if Tesco’s analysis was that farmers can go on doing that - or even subsidise it more - then "thanks, but no thanks".
"If Tesco want to sell steaks at a discount then they can go right ahead and take the discount out of their margin, but we are absolutely not going to fall for this one anymore, where we are told that the way to build demand is by the farmers - and the farmers alone - subsidising the discounted retail price. I’m afraid that Tesco and anyone else who likes that idea is going to have to think again”, said Mr McCormack.
Noting that food retail sales had rocketed by €629m to the three months to June 14, Mr McCormack said that if retailers were serious about supporting the primary producer then a bigger proportion of the increased margin made during the Covid-19 should be passed back through the supply chain.
Such a move would be real support for primary producers, he said.