Beef sector hits out at Office of Fair Trading

The National Beef Association has joined the dairy industry in criticising the Office of Fair Trading.

The organisation says the OFT takes too narrow a view of the market  for primary agricultural products.

“The OFT insists that the Competition Act of 1998 and the Enterprise Act of 2002 must remain its focus so it can prevent supply chain abuse of competitive principles,” said NBA chairman Duff Burrell.

“However it is ignoring the inevitable narrowing of consumer choice if UK beef farmers continue to sell slaughter cattle for 25-35 per cent less than the cost of production because there has been no adjustment to the radical changes forced on the supply chain through CAP reform.”
The NBA wants the OFT to acknowledge the changes forced on UK production through subsidy decoupling and accept that consumers need protection from market forces.

It points out if the market is left unchecked, it will soon deprive shoppers of product choice and impose a damagingly restrictive range in retail selection.

“We firmly believe that the OFT’s current position, which stamps hard on any post-decoupling effort to sustain domestic production through
revised attitudes to ex-farm prices, is against consumers’ long term interests and will undermine national food security unless it is modified.”

According to the NBA only a significant re-alignment of the retail price, in conjunction with an equally significant drop in production costs, can guarantee future deliveries of UK beef at volumes close to current levels.

“The advantages of these to UK consumers are security of product provenance and guarantee of a range of choice but the OFT appears to
have no wish to protect these,” said Mr Burrell.

Mr Burrell said the OFT should be examining whether top down pricing, the situation in which a retailer can tell a processor that no matter how much he has to pay for cattle it will not pay him any more for beef is an abuse of power.

Producers should not be victims of price-adjustment practices which force them to take a substantial loss while short term consumer interests are protected, he added.