Supermarket pursuit of higher retail prices could create a win-win for entire beef industry
Retail analysis conducted by Eblex (English Beef and Lamb Executive) and released earlier today (June 1st) confirms the National Beef Association's long held belief that home produced beef is undervalued by multiple retailers and routinely undersold.
The Eblex findings clearly show that if supermarkets introduced modest rises in the price of steak, stewing steak and mince promoted under the increasingly successful English label they too could make more money and create a win/win situation for all sectors of the UK beef industry.
For example if there was an across the board increase in English mince prices overall retail income would increase by £18.4 million a year and these gains could be passed back through processors to hard pressed beef farmers who are currently selling cattle for substantially less than the cost of production.
"This Eblex work carries an important message for every beef farmer in the UK because it shows that retailers must look at the beef price issue more closely. Currently they are using low cost fresh beef to reinforce the concept of one stop shopping and to encourage more consumers to visit their stores to buy other products," said NBA chairman, Duff Burrell.
"However Eblex has made clear that the multiples are missing out on a chance to increase their own revenues while at the same time being too hard on farmers and jeopardising future prime cattle supplies."
"The message is that if the supermarkets focussed on price rises for all cuts, bar roasting joints, they could substantially raise the value of beef carcases and make their own contribution to sustainable beef farming in the UK."
According to the NBA the Eblex research also raises serious questions about the enthusiasm of many multiples for importing substantial volumes beef from the Republic of Ireland.
"The Association has no quarrel with imports produced to the equivalent of UK standards which are used to top up supply shortfalls that are the result of the UK being less than self sufficient in beef," explained Mr Burrell.
"However there are huge suspicions that many retailers order more imported beef than they need to so they can take advantage of its discount and force down the price of UK cattle too."
"The Eblex studies demonstrate that this is counterproductive because beef sold under an Irish label is quite obviously not as attractive to consumers as home produced and import pressure is making it harder for UK farmers to continue to produce the beef which supermarket customers have very clearly decided is their first choice."
"Both supermarkets, and their shareholders, should be aware that current retail policies do not maximise the profit that can be made from beef and are also making it more difficult to guarantee more secure supplies of domestic prime cattle at a later date."
"More supermarkets could earn a bigger margin per square foot of shelf space if they lifted the price of home produced beef and gave up bringing in unnecessary imports which simply flood the market."
"If the multiples continue to reject the maxim that volumes are for vanity but price is for sanity they will be spurning opportunities to not only increase their own income but also create a more secure future for their most valuable producers," Mr Burrell added.
