Tipperary farming: suppliers concerned over Tesco price cut reports

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Tipperary farming: suppliers concerned over Tesco price cut reports

ICSA president Edmond Phelan has described reports that Tesco UK is to demand suppliers drop their prices as "disgraceful"

ICSA president Edmond Phelan has described reports that Tesco UK is to demand suppliers drop their prices as "disgraceful".

The reports claimed that Tesco had given suppliers until July 10 to agree price reductions as it prepared to step-up its price battle with Aldi and Lidl.

“Tesco UK is one of our biggest customers for beef, but once again the power wielded by major retail corporations has been exposed for all to see. Expecting suppliers to cut their prices while they disregard production costs is unconscionable,” said Mr Phelan.

He said that the reported move was particularly galling as it came on the back of bumper grocery sales over recent months.

Tesco UK has reported that while the number of trips made by shoppers fell by nearly one third in the 13 weeks to 30 May, the amount being bought rose 64%.

“This is a real slap in the face for beef farmers and it clearly demonstrates the necessity of having the major retailers present at the Beef Taskforce. Beef farmers cannot produce beef at below the cost of production and expecting farmers to do so is exploiting them, not supporting them. This is the reality that will have to be accepted by all retailers," said Mr Phelan.

The ICSA president said that the lack of solidarity being shown by Tesco UK to their suppliers was staggering, particularly as we tried to navigate the new normal following Covid-19.

"No sector has come out unscathed, but Tesco suppliers have kept going during the pandemic and kept the shelves of Tesco stocked throughout. It is unbelievable to think that this is how they repay them,” he said.

The initial reports said the move by Tesco formed part of its shift to a so-called everyday low pricing (EDLP) strategy, which will see it use fewer promotions.

The July 10 deadline was first reported by industry publication The Grocer, which said a raft of suppliers had told it they faced huge pressure from Tesco to lower their prices.

A Tesco spokesman has been reported as declining to comment on the July 10 date, but had said the group had been speaking to suppliers about its strategy going forward.