Although UK consumers will be happy to hear that Tesco has cut the price of food products, the move has sparked concern from farmers who fear it may impact on farm gate prices.
Market analysts believe Tesco is cutting prices in response to falling profits brought about by tightened household budgets and the rise of discounters Aldi and Lidl which have eating into the supermarkets market share in the UK. A phenomenon with has also been seen in Ireland.
The National Farmers Union (NFU), responding to Tesco annual financial results, said it is concerned at the recent levels of price cuts on staple food items in the retail sector.
It stated: “We are maintaining regular dialogue with Tesco’s to ensure that any price cuts or promotions are not making their way back to the farm gate. We will continue to monitor the situation closely.”
Labelling is also a key issue For the NFU. It commented: “With regards to the growing channels in convenience and online shopping, the NFU will continue to encourage the sale of British produce being sold through these mediums and lobby for point of sale and advertising messages to be clear on origin for the consumer.”
Launching today’s price cuts David Wood, UK Marketing Director at Tesco said: “I’m absolutely delighted we can do this for our customers. We never stop thinking about how to make their lives better and easier, and these new lower prices on every day products will really help families on a budget.”
New consumer research carried out on behalf of Agri Aware by Ipsos MRBI here in Ireland revealed strong support among the Irish public for new legislation to ensure that farmers receive a fair price from supermarkets, for the food that is sold here.
The Agri Aware survey came after some of the country’s leading supermarkets waged a vegetable price war in the run-up to Christmas. Retailers sold produce, including carrots, onions and potatoes for as little as 5 cent per kilo. The promotion sparked fierce criticism from the IFA and others.