Belfast Telegraph

Thursday 27 November 2014

New bid to halt rising food bills

Minister writes to big stores on prices fear

Agriculture Minister Michelle Gildernew will write to Northern Ireland supermarkets in a bid to prevent rising grocery prices, following the increase in grain costs.

Earlier this week, Northern Ireland's largest employer Tesco increased the price of its chicken by 4% to £3.99, almost doubling the price of its rival Asda, which slashed its price for the same bird to £2 last month.

But the price hikes do not stop there. Tesco is expected to increase the cost of other meats very shortly.

The move comes amid escalating feed bills - a result of a global shortage of grain which is used as animal feed.

Tesco says it is simply impossible for farmers to produce chicken that is healthy and safe at such a low price.

It also said it believed shoppers now placed a higher priority on the provenance of food than cost alone.

The Minister said the rising cost of grain and feed prices were affecting local farmers and she called for an urgent open discussion between producers, processors and retailers to devise prices that would not affect supply chains.

"This is a critical issue for producers and they cannot be expected to continue making losses against this massive and increasing input cost," Ms Gildernew explained.

" They are in precarious situation and fear for their futures. This worries me greatly and I am determined to do all I can to address this.

" I am publicly calling for an open discussion between producers, processors and retailers to see what can be done urgently to better reflect, in retail prices, these increasing costs that jeopardise the whole supply chain. This issue is not about squeezing out a better deal with farmers but is about ensuring that they have a viable future."

However, other factors could also be affecting the reason for the supermarket to increase its prices.

The Competition Commission is investigating Tesco and Asda for pressuring suppliers into granting discounts that they can use to undercut their rivals.

However, the escalating wheat prices, which are affecting economies around the world, are soon expected to force all supermarkets to raise prices to cover rises of nearly 100% in the cost of livestock feed.

This rise means livestock farmers face massive increases in feed bills - particularly for pig and poultry producers who see more than half their production costs going on feed.

The Ulster Farmers Union staged an emergency meeting last night in Cookstown to discuss the feed crisis.

Its president Kenneth Sharkey told the Irish News that feed prices had risen to unprecedented levels because of the grain shortage.

"This is driving up the cost of producing poultry and pigs every week and we must see an immediate response from the retail sector.

"Farmers can not absorb this cost pressure."

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