The Irish Farmers' Association (IFA) has singled out Lidl and Aldi as the two discounters having the biggest negative impact on the prices paid for farm produce, such as poultry, pigmeat and horticultural produce.
The IFA’s comments came as its president Tim Cullinan addressed the Joint Oireachtas Committee on Agriculture on the income crisis facing the pig, poultry and horticulture sectors.
“Today’s retail environment is dominated by five players; Dunnes Store, SuperValu, Tesco and two discounters, Aldi and Lidl,” Cullinan told the committee on Wednesday.
“Together, these five retailers constitute 90% of the total grocery market in Ireland. It is the latter two, Lidl and Aldi, that have fundamentally had the biggest negative impact on the price that primary producers receive for their produce,” he said.
Much of the negative impact on farm prices, the IFA delegation claimed, is caused by price promotion offers and the selling of farm produce as loss leaders.
The IFA argued that the burden of these promotions are shouldered by farmers in the longer term, despite retailers stating that they bear the full cost of such discounted offers.
We would argue that the cost of such promotions is built into procurement prices over time
“Retailers may claim that the cost of special promotions is funded by them. This may be accurate on a short-term basis, but we would argue that the cost of such promotions is built into procurement prices over time,” Cullinan went on.
“The reality is that the price farmers get paid each year has consistently declined up until this year,” he said.
Lidl responded to an Irish Farmers Journal query on similar claims made by the IFA in January’s protests on the supermarket’s below-cost selling of food goods.
The retailer stated that it was committed to supplying food to consumers at the best value in the market, with this commitment seen as being important “now more than ever” at the time.
“As with all retailers, Lidl offers weekly offers on various product ranges in order to follow through on this commitment,” the supermarket told the Irish Farmers Journal.
“Lidl will continue to fully bear the cost of its weekly ‘Super Saver’ promotional offers. These offers in no way impact the price paid to suppliers throughout the duration of the promotion.
“Lidl has clear and transparent contracts and agreements in place with all suppliers,” Lidl said.
The discounter added that it intended on continuing proactive engagement with suppliers facing volatility.
Aldi acknowledged that the price of “ingredients and commodities” had increased “significantly” when contacted in mid-February, but also stated that the retailer was guaranteeing consumers low-cost food.
“Our customers also know that, whatever happens, our guarantee is they will not find lower prices anywhere else than at Aldi and we would challenge anyone to prove otherwise,” Aldi stated.
Lidl and Aldi have been the only retailers that have welcomed the planned establishment of a food ombudsman by the Department of Agriculture when contacted by the Irish Farmers Journal.
Both supermarket chains have stated they believe the ombudsman will bring greater transparency to the agri-food supply chain
“Lidl warmly welcomes the establishment of a food ombudsman, as we have clear, transparent contracts and agreements with all suppliers,” a spokesperson from Lidl said.
Lidl also stated that it had fully co-operated with the Beef Market Taskforce’s report on price transparency in 2019.
“Aldi looks forward to working closely with the national food ombudsman, once appointed, which we are confident will provide for greater transparency in the market,” Aldi indicated in its response to the Irish Farmers Journal's query.