IFA President Tim Cullinan has said that the Government should move quickly to restore the ban on below-cost selling of food. He made the comment when launching economist Jim Power’s report, tiled Retail Price Compression Threatens the Viability of Irish Horticulture, yesterday.
“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 The most recent National Field Vegetable Census, which is now out of date, showed that the number of field vegetable growers fell from 377 in 1999 to 165 in 2014, a reduction of nearly 60%.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,” Cullinan said.
The report highlights the intense pressure on primary producers of food in general, but horticultural produce in particular. Retail price compression has 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 is not addressed.
The price compression is due to significant competition from imports, and the growing concentration and inordinate market power of a small number of very powerful retailers.
Power explained that since 2011, CSO data shows 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%.
The EU directive on Unfair Trading Practices (UTPs) was adopted in April 2019 and was transposed into Irish law in 2021. It’s thought that it is now essential to set up a National Food Ombudsman with strong powers that guarantees farmers a fair share of the retail price.
A call has been made for a rebalancing of power in the food supply chain, to deliver a price for primary producers that would ensure their future viability. This should include a ban on below-cost selling.