FOOD PRODUCERS have called for a code of practice for supermarkets in Ireland. The Irish Farmers' Association (IFA) said that, to be effective in eliminating abuses by supermarkets, the code must be established on a statutory basis and enforced by a properly resourced ombudsman.
It said these measures were needed to redress the imbalance of power in the retailer/ supplier/producer chain which threatened the Irish food industry.
In a detailed submission to Tánaiste Mary Coughlan, who is Minister for Enterprise, Trade and Employment, the organisation said the retail concentration in Ireland was extremely high.
"Just three retailers, Tesco, Dunnes and SuperValu/Centra are controlling over 70 per cent of the grocery market," said IFA president Pádraig Walshe.
He said the code of practice must address the imbalance in the supermarket/supplier/producer relationship which threatened the Irish food supply chain by placing unsustainable negative price pressure on suppliers and primary producers.
He said there was a real urgency for regulation of the supermarket grocery sector, which was clearly abusing its dominant position in the food chain, with the result that farmers were being forced to accept prices below the cost of production.
He highlighted the example of a litre of milk costing 95c, where the farmer price is only 24c, which was below the cost of production. The processor got 41c and the supermarket was taking 30c, a share way above the costs it incurred.
He said the code of practice must enshrine the principle of fair trade in the grocery sector, outlaw below-cost selling and predatory pricing, and provide a means for a more equitable share-out across the food chain of the consumer price.
The legislation must deal with the threats of delisting and other strong-arm tactics used by supermarkets that compel suppliers to fund price discounting.
Mr Walshe said the UK experience proved a voluntary code would not work, and Ireland should not go down that road.
The code should also enshrine the principle of fair trade in the grocery sector and ensure retailers generate profits from selling products and providing value rather than "through buyer income and the abuse of excessive power". The IFA, he said, also wanted to outlaw arbitrary payments outside agreed products.