Supermarket merger fear for beef farmers

Sainsbury's and Asda are coming under scrutiny (PA)
Sainsbury's and Asda are coming under scrutiny (PA)

FarmIreland Team

The proposed merger of ASDA and Sainsbury's could be bad news for Irish beef farmers as the move is like to put significant downward price pressure on suppliers.

Larry Goodman's ABP is the principal beef supplier to both ASDA and Sainsbury's.

Paul Kelly of Ibec's Food and Drink Ireland predicted "downward price pressure on suppliers" was one of the "likely outcomes" of the merger being approved UK authorities.

The combined entity will have over 30pc of the UK grocery market, with annual sales of £51bn (€57bn) across around 2,800 stores.

The deal, should it get the green light, is targeting savings of £500m (€566m) across the merged business.

Bord Bia confirmed an immediate response and action plan has been put in place following the announcement of the merger.

Bord Bia’s London office have been following up with the main Irish suppliers affected by the merger. In addition, Bord Bia, with support from a number of UK-based retail experts, is set to develop a comprehensive risk and opportunity analysis report on behalf of the industry.  

“We believe each Irish exporter affected by the announcement will require bespoke advice as no two situations will be the same," a spokesperson said.

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"To that end, we are offering one to one guidance and mentoring to companies, whereby we can discuss their particular situation and potential exposure. Bord Bia will work with each company to mitigate any risk and explore all opportunities.

"Bord Bia is liaising with key contacts in Sainsbury’s and Asda to help provide feedback to current suppliers. Feedback from customers to date is very much ‘business as usual’ this is a long process that could take up to 2 years. There is similar feedback coming from suppliers.”

"Both Sainbury’s and Asda have been very supportive of Irish suppliers and continue to be important customers for Irish food and drink".

In March, Bord Bia’s CEO, Tara McCarthy and Minister for Agriculture, Food and the Marine, Michael Creed hosted Sainsbury’s CEO Mike Coupe at their new Thinking House insight centre in London.

This followed an earlier visit by the Sainsbury’s team to Bord Bia’s office in Dublin. Similarly last year, Bord Bia CEO and Minister Creed met with senior representatives from Asda.

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