Recently a media article focused on price comparison on various brands or types of drinking milk in its consumer pages. The principal conclusion, with the only parameter of assessment of value being price, was that cheapest was best, not the most sustainable.
Quite frankly, what the essentially one-dimensional consumer article and the broad, ‘Irish agri production must be constrained’ narrative of the last two years have demonstrated, is that the mainstream media is not aware of, or listening to, the realities, complexities or economic relevance of Irish agriculture.
But then, the publication which featured the consumer article does not even have an agri correspondent.
Lack of insight on cheap food idea
This lack of informed insight meant that:
- In the context of the drinking milk discussion piece, there was no mention of the differential between branded milk and supermarket ‘own label’ in the sense of the growth in ‘own label’ from 40% to 80% in the last 10 years;
- No mention of the use of drinking/liquid milk by food retailers/supermarkets, a loss leader, and the consequences of this for dairy farmers;
- No reference to the concerns raised by the Irish Farmers’ Association (IFA) about the use of ‘pseudo’ dairy brand names to sell product that competes with farmer own-branded production.
All of these insights would, in my opinion, better inform a consumer information piece on drinking milk or any other food product, that is being used as a loss leader, given that we all know that Irish consumers want more sustainably produced authentic food.
Cheap OR sustainable food?
At one level this type of superficial price comparison article is not unexpected and not really important.
On the other hand, the food industry and farmers have pointed out to anybody who is listening over the last 10 years, that the relentless pursuit of everyday low prices in food is not economically or environmentally sustainable.
Agriculture has also highlighted the fact that concentrated buying power of the big three retailers (Dunnes Stores, Tesco and SuperValu) plus the discounters (Aldi and Lidl) now accounts for over 90% of Irish grocery purchases.
In the 1990s, this increasing concentration and potential for abuse of dominance was constrained by the Groceries Order, and at the time there was also discussion as to whether supermarket market share should be limited to a maximum of say 15% by any single retailer.
Unfortunately this all went the way of unconstrained deregulation/globalisation, which has given us the extreme outcome we have today.
Sustainable food prices
Official figures from the Central Statistics Office (CSO) show Irish food prices fell by 10% between 2011 and 2021, while Irish inflation costs were on average up 8%.
So food prices went down by 18% in real terms.
No business, never mind a food business, can keep going where its product is continually sold below production costs.
Indeed, by law, we know that our mobile phones, laptops, pharmaceutical drugs, electricity and gas, and our newspapers cannot be sold below cost.
So, unlike what we have heard over the years, the food sector is not looking for special treatment, but simply sustainable modern economy pricing.
Climate
The agri sector, which still accounts for one job in eight in the Irish economy, also deserves some well-informed joined-up thinking, not only on price, but also when it comes to commentary regarding climate change and climate regulation.
Indeed, climate change and all its challenges, requires a mature discussion of the meaning of value and price and income and economic impact.
Over the last 20 years or more, post-BSE and foot and mouth disease in particular, the cost of producing food in Ireland and across the EU has seen ever increasing regulatory costs, usually imposed in the name of consumer safety.
The EU Green Deal, notwithstanding some recent noises around consideration of food security, would impose even more cost in the name of sustainability / climate action.
Ever decreasing food prices are clearly not sustainable against a backdrop of ever increasing costs.
The ‘debate’ around the sustainable future of Irish and EU food production can’t simply be the same old story of ‘cheaper again next year’.
For real debate about the future of food and agriculture to be meaningful and balanced, we need our most important public commentators to be fully informed.
We are very aware of the major economic own goal our neighbours in the UK sleep walked into with Brexit. We mustn’t do the same with food and agriculture in Ireland.