Vegetable price war ‘will decimate farms’
CHEAP bags of vegetables that ‘cost less than a can of Coke’ will lead to many of Britain’s farmers being forced out of business, the farmers’ leader said yesterday.
Meurig Raymond, the National Farmers’ Union president, said a ‘vicious price war’ between the major supermarkets and discounters threatened to ‘decimate’ farmers and growers.
He told the NFU Conference in Birmingham: ‘The supermarkets will say one thing publicly, but we know that they will push the pain down on to their suppliers and they’ll do it because they think they can.
‘That ends up with the ridiculously low prices for vegetables we saw in some stores over Christmas. It was crazy that the carrots and sprouts for the Christmas dinner cost less than a can of coke.’
In recent years Aldi has sold 500g of sprouts for 25p and Sainsbury’s a kilo of carrots for 59p. A can of Coke costs 68p in Tesco.
Mr Raymond, 6 , said cheap prices were one of a host of threats to his 55,000 members. He said that while cheap prices may ‘in the short term’ be a boon for consumers it was a disaster for farmers.
‘What happens if you decimate an industry?’ he asked. ‘There is such a thing as a unit cost of production. If you keep selling for below the cost of production, you won’t stay in business long.
‘At the end of the day if you keep devaluing food, the pressure is piling down the supply chain.
‘At the moment the majority of retailers are looking to drive down costs. There is a perception there is an ample food supply in the world, the undercutting that’s taking place is driving down values even further.’
Mr Raymond said Tesco ‘had its knuckles rapped’ by the Groceries Code Adjudicator, which ruled that it had seriously breached the code of practice over the way it treated dairy suppliers. He called for an extension of the code and the adjudicator’s role.
‘Won’t stay in business’