Too many retailers are using their market power without exercising the equivalent responsibility, according to Peter Barr, chairman of the Meat and Livestock Commission as well as the Red Meat Industry Forum.
Addressing the conference of the British Meat Processors&' Association, Barr said: &"Retailers&' meat-purchasing policies remain short-term, price-driven and adversarial. The perpetual auction of contracts is squeezing our processing sector and throttling much-needed reinvestment.
&"And our primary producers, who are the weakest players in the chain, have largely ended up as price takers, with too many not even breaking even.&"
With the continuing squeeze on prices, the industry faced severe decline unless there was a more even share of proceeds, said Barr.
The resumption of the beef export market would provide additional opportunities for the British beef market, but it was unlikely to change the overall dynamics at play
&"When South American beef comes fully on-stream again, I&'ll wager we&'ll see the multiples telling you to use it as a lever to force domestic beef prices back down,&" said Barr.
&"I believe we&'re rapidly reaching a watershed. Unless retailers abandon their &'reduce price and tender&' approach in favour of genuine supply chain partnerships, we will see a significant rationalisation in the slaughtering sector.&"
This would result in a market dominated by a few big players, which would not be in the interests of farmers, processors or consumers.
Retailers had to be told their lowest-price approach was socially, economically and politically unacceptable, said Barr, who added that the Competition Commission inquiry was an opportunity to expose &"the abuse of power&".