Below Cost Selling by Retailers is Morally Wrong

IFA President Francie Gorman has called on retailers to end their policy of discounting fresh food in their stores. This week vegetables, potatoes and lamb are being sold below the cost of production at a price that is insulting to the farmers and growers who produced it.

“Farmers are having an awful time with weather and cost pressures and then they see what they worked so hard to produce being devalued on the shop shelf,” he said.

“This latest marketing stunt by retailers to attract footfall into their stores is morally wrong and will ultimately drive farmers out of business,” he said.

“Farmers are sick of listening to retailers telling us that they are funding the cost of the discounting when everyone one knows it is dragging the market down and causing a race to the bottom amongst the retailers,” he said.

IFA has long called for Government to legislate against the practice of below-cost selling, as other EU member states have done.

There was an opportunity in the Agricultural and Food Supply Chain Act 2023 to prohibit this practice, but the Government bottled it under pressure from retailers. The Minister for Agriculture must introduce an amendment on below-cost selling now.

“Discounting potatoes, carrots, parsnips and other Irish-produced vegetables below breakeven levels for farmers needs to stop. The vegetable sector is in serious decline and this practice of slashing prices is completely undermining growers. It will see Ireland without vegetable growers unless the Government put a stop to this cheap marketing stunt. Retailers, and the discounters in particular who regularly use these below cost promotions, will argue that the farmer does not bear the cost of these promotions which may be true in the short term, but this practice is killing the Irish horticulture sector,” he said.

Similarly, sheep farmers are recognised as a low-income sector, and they need support to remain farming. Lidl & Aldi are selling lamb well below the cost of production this week and this could potentially undermine the market and see farm gates prices fall as a result. This is at a time when farmers are at their wits end due to the weather conditions.

“Farmers cannot stand by and let multinational companies such as Lidl & Aldi with millions in annual profits undermine the livelihoods of Irish farmers,” he concluded.