The National Beef Association has told the Office of Fair Trading that retail prices for beef must rise significantly after January 1.
In a letter to the OFT, NBA chairman Robert Robinson said that with subsidies decoupled from production, farmers would no longer be able to underwrite the retailers’ price wars.
He said: “It is impossible for UK beef farmers to bridge the gap between 300p per kilo production costs and an average market income of just 180p per kilo. We are convinced that after decoupling multiple retailers would like to call a price war truce on low value agricultural products like beef.
“But if a company lifts prices on its own it will be shot down by its competitors and if each supermarket raised its prices at the same time they would all be clobbered by the OFT.
“We think it is time for the OFT to reappraise the situation,” Robinson argued.