How many people actually think that legislation should be brought in to ensure that the supermarket pays the farmer a fair price?
I don't think it should be legislated for at all.
1. It's not a free market: there are very significant distortions caused by having a very few companies exploiting their dominant position. Hence some form of regulation is needed to counteract this.
2. Food is not like other products. Personally, I wouldn't be that bothered if I went to the shops and I couldn't get a TV or particular car or whatever, but it would be pretty serious if food wasn't available, or it was priced beyond most people's means. Thus, for example, it is not a good idea to become totally dependent on imported food, and it's important to maintain a locally sourced food supply.
I'll come back to a point I made earlier: it's naïve to think that selling items at what is clearly an uneconomic price is somehow good for consumers in the long or even medium term.
The research was carried out by IPSOS MRBI. They choose the sample to be questioned in the usual manner. 1,003 adults aged 15 + years were surveyed in February 2014.
Of these 49% were male and 51% female. The regional breakdown was: 28% Dublin, 26% rest of Leinster, 27% Munster, 18% Connacht/Ulster.
The following is the wording that was used for the questions:
Q. In your opinion, should legislation be introduced to ensure that farmers receive a fair price for their food that is sold in supermarkets?
88% of respondents answered Yes.
Q. Before Christmas, supermarkets were selling vegetables way below the cost of production. In your opinion, is this good for the consumer in the long term?
64% answered No.
So price promotions (early bird discounts, free samples, buy one get one free, x% off, etc) are bad for consumers?
Absolutely not: as I said, if any business wants to discount or do whatever promotion they like, then fair enough.
That's completely different to a retailer forcing a supplier to sell below the supplier's costs by (ab)using their dominant position. As I said, it's naïve to think that can continue for any length of time without long-term damage to consumer interests.
Competition law is specifically geared to deal with companies abusing their dominant position in a market.
So why do we now need even more legislation (along with the added compliance cost & bureaucracy)?
And the canny shopper can exploit the highs and lows just as some people do with the airlines and other businesses...At end of year they will have balanced the very low 5c prices with higher prices which allows them to meet their target profit.
Simples really and they get loads of customers through the doors by varying their veg bargains.
And the canny shopper can exploit the highs and lows just as some people do with the airlines and other businesses...
the only points I am making are that the current grocery market is distorted and not functioning as a normal competitive market, and that food is not like other products.
3. Most of our food product is exported while most of our food consumption is imported.
It's easy to make those points but maybe less easy to prove them. Is the grocery market really distorted?
The facts suggest otherwise:
1. There are more big players in the retail sector than ever before.
2. Farming & food production are booming, despite an economic recession.
3. Most of our food product is exported while most of our food consumption is imported.
So our producers are far less dependent on domestic supermarket chains than they were say 20 years ago.
Where's the problem?
OK, a couple of examples:
1. Company A supplies product to supermarket X. They get a call one day saying if they want to continue to supply to X they have to drop all their other customers.
2. Company B is supplying product to supermarket Y. Periodically, they are told they must supply that product, at below the cost of B's production, so that Y can offer it as a promotion.
The fact that our food industry is booming amidst a recession has nothing to do with supermarket PR.The supermarket's PR machines have done a good job if people think all is rosy and we're well served by a competitive market.
Do you really think that Agri Aware want "real competition"?It's so much easier to indulge in some headline grabbing promotions than have some real competition.
Prices have lowered and aligned with the UK - that's why the cross border shopping boom came to an end. Even the likes of Asda have found it hard to beat Aldi or Lidl on price.If all was well with competition, one would expect prices to lower and align with other markets:
I am just suggesting, lets make sure we keep Farmer Carrot, Farmer Apple etc alive.
These examples are not evidence of market distortion.
The fact that our food industry is booming amidst a recession has nothing to do with supermarket PR.
Prices have lowered and aligned with the UK
I guess it depends on what you call market distortion. I'd say it's a distorted when suppliers don't have an effective choice of where to sell their products due to market dominance and cartel like practices in the market.
My point about supermarket PR was that it was clearly working if they have people believing there is a competitive market working to consumer's interests.
The facts are otherwise. Household spending on groceries is still significantly more here than the UK, so either we're indulging ourselves with more expensive items, or the cost of those items is higher.
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