Power report: ‘Author never experienced a supply chain with such lack of trust’

Additional reporting by Breifne O’Brien

The report by economist Jim Power into the Irish beef sector is being released to members of the Irish Farmers’ Association (IFA) – which commissioned the report – today, Tuesday, March 3, and key details are beginning to emerge.

In the report, Power wrote: “The author of this report has never experienced a supply chain with such a basic lack of trust, and this is not a good place from which to build a successful beef industry.”

The report continues: “A collaborative approach to meeting challenges in the sector is essential. This will require a much greater level of transparency, and unless such transparency is forthcoming, from the processing and retail sectors in particular, it will be difficult to make progress and achieve success.”

Power – who is a former chief economist with Bank of Ireland – was retained by the IFA in early 2019 to conduct an examination of the Irish beef sector and to deliver a report.

Power’s report outlines the three main components in the Irish beef supply chain – the farmer-producer, the processor and the retailer – and the relationship between the three of them.

“At the top of this supply chain, retail prices are being compressed by consumer preferences and intense competition from discounters. The processor is being squeezed by these pressures to some extent, but the farmer is at the bottom of the supply chain and is being squeezed to the greatest extend,” the report finds.

Consumer expectations

The report continues: “Beef producers are extremely unhappy with the regulations and standards that they are being forced to comply with, and they believe they are not being adequately rewarded for the efforts they are forced to make to produce a quality product.”

However, this comes up against consumer expectations on food quality, Power highlights.

“The customers for Irish beef insist on high-quality standards, because that is what their customers are in turn looking for. If Irish farmers and processors want to continue to sell Irish beef, they will have to satisfy those requirements, unless the purchasers can be persuaded to change those standards,” the report argues.

Beef farmers lack power in the supply chain, and it is difficult to see how this position can be strengthened. Following the conclusion of the beef talks in September 2019, a number of recommendations were made and actions agreed to.

Power highlighted that “it remains to be seen” how effective these recommendations will be.