NPA voices concern over supermarket wars

UK - Concerned by reports of retailers putting unreasonable pressure on processors, NPA chairman Stewart Houston has arranged meetings with the big four retailers, writes Digby Scott.
calendar icon 24 July 2007
clock icon 3 minute read
"What happens in a tightening market is that shortage of product creates a rise in price – and I want an assurance that’s what will happen in this country," said Mr Houston.

"Producers are going to need a price rise pretty soon to cover higher feed costs that equate to about 11p/kg. But our case isn’t helped by the fact that the retailers have just gone into another of their price wars, and when that happens we know it isn’t their bottom line that is hit, but ours and the processors," he said.

He told NPA Producer Group that on a recent visit to an Asda store the labelling had left something to be desired. "The blue label looked the same, but some contained British pork and some French."

Asda has put its pork suppliers on notice that it will be expecting them to cut their prices, so that it can win its current price battle with Tesco.

Loss leader
Mean while, Northern Ireland's pig producers are fearing that the major multiples are using pork as a loss leader. Pig producers are to meet retail chiefs in a bid to avert melt-down in the industry.

Ulster farmers reckon they need 110p to break even, compared to their current average price of 97p.

They met processors last week in a bid to find out just how much pressure is being exerted by the supermarkets to use pork as a loss leader in retail promotions. The Ulster Pork and Bacon Forum has said it will now consult with the rest of industry before having face to face meetings with retail chiefs.

The Ulster Farmers Union will also have meetings with supermarkets, explaining that feed wheat and barley prices are almost 40 percent higher than last year.

They will explain that pig producers face a sustained period of higher feed costs and farm gate prices will have to rise to account for this. UFU says that retailers must look urgently at this serious situation and show pig producers that they mean what they say when they talk about their commitment to local food supplies and local farmers.
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