Retailers must be fair on beef industry
Robert Forster Chief executive, National Beef Association Sir; Analysis by the English Beef & Lamb Executive (EBLEX) shows that pursuit by supermarkets of modest retail price rises for steak, mince and stewing beef could create a win-win situation for the entire beef industry. For example, for beef mince, an increase in the farm gate price by 10% would lead to a 5.9% increase in retail prices - but only a 1.7% drop in sales. A proportion of the extra £18.9m a year generated could be passed back to beef farmers who are currently selling cattle for substantially less than the cost of production. EBLEX believes that the multiples are missing a chance to increase their own revenues, while being too hard on farmers and jeopardising future prime cattle supplies. It also queries the enthusiasm of many multiples for importing substantial volumes of beef from the Republic of Ireland. The National Beef Association suspects that many retailers order more imported beef than they need to take advantage of its discount and force down the price of UK cattle. The EBLEX studies show that this is counter-productive, as beef sold under an Irish label is less attractive to consumers than home-produced, and import pressure is making it harder for UK farmers to produce the beef that supermarket customers have decided is their first choice. Supermarkets and their shareholders should realise that current retail policies do not maximise the profit to be made from beef and make it harder to guarantee more secure supplies of domestic prime cattle at a later date. More supermarkets could earn a bigger margin per sq ft of shelf space if they concentrated on home- produced beef and gave up bringing in imports that flood the market.