Supermarkets deny price-capping allegations

By FWi staff

SUPERMARKETS have denied claims that they plan to cap the prices they pay to beef suppliers – backed by a threat to use cheaper imports.

The National Beef Association (NBA) blames the supermarkets for prime cattle prices have starting to slip despite tight supply of finished cattle.

IThe NBA alleges the retailers have told their abattoir suppliers that they will not pay more for beef, no matter what happens to the price of cattle.

This has led to the bigger slaughterers being forced to apply downward pressure to maintain their margins.

To reinforce their point, some of the supermarkets have increased the tension by ordering more, cheaper beef from the Republic of Ireland, claims the NBA.

“Unless finishers can do all they can to resist the phenomenon of so-called top-down pricing, the beef industry will move into a new era in which ex-farm prices are deliberately regularised against the retailers precise gross margin,” said its chief executive, Robert Forster.

If this is the case, not even an acute shortage will give them an upward kick, he added.

But the major supermarkets deny these accusations, saying that they have never spoken to their suppliers about prices in this way.

A spokeswoman from Sainsbury”s said 95% of the beef it purchases is British, with just 5% coming from the Republic of Ireland.

She denied that Sainsburys was increasing imports from Ireland. It would continue to be loyal to British suppliers, despite lower profits than last year: “We will pay whatever the market pays,” she added.

A spokeswoman from Asda was also surprised at Mr Forsters comments, saying that the company was doing its best to support British farmers.

“These comments cant be aimed at ourselves, because the feedback we get from farmers is very positive.”

Asda sources 100% British meat and is looking at a scheme which will guarantee a fixed income to farmers.

The larger meat processors also expressed surprise at the claims from the NBA, denying any pressure from the retailers.

The manufacturing side of the business is slow and the overhang of intervention is strong, said Bob White of Anglo Beef Producers.

The only increase in cattle numbers entering the country is from farmers buying live cattle to finish because of the price difference, said Mr White. He described the claims made about supermarkets then sourcing in Ireland as ironic.

Although deadweight prices have slipped 3p over the past month, this would be expected for this time of year, as supplies of yard cattle dwindle and the grass-fed animals remain hard to find, said Mr White.

He was adamant that he has seen no evidence of the supermarkets refusing to pay any more.

“Its business to buy as competitively as you can. But theyre not digging their heels in,” he added.