Irish Minister outlines duty of food retailers to suppliers

Posted by Daniel Palmer on 3rd August 2009

Ireland’s food retailers have a “responsibility” to support a “viable” Irish food processing sector, the country’s agriculture minister has argued.

Brendan Smith said multiples must look to provide a “fair return” to suppliers in Ireland where, in recent months, producers have claimed they are being used as “cannon fodder”.

Speaking at an agriculture industry conference at Dublin Castle, Smith claimed retailers had a duty towards their suppliers.

“While acknowledging that retailers must strike a balance between value for consumers and a fair return to suppliers and producers, this cannot be done at the expense of a viable agri-food sector, such as we are fortunate enough to have in this country,” Smith said.

The minister argued that “concentration” at retail level had “fundamentally changed” the balance of power in the food supply chain. “[It is] one factor behind the declining share of retail prices passed to agricultural producers,” Smith said.

The Irish government, he added, is looking at the possibility of a “code of practice” to oversee the relationship between retailers and suppliers.

The recession has meant that the Irish retail sector is now one of the most competitive in western Europe. In recent months, Tesco, Aldi, Lidl and Musgrave Group have all slashed prices.

The moves have already drawn heavy criticism from manufacturers and farmers. Irish Farmers Association president Padraig Walshe has accused Tesco of using Irish meat, milk and vegetable suppliers as “cannon fodder”, while local industry body Food and Drink Industry Ireland also voiced its anxiety about the state of the Irish food retail sector.

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