The Beef Plan Movement has this Monday called for a beef price structure based on farmers' cost of production, as enshrined in recent French legislation.

A spokesperson for the group referred to the recent "Egalim" law (shorthand for "food equality") in force in France since 1 February. The law states that annual price negotiations between processors and retailers must start from the cost of production calculated in agreement with farming organisations.

Such engagement would show farmers that retailers and processors want to collaborate

"This aligns with the Beef Plan Movement's call for a cost of production plus a margin return for beef farmers," the spokesperson said. "Such engagement would show farmers that retailers and processors want to collaborate." According to the group, beef's cost of production is between €4.50/kg and €5.38/kg.

Willie McCormack of the Beef Plan's Co Westmeath committee told the Irish Farmers Journal that it struck him while drinking "fair trade"-labelled coffee that the same effort to return a fair price to farmers in developing countries did not apply to local products such as beef.

He called for engagement with processors and retailers to see them pass on some of the value back to the farmer, as in the spirit of the French law. "Consumer prices should not go up," he added.

Rules on pricing and promotions

Below-cost selling was already illegal in France and, for the next two years, an additional pilot measure is increasing the minimum retail price of selected food products to 110% of their purchase price. For example, a supermarket paying €1 for a leading brand soft drink must sell it to consumers for a minimum of €1.10.

The law also limits the amount of promotions retailers can offer. Consumers must now buy at least two products at full price to get one free, as opposed to one for one previously.

Slow to achieve results

The French Senate held a series of hearings with agri-food industry representatives in February to see how the new rules were implemented.

"Aside from a few high-profile milk supply contracts, the Egalim law has been slow to achieve unanimously recognised results," the senators concluded – though they acknowledged it was early days to assess the full effect of the legislation.

Pressure

While retailers reported an improvement in price negotiations with their suppliers, food processors reported continued pressure from supermarkets to drop food prices by 1.5% to 4% this year.

The extra 10% margin imposed on flagship products used to draw customers into stores was intended to be redistributed to the wider agri-food industry and circle back to farmers' pockets.

However, analysts told the Senate that supermarkets had so far used this extra money to lower prices on their own brands or increase rebates through loyalty cards instead.

There are now fears that price pressure on private-label products could be passed down to smaller food processors and farmers.

We need checks in supermarkets and factories

Farming organisations called for stricter policing of the new rules. "We need checks in supermarkets and factories," said Baptiste Gatouillat, of the young farmers' organisation Jeunes Agriculteurs.

"For every €100 paid by consumers, only €6 go to farmers. We need to react urgently," added Patrick Benezit of the leading farmers' union, FNSEA.

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