Supermarkets were given “whip hand over British beef”

Friday 20 March, 1998

By Farmers Weekly staff

PRODUCER clubs have given supermarkets an “uncomfortable grip” on British beef farming, aiding the relentless quest of those stores for total control of the industry, according to Cumbrian farmer John Geldard.

He also feared the ongoing purchase of abattoirs by supermarkets would ultimately undermine producers margins. A co-operative approach by auction markets was a safer alternative, he believed.

Speaking at a National Cattle Association meeting in Kendal, Mr Geldard said supermarkets should address the way they were sourcing and retailing beef.
“Tesco has said that despite being on target for a profit of over £2 million a day they are not making any money out of beef.

“Why can local butchers constantly outbid supermarket buyers for best-quality prime cattle, sell that beef for less than supermarkets and still make a living? The supermarkets stance on beef just does not stack up.”
However, “continuity of quality commodity” was a greater priority for supermarkets than buying price.

Beef producer clubs and other marketing partnerships met that need, but Mr Geldard was wary of the security such ventures appeared to offer farmers. They could shut the door on other, more lucrative markets.

“Beef farmers are very gullible at the moment. Think back to 1992. When the beef export trade opened up after the financial upheaval of black Wednesday, supermarkets were out-bid by exporters.”

Mr Geldard claimed auction marts were absolutely crucial to achieve best possible prices for beef producers.

He had sold around 80 head of cattle through two markets over the last seven weeks and on only four occasions had he returned home with an empty wagon.
“Producers should make a realistic assessment of the value of their stock on the day and assist the auctioneer to achieve it.”

But farmers should not sell if the price was too low. “No one likes bringing cattle home but everything has a fair market value even in these difficult times.”

Mr Geldard believed individual auction marts could work together to form regional collection centres.

“If supermarkets own the abattoirs producers will be restricted to selling to one or two buyers. That is unacceptable.

“We must look at devising a system, based on our auction marts, where an astute marketing manager would source and sell directly to major retail outlets with stock meeting a tight specification on a year round basis.”

Clifford Kendal of Kendal Auction Mart believes progress will be made. “A closer working relationship between auction marts is going to have to happen and it will bring benefits to livestock marketing.”

  • For this and other stories, see Farmers Weekly, 20-26 March, 1998

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