Vegetable supplier says Tesco ruined it

TESCO HAS has been blamed for the demise of the State’s only large-scale vegetable co-op after it withdrew its business just two months after Dublin Meath Growers (DMG) opened a new €5 million facility to meet demand from the multiple.

Employment at the co-op dropped from 80 to just two or three voluntary members after Tesco pulled out earlier this year, the Oireachtas Joint Committee on Enterprise, Trade and Employment heard yesterday.

Colm Warren, a member of the co-op, claimed the reason Tesco rejected DMG was because it was known to be fully supportive of Irish growers.

He accused the multiple of being “totally ruthless” and said its actions cost DMG more than €600,000 in outstanding obligations to individual growers.

His claims were rejected last night by Tesco, which said that DMG had lost out legitimately to a competitor after the business was put out to tender among six companies, including the co-op.

A spokesman said Irish farmers, who had been supplying DMG, were not affected by the new arrangements and Tesco continued to have a strong relationship with vegetable growers.

Mr Warren told the committee that the system Tesco put in place to replace supplies from the co-op “beggared belief”.

He claimed that, after Irish growers sent their produce to a distributor in Swords, it was then sent to Northern Ireland for processing, before being returned to north Dublin for distribution to Tesco stores.

Tesco said 99 per cent of produce from Irish growers was processed and distributed entirely within the Republic; broccoli was processed in Northern Ireland because the only modern grading machine in Ireland was there.

Mr Warren told the committee he wasn’t motivated by revenge, but wished to show what had happened to DMG was a symptom of the “disease” now affecting the retail sector. Unless the predatory activities of the huge retail conglomerates were stopped, there would be no development of Irish horticulture.

“How many job losses have already occurred as a result of this insatiable rush to get more margins? Who are the losers? The unemployed, the Government, the decreasing number of employed and the consumer, all subsidising the predatory nature of these supermarkets.”

Ireland would be lucky if one-quarter of the 300 remaining commercial growers were left in two years, he said.

Chairman of the IFA vegetable growers committee John Dockrell told the committee the sector was facing disaster as a result of the high costs of production, bad weather, credit difficulties and the demands placed on growers by retailers.

Because of the sustained discounting of fresh produce, vegetable growing was now at an unsustainable level and the viability of all grower and packing operations was critical. Persistent bad weather had nearly paralysed the sector over the past years, he said; in that time, for example, he had lost 50 per cent and 65 per cent of his spinach to bad weather in consecutive years.

David Keeling, of Keelings Fresh, told TDs and Senators that the current business environment was very challenging. The biggest cause for concern was the relative cost of doing business compared to the UK. Minister of State for Food Trevor Sargent said he favoured a statutory code of practice for the grocery sector as well as the appointment of a supermarket ombudsman.

Committee chairman Willie Penrose also backed a statutory code and said the committee planned to invite the six-main retailers to a one-day conference as part of its continuing investigations into practices in the sector.