Wednesday, July 7, 2010

Hey ho, the supermarkets are at it again

Last week we heard how Ireland has the second highest food and drink prices in the EU. This week it's becoming clearer why. If farmers are barely scraping a living and we're paying way over the odds for our groceries, who exactly is getting the fat in the middle? Eurostat's figures showed that what we pay for food is 29% higher than the EU average. Ireland recorded the highest prices in Europe for dairy produce such as milk and cheese, and despite being the biggest meat exporter in the northern hemisphere - we are still paying the fifth highest meat prices of the 27 countries surveyed.

In an investigation just published, it turns out that the high prices we are paying are the result of multi-national chains abusing their dominant position, poor information on special offers beyond local markets in the EU and the slow growth of e-commerce. The EU commissioner Michel Barnier has just revealed the results of a new study along with the promise to introduce new rules on food retailing in the autumn. Half of all retail in Europe is grocery and is dominated by the big multi-nationals such as Tesco and Carrefour. The report found that prices can vary hugely for products, even for the same product in different outlets that belong to the same supermarket. Barnier's report also found that Ireland is still wrapping its food in huge amounts of expensive packaging, up to six times as much as the lowest member state.

It's always been the case that there has been a disconnect between what food is worth to food producers and what we consumers pay for it. In some cases the contrast is actually offensive to farmers; rendering a unit of production (a beef heifer etc) just not worth rearing by the time you've paid your costs. Many farmers can barely break even, such is the power of the mulitples. Time and time again during the writing of our book and continually still, I am being contacted by farmers who are having terrible treatment at the hands of the multiples, few will give their names as they are terrified of being blacklisted. Especially as summer time is fruit season, it unfortunately coincides with many sad tales from fruit growers. One farmer told me last week how a retailer refused his strawberries even though he had matched the price of their imported product from Chile. Then the supermarket insisted that the farmer collects any unsold product and waste and pays for its disposal. They refused to sell it at a discounted rate, he said they simply couldn't be bothered.
Roll on some proper supermarket ombudsman legislation, transparency of their profit margins, and codes of practise which must insist on fair treatment of producers. I spoke to an Oireactas Committee about this last May, the legislation is in consultation phase, I just hope they get it out into the marketplace to protect both farmers and consumers as quickly as possible.
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