IFA seeks retail ombudsman on concerns of low-cost selling

The Irish Farmers Association (IFA) has called for the establishment of a retail ombudsman amid complaints that farmers are picking up the tab for below-cost selling in the grocery sector.

IFA president Joe Healy made the call at a conference on retail regulation which was addressed by UK's ombudsman or groceries code adjudicator Christine Tacon.

Mr Healy said farmers were the victims of a “vicious battle” for market share in the grocery sector, with retailers “savagely discounting” the price on farm produce.

“I want to put down a marker here today: this action by retailers, when some items were sold at one tenth of their production cost, will not be tolerated.”

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Mr Healy said retailers claimed they had to bear the cost of crash-price promotions but the reality was that below-cost selling meant a lower price across the board for farmers’ produce.

A supermarket price war in 2013 saw the price of carrots fall to as low as 5 cent per kilo in some outlets.

Delay in payments

Ms Tacon said her focus was on payments for better positioning, margin maintenance, delay in payments and pay-to-stay.

She told the conference about her investigation into one retailer which led to the finding that the retailer had seriously breached the code on delay in payments. The adjudicator required the retailer to fund the costs of her investigation, estimated at €1.2 million.

Ms Tacon said her remit extended to suppliers outside the UK who have dealings with the 10 regulated retailers in that jurisdiction. “If a supplier has an issue, bring me the information about breaches of the code and I will act swiftly.”

Mr Healy said: "The three years since her office was established in the UK as part of retail legislation provides irrefutable evidence of the need for independent enforcement of retail regulation in Ireland. "