Supermarkets putting squeeze on veg growers, says new survey
Published 18/02/2010 | 05:00
CONSUMERS are paying massively inflated prices for food while suppliers are being squeezed to the wall by the supermarkets, a new survey has found.
Shoppers are being asked to pay up to five times the price of basic foodstuffs, with, for example, a tonne of potatoes retailing at up to €1,600 even though growers get just €360 per tonne.
The survey also reveals that suppliers are being asked to hand over "Christmas money" to supermarket buyers, make payments in kind and foot the bill for special offers.
Among the payment practices complained about by fruit and vegetable growers in the survey of fresh food suppliers by Fine Gael were:
- Rebates of 2.5pc to 5pc to the buyer after every monthly payment
- Extra payments by growers to cover special offers from 10pc to 30pc
- Personal payments and payments in kind to buyers, including "Christmas money"
- Long-term credit for buyers ranging from four to 11 months
- Cost of last-minute cancellation borne by grower
The survey of 30 vegetable growers supplying Ireland's major supermarket chains claims the multiples are holding them to ransom by threatening to replace their products at the last moment with cheap imports.
The survey, carried out by Fine Gael horticulture spokesperson Andrew Doyle and seen exclusively by the Irish Independent, found that with supermarkets now controlling 88pc of the market for fruit and vegetables, growers have little option on where to sell their produce.
Supermarkets and their middlemen -- who set prices based on imports which are dumped on the Irish market -- are threatening to delist suppliers if they do not match these, using the low price of sterling as a bargaining chip.
They use cut-price fresh produce to lure shoppers in, but give growers no floor price or any warning of price reductions, the report claims.
Growers say imported fresh produce is not always labelled to allow consumers see where it comes from, while state grants have even gone to middlemen to buy fridges to store cheap foreign imports.
Many growers were terrified to go public with their claims, even anonymously, for fear of losing sales, and some said the supermarkets imposed secrecy conditions, with one grower having received a warning from a retailer.
Growers warned that the relentless pressure would drive them out of business and end homegrown produce in Ireland.
"It's either match the price of English vegetables and salads or no supply, even if it is below cost. This should not be allowed to happen but we are the target and so they can hold you to ransom," said one supplier.
One potato grower said he was paid €360 per tonne, but 2.5kg bags are effectively priced at €1,600 per tonne in shops.
Mr Doyle said Irish consumers were happy to support fair trade products such as bananas and coffee from other countries, but Irish suppliers also needed a fair deal if they were to survive, as it was the supermarket rather than the consumer who was benefiting.
"Consumers naturally want the cheapest price but when all the local growers have gone out of business and the importers have a monopoly, the consumer will be paying the unfair burden of cost," he said.
However, Retail Ireland director Torlach Denihan said the survey was too small to be representative. He said it ignored the fact that most supermarkets obtained fresh produce through intermediaries.
"The volume of food sold in Ireland is down, a large number of jobs have gone in retail, and everyone is feeling the pain, it's not just growers," he said.
Irish growers supply around €380m of fruit and vegetables a year, with a retail value of €1.2bn, and more than 6,000 people are employed in the sector.