The Irish Creamery Milk Suppliers Association (ICMSA) has called on corporate retailers to confirm that reductions in the price they charge for milk and butter will be entirely funded out of their own margins and will not be passed back to their supplier co-ops.

ICMSA president Pat McCormack was commenting as Tesco announced a first reduction in the price it charges for milk since 2020 and cut the price of a standard pound of butter by 40c.

Meanwhile, Aldi has also announced a 40c drop in the price of milk sold in its stores.

Announcements

These announcements, McCormack said, round off a five-day period that has seen all the major corporate retailers operating in Ireland cutting the prices they charge for milk-based staples.

McCormack has questioned what he said was the obvious targeting of two key indigenous food products produced to the highest standards by farmers now facing production costs higher than the price they will receive.

"ICMSA noted the language used by Tesco Ireland chief executive, Natasha Adams, in today’s announcement of the cut in the price of their own-brand butter.

"Adams is quite categorical about the fact that it is Tesco who, in her own words, are ‘investing in retail butter prices to help customers’. "We are taking that to mean that today’s price reductions are to be financed entirely out of Tesco’s margin – which are easily large enough to absorb this cut in customer price," McCormack said. Farmers will now require Tesco and other corporate retailers to confirm that this is the case and that there are no circumstances where the supermarket chains will enforce this decision and reduction on their supplier co-ops and farmers, said McCormack.

The ICMSA president said that the events of the last few days - and the ‘out-of-the-blue’ nature of last Friday’s rush by several retailers to cut milk price after receiving media enquiries - raised several pertinent questions about the role of the state agencies ostensibly charged with monitoring consumer patterns and prices.

“Farmers trying to get someone – anyone – in the state apparatus to look at the incredibly suspicious pricing of fertiliser in the last year will be amazed by the speed with which one query to the corporate retailers on their milk price gets that kind of response that very day”, he said.

Margins

McCormack added that as long as the major retailers were able to hide their margins or were able to dictate price backwards to their suppliers and force them to take the hit for reductions at retail level, there could be no possibility of the kind of whole sector climate transition that government policy is aimed at.

No-one seems to know how they put their margins together

“Every farmer in Ireland is monitored at state level and every cent of inputs can be calculated while our milk price is announced publicly on a monthly basis.

"The difference when we step through the doors of the supermarkets could not be starker; no-one seems to know for sure how they put their margins together and the state agencies seem to operate on the basis that their job is to not ask any awkward questions about who is ultimately paying for these price reductions or special offers," he said.

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