Supermarkets were warned yesterday by the Irish Farmers' Association President, Mr Tom Parlon, that they were endangering the safety of Irish food by forcing down producer prices.
In his address to the organisation's a.g.m. in the Burlington Hotel, Dublin, he said farmers were committed to producing safe food from a clean environment adhering to best practice.
"But let us be equally clear; producing safe food and adhering to best practice are being made far more difficult, if not impossible, by the relentless downward pressure by the supermarkets on food prices." Supermarkets had introduced what he called "predatory pricing" to attract customers, cutting milk prices to lower than bottled water. They had cut bacon prices by a third and the price of a head of cabbage was cut last week from 69p to 9p.
"I want to say to the supermarkets today: you cannot have it both ways. As farmers we want to commit ourselves to the highest standards which require traceability and costs. Time and again, you undermine our commitments to best practice, devaluing food as a loss leader to inflate your profits.
"It is disingenuous of supermarkets to pretend that endless cut-price campaigns and predatory pricing on suppliers and farmers have not had any effect on practices at processing level, at farm gate and within the animal feed industry," he said.
"The origin of BSE in the UK is a matter for research by scientists. But economically, there is no doubt that BSE has arisen from the constant hammering down of food prices and the ever declining share farmers receive of the price paid by consumers." Mr Parlon said the time had come for the supermarkets and multinational retailers to remember that safe food, high quality and best practice came at a price - a fair price to farmers.
Mr Parlon said he was setting a target price of 110p per gallon of milk, including VAT, for the producers, which left the co-ops a processing margin of 15p per gallon. He warned Glanbia, which processes one-quarter of all milk, that its price of 107p per gallon was too low.
Mr Parlon said the Competition Authority showed no understanding of the unequal balance of power in the food marketing chain. Instead of tackling individual milk producers, they should tackle the predatory pricing tactics of the retail giants.