Surging discounted steak sales: ‘I’m at a loss to work out how it works for us farmers’

An announcement that the sales of steaks in Tesco outlets have “rocketed” by 40% during the Covid-19 lockdown has been highlighted as a clear reflection of the chaos that has reigned in the beef sector in recent months by the Irish Creamery Milk Suppliers’ Association (ICMSA).

Commenting on the matter, ICMSA president Pat McCormack said that no single piece of data illustrated the dysfunction of the Irish beef system so vividly as the data released by Tesco yesterday, Tuesday, June 30.

This, he noted, showed a massive demand surge for steaks when the food-services side of the trade collapsed.

“Farmers will be fascinated to read of how Tesco – after it became aware of our dilemma – ‘offered to help suppliers’ by putting those steaks on ‘discounted sale’.

With all due respect to the Tesco spokesperson, and translated back from corporate-speak, what actually happened here is that Tesco purchased the cuts that were going to the food-service at prices that [allowed it] to sell the steaks onto its customers at a low price – and still make a margin.

“There’s nothing wrong with that, but the idea that this was some kind of rescue mission for the beef sector is a little flimsy. Has the price farmers receive for their beef surged by 40% – or 20% even? Absolutely not.

“Obviously we don’t want to appear ungrateful, but if Tesco’s answer to the problems of Irish beef farming is that we sell to it at low prices and it sells onto its customers at low prices, then I can see how that works for both Tesco and its customers – but I’m at a loss to work out how it works for us farmers,” McCormack said.

The fact is that we farmers have been subsidising the price of top-quality food for decades and if Tesco’s analysis is that we can go on doing that – or even subsidise it more – then ‘thanks, but no thanks’.

“If Tesco wants to sell steaks at a discount then it can go right ahead and take the discount out of its margin – but we are absolutely not going to fall for this one anymore, where we are told that the way to build demand is by the farmers – and the farmers alone – subsidising the discounted retail price.

“I’m afraid that Tesco – and anyone else who likes that idea – is going to have to think again,” McCormack asserted.

Noting that food retail sales had rocketed by €629 million to the three months to June 14, McCormack said that if retailers are serious about supporting the primary producer then a bigger proportion of the increased margin made during the Covid-19 should be passed back through the supply chain.

Such a move would be real support for primary producers, the president concluded.

Image source: Carnivore Style.