Asda price cut will not hit farmers
14 March 2000
Asda price cut will not hit farmers
By FWi staff
SUPERMARKET chain Asda insists farmers will not see farmgate prices slashed to fund cuts in its retail price of British beef, poultry, pork and lamb.
The retailer is to cut the prices of some of its traditional cuts of British meat by up to 27%. But it said the price it pays to farmers will remain the same.
The National Farmers Union welcomed the move, but said it would keep close tabs to ensure Asda delivered on its pledge not to pass on costs.
All 233 Asda stores dropped the price of cuts in an attempt to reverse a decline in sales in the 14m Rollback scheme which began Monday (13 March).
The price of lean topside of beef was cut from £6.49/kg to £5.49, while a boneless pork leg now costs £2.59/kg instead of £3.28.
The price of lamb breast falls from £1.99/kg to £1.44, and a 2.2kg roaster chicken is selling for £3.99 instead of £5.49.
Angela Spindler, Asda meat and produce director said: “The last year of Rollback has proven that where you sell for less you sell more.
“Through Rollback we have created a virtuous circle of great value driving volume sales — this benefits suppliers, retailers, and customers alike.”
“The huge increase of Rollback has helped draw almost a million extra customers into our stores.
“It is this increased business that has enabled Asda to invest £14m worth of margin into lowering the price of meat — the only change the farmer will see is increased customer demand.”
An NFU spokeswoman said: “The NFU welcomes any promotional initiative which provides British consumers with the opportunity to buy home-reared meat.
“We welcome the assurance that the cost of the promotion will not be passed on to the farmer, and expect ASDA to deliver on this.
“British farmers need more general assurance like this to ensure the livestock sector can continue to deliver to retailers and consumers.”
Pork purchases fell 9% in 1999, lamb and mutton purchases dropped 3% and poultry sales fell 6%, according to official statistics. Beef purchases were static.
A Competition Commission inquiry into supermarket grocery prices is due to talk to supermarkets this month about pricing and their relationship with suppliers.
Last year, Asda denied that a £68m round of price cuts was a smokescreen to divert attention from the then imminent inquiry.
In November, farmers threatened to take Safeway to the Competition Commission after it asked suppliers for £20,000 per product line for promotion.
The NFU has since secured assurances that producers who choose not to participate will not be penalised.