Commenting on the announcement by Tesco of the opening of new stores, IFA President John Bryan questioned the expansion plans by supermarket multiples at a time of over capacity in the sector, and until the Code of Practice for the retail sector is in place to ensure fair play for producers.

According to the IFA President, producers are not getting fair play in the food supply chain and rather than undertaking unnecessary capital investment, the multiples would be better off fixing this fundamental problem. “I believe the over capacity of the sector is self-evident and that returns to the primary producer are being forced down in order to pay for the excess capacity and capital expenditure by the multiples.”

Mr Bryan also said that many small shops and convenience stores are struggling to compete as the multiples dominate and expand unabated and he questioned how many net jobs would be created from this expansion. “The Government and the EU Commission must accelerate their plans to regulate the sector as the multiples continue to take more profit out of the food supply chain. Average farm income is at €13,000 and some multiples are enjoying double digit margins, which is clear evidence that the food supply chain is broken.”

The IFA President added that the new statutory Code of Practice promised by the Government must enshrine the principle of fair trade for farmers in the grocery trade by providing a means for the more equitable share-out of the consumer price across the food chain.