‘Supermarkets who take part in a price war should do it with their own resources’
Supermarkets who take part in a price war should do it with their own resources, according to the president of the Irish Creamery Milk Suppliers’ Association (ICMSA) Pat McCormack.
Reacting to the current French proposal to address below-cost supermarket promotions, the president said that it finally looked as if one EU member state had decided to confront what he termed “the dictatorship of corporate retailers”.
He believes that the Irish Government and the European Commission must follow this example and end the manipulation of margins by corporations that have neither the interests of food producers or farmers at heart.
“Slowly but surely, we’re seeing a realisation that we can’t go on just allowing transnational retail corporations – that have turnovers equal to the budgets of some smaller states – decide our food policy, decide who’s going to be allowed make a living or who’s going to be sacrificed for another couple of hundred million in corporate profits.
“This French proposal may not be perfect, but it at least signals that their state is not going to allow supermarkets to wipe out the margins of those supplying them in order to gain market share.
If supermarkets want to indulge in a price war, then they should do it out of their own resources and not fight to the last drop of farmers’ blood – which is exactly how they do it now.
“The reality is that this can only work at EU level and that means that Commissioner Hogan must step up and legislate – and the ICMSA hopes and believes that that’s exactly what he intends to do,” he said.
Continuing, McCormack explained that everyone would then need to call the “corporate retailers’ bluff when they say that fair margins will cause consumer food inflation, when what they actually mean is that they intend keeping their massive margins and so might have to increase their retail price”.
But they can’t go on selling superb quality food at artificially low prices or using it as a ‘loss-leader’ and wiping out the margins of everyone behind them in the food chain.
“The Irish Government needs to watch this very carefully; Grant Thornton – just days ago – predicted a new price war between the ‘Big Five’ retailers in Ireland and the first casualties in these price wars are the farmers actually producing the food that’s used as ‘ammo’.
“Everyone had better understand that we won’t tolerate that,” the president concluded.