ICMSA says food price war is an ‘acid test’ for newly-established regulator

ICMSA PRESIDENT Denis Drennan has said that last week’s announcement by a supermarket chain of reductions of up to 28% on dozens of food items presents the Food Regulatory Office, established last year, with its first real test.

Mr Drennan said that the onus is firmly on the newly-established office, An Rialálaí Agraibhia, to verify ‘absolutely’ that any reductions in price introduced by supermarkets are funded out of their own margin and not simply passed back to be borne by the farmer primary-producers through drastic and unilateral reductions in the prices paid to them.

He added that the office had been established at the suggestion of farmers and with the support of Minister McConalogue specifically in response to repeated instances where highly publicised retail price reductions and so-called ‘supermarket price wars’ were actually seen to have been funded by the supermarkets via the expedient of drastically cutting the prices paid to the links in the supply-chain behind them.

Mr Drennan said that farmers had absolutely no issue with supermarkets reducing their own margins, but would not and could not accept a situation where the farmers – already the recipients of the lowest margins for the most work – were simply manoeuvred into having their margins cut so that they ended up subsidising rounds of competing price cuts by retail corporations. ‘This agency was established last July with much fanfare. We have heard little of it since,’ he said.

‘This is their first chance to show the farmers – and the utterly dominant supermarkets – that they actually intend doing the job they were set up to do. Transparency is one of its key roles and it needs to provide clear information on who is carrying the cost of these reductions. This is the acid test; they are either going to show that they are committed and take their job seriously, or they join the herd of ever-increasing herd of quangos and state agencies who exists to no discernible purpose,’ said Mr Drennan.