Calls for investigation into processor and retailer margins in supply chain

Minister for Agriculture, Food and the Marine, Michael Creed, has been called on to establish a statutory commission of investigation into the beef sector to establish processor and retailer margins along the supply chain by the Irish Farmers’ Association (IFA).

This follows IFA investigations finding that “it is not be possible to definitively determine what the processor and retail margins are “without access to processor financial data”.

Calling on the minister, IFA president Joe Healy said that the terms of reference would have to be agreed with farmers, but the commission should have full access to the books of the meat processors and be able to establish what they are paid for each part of the beef animal.

“Full transparency on the price along the chain must be an essential element of the investigation,” he said.

If this was done – alongside a price commitment from the factories and an assurance from Minister Creed to put a Brexit support scheme in place for all farmers who sold cattle after May 12 – it could provide a basis for a resolution to the current stalemate, Healy said.

The commission must also be able to verify if certain specifications are being demanded by retailer customers and if this justifies these being applied in respect of cattle prices, according to the IFA.

It should look at what is going on with factory-controlled feedlots and how these are being used to manipulate cattle prices.

Continuing, Healy said the commission must have the power to compel witnesses to appear and should also get access to financial information from processors and retailers to establish the profit margin they are making from beef.

“A number of months ago, IFA engaged economist Jim Power to investigate some of these matters.

While he has made a progress on many matters, it is clear that, without being able to access financial data from the meat plants and retailers, it is not be possible to definitively determine what the processor and retail margins are.

“With the statutory powers of a commission of investigation, if the Government moved on this it should be able establish answers to these questions relatively quickly.

“Farmers are entitled to know the truth about who is making what from their cattle in the beef supply chain,” he said.

“The report of the commission could form the basis of a new price transparency index which would provide on-going data on margins in the sector.

“If we are to establish any trust between farmers, processors and retailers, this is a necessary first step,” Healy concluded.