an editorial supplement to The Grocer Growing Irish roots Supermarkets say their businesses produce a win-all situation - for themselves, the supplier and consumer. But there are dissenting voices. Anne Bruce reports The arrival of British multiples in the Irish republic and northern Ireland is bringing a new order to the retail scene across the island. But are incoming supermarket groups playing a part in boosting suppliers' business and promoting trade with mainland Britain, or is Ireland just a fresh battleground for British supermarkets to beat out unequal deals with suppliers? Tesco Ireland, like the other British retailers, are keen to put down Irish roots. It tots up customers' Irish purchases, telling them how much they have spent and how much of that was on homegrown brands, and other chains such as Sainsbury and Safeway insist that they help local suppliers get listings there and in the UK. But some are not convinced. Bryan Gray, chief executive of the Northern Irish Independent Retail Trade Association, believes the multiples have a lot to answer for. "With 85 superstores, the market in the north is already saturated. Tesco and Sainsbury are eroding Irish brands with own label alternatives, changing the market to suit themselves." And according to Gray the multiples, with their economies of scale, have not been good for Irish producers across the island. "The big supermarkets have closed a lot of suppliers. Those they source from have been squeezed on price even as volume increases, so profit remains static or drops. The farming community has been screaming blue murder about Tesco and Sainsbury, as they don't stock local produce in the north ­ only 5% of their lines are local. They are eroding Irish brands." And in the south, Ailish Forde, director general of independent retail group RGDATA, says the big multiples are not persuading consumers of their place in the community. "The Irish consumer demands locally sourced produce, and with the dispersed nature of population centres, is typically loyal to small local grocery businesses. Independents have a 47% share of the market, while Tesco in its fourth year has dropped market share, I think that says it all." But the multiples would argue otherwise. Tesco is doing particularly well with a 22% share of the Irish republic's market. It also sources more than 55% of its produce from Irish growers, distributing to its Irish portfolio through a central depot in Dublin. It bought £835m worth of produce from Irish suppliers in 1998/9 and is on target to source £997m purchases in 2002. Some 120 southern Irish companies have been signed up to supply own brand produce, which it says is a win-win-win solution for its business, suppliers and the consumer. Sara Morris, corporate communications manager of Tesco Ireland, says: "Contrary to what is often assumed in Ireland, being a supplier of own brand goods to leading retailers is not a sort of commercial handcuff'. Good steady margins are achieved and producers are free to develop goods for competing retailers as well as their own branded products in tandem with what they are developing for Tesco." Sainsbury says it sources locally wherever possible. Phil Barnes, head of regional sourcing, insists: "Customers want to buy their local foods from their local store. We are making the link between local suppliers and our customers. The increase in production creates more jobs in the local food industry." And Safeway, which has 12 stores and a distribution centre in Northern Ireland, is now to step up its focus on local produce. Peter Darroch, area manager for Safeway Northern Ireland, says: "We see ourselves as a partner for local suppliers in a broad sense. Our aim is to provide our local customers with the best value, best quality products available and we know local companies can deliver this." Many Irish producers believe they have fared well in the new market conditions. Irish Yoghurts, in West Cork, illustrates how a small Irish supplier can thrive in the republic's changing retail climate. Md Diarmund O'Sullivan set up the company in 1994, to supply the domestic market with traditional style yogurt. Seven years on, growth has exceeded expectations, and 55 lines are on sale across the republic, in the UK, and as far afield as Saudi Arabia and Dubai. Tesco especially has been instrumental to the sales lift off. O'Sullivan says: "The acquisitions of Quinnsworth by Tesco really started the ball rolling for us. We were initially listed in 50% of Tesco Ireland stores in 1998 as we used to supply Quinnsworth with an own brand yogurt. Then we won in the dairy category and the overall award at Tesco Ireland Irish Food and Drinks Awards in June 1998, and we went into 200 stores in the UK. We are now listed in all 700 hundred UK stores and across southern Ireland. Turnover is doubling year on year." Meanwhile, Atlantic Harvest, which was set up as a smoked salmon production unit in Northern Ireland, produces own label for Dunnes stores and its own brand, and distribution spills into the republic. Turnover is £12m a year in the UK on a range of products including Ballygowan, Dairygold, Galtee cooked meats, and Erin soups and casseroles as well as the Atlantic Harvest own brand seafood. It uses a green image to promote Irish food abroad, while Ireland the Food Island is an umbrella brand which covers Atlantic Harvest products. Over the past two years the English branch of the Atlantic Harvest operation has been working independently with the multiples, tying store locations to demographics and becoming a cornerstone in Irish sections in 50 stores, in Asda, Safeway, Somerfield and Kwik Save. Sales director Eddie O'Kane says: "Over the next couple of years I expect to see continued growth especially with the slight decentralisation of the major multiples. Buyers now have one eye on regional consumer demand and this continues to be driven by management at field level." {{SUPPLEMENTS }}