Tesco `mistake' on beef has hollow ring with exporters

Maurice Pratt, of Tesco Ireland, tried hard to defuse the row. The advertisement his parent company in the UK had placed in a British farming magazine was "a mistake", he said.

Tesco did not, as the advertisement stated, have a pro-British policy towards beef. His British colleagues were wrong and there was no discrimination against Irish produce.

The company, he claimed, was still committed to buying Irish beef for its British stores. It had, after all, recently signed a £5 million contract with Dairygold. But, however hard Mr Pratt tried, his words rang hollow for most in the industry here. The fact remains that in recent weeks there has been virtually no Irish beef either on Tesco or most other UK supermarket shelves.

Just how critical this is for Irish beef producers is easily illustrated: Ireland's beef export trade with Britain is worth almost £200 million per year, 40 per cent of which comes from sales to the larger multiples.

The current situation, which was precipitated by a recent "Buy British" campaign, has seen ASDA and Safeway as well as Tesco remove Irish beef from their shelves. It is estimated to be costing the beef industry £3 million a week.

The beef row in Britain has moved from angry scenes at ports to the boardrooms of the supermarkets where, as Agriculture Minister Mr Walsh recently conceded, it is infinitely more difficult to deal with.

Raymond O'Malley, national livestock chairman of the IFA, has watched developments over the past few weeks. Early in January, he learnt from talking to UK supermarket managers that problems were about to arise.

There was pressure on the supermarkets from MPs - who, in turn, were being lobbied by the farmers - to stock only British beef.

With a worldwide export ban on British beef exports following the BSE crisis, farmers there were becoming more vocal in their demands. Customer pressure had also increased and there were reports of angry scenes at checkouts in supermarkets which stocked Irish beef. "The British are very attached to their beef," a Tesco source explained.

The Meat and Livestock Commission (MLC), the agency which promotes beef in Britain, unveiled a £2 million "Buy British" campaign. Farmers marched on Downing Street with the signatures of thousands of consumers who were demanding that their stores supplied only British beef.

It was against this background that supermarket bosses made the decision to drop Irish beef. "We thought it would last for a couple of weeks; we understood the situation they were in. We thought if we keep our heads down then it will blow over," says Mr O'Malley.

It is not known how long the ban, which has seen all but one UK multiple (Sainsburys) refusing to stock Irish beef, will continue. When asked, supermarket spokespersons were vague, with answers that ranged from "when the customer decides" to the more ominous "indefinitely".

The MLC's campaign, which is viewed as being a major influence on future developments, is set to continue at least until March.

An Bord Bia is working on an intensive media campaign for Britain to regain the beef market share but the task of convincing people to buy Irish beef will be tough, says Mr O'Malley. "When a product is off the shelves and people stop buying it, you have a hellish marketing job to get back to where you were."

Most major beef suppliers here were reluctant to comment on the effects of the multiples' decision. One who did, but did not want to be identified, said it was a "very sensitive area".

"It is ironic that the ones whom it affects most do not feel able to comment. There is a certain fear that if we say something it could offend someone in the boardroom, and that when this is all over they might choose another supplier," he said.

He pointed to the situation in France where a similar trend for nationalisation - retailers opting to stock home produce instead of imports - has led to a significant decline in Irish beef exports. Pre-BSE, Ireland exported 70,000 tonnes of heifer beef to the French market. That figure now stands at 25,000 tonnes.

"It is not going to put us away," said the source, "but it reduces the return on a heavy investment we have made."

The Department of Agriculture in Britain was unwilling to comment in detail about the supermarkets' British-only policy, saying only that it was "a commercial decision". A spokesman for the MLC defended its "Buy British" campaign.

`There IS nothing new about promoting British beef, we have been doing that all along," he said. The agency had conducted a survey which found that 72 per cent of those questioned would prefer British beef.

The Irish Times asked whether the other 28 per cent should be allowed to choose for themselves in supermarkets but the spokesman said he could not comment on supermarket policies.

Mr Walsh is understood to be deeply concerned about the situation and has directed An Bord Bia to increase its contact with the supermarket chains. He will travel to Britain on Monday to meet executives in the multiples and argue the Irish beef industry's case.

"There are a number of points he will put to them," said a Department spokesman. "The UK is a critical market that has been painstakingly built up and we have been one of the main advocates of Britain's return to the European beef markets. Also, the MLC themselves have produced figures that show a beef deficit in the UK of 221,000 tonnes."

While the legality of the supermarkets' decision is not clear, it is viewed as "running counter to the spirit of the Single Market", he said.