Who is the CCPC protecting?

The Competition and Consumer Protection Commission – it’s quite a mouthful.

Its acronym, the CCPC, might sound familiar to anyone over 40. Perhaps it’s because the old Soviet Union called itself the CCCP (USSR being the English version). Thus CCCP was synonymous with inflexible orthodoxy that put rules before reason, principles before people.

It’s not a bad description of the CCPC from a farmer’s point of view. Sending letters to the farmers on the factory gates rather than the processors inside the gates was seen as siding with the big boys.

The reason it did so lies in its remit, which is “a dual mandate to protect competition and consumer protection law”.

The assumption seems to be that the free market will take care of itself: supply and demand. The facts, however, suggest this is idiocy when it comes to beef – and indeed most food.

Farmers are receiving an ever-shrinking proportion of the retail price

Competition among retailers constantly drives prices down. In order to protect their margins, they pay less and less to processors, who in turn pay less and less to producers. This is a toxic recipe for the primary producer.

The evidence for this is clear. Farmers are receiving an ever-shrinking proportion of the retail price. It may not be the 20% cited by the Beef Plan Movement posters during its recent picket of processors, but Bord Bia has now confirmed it to be 40% – barely more than a third of the consumer price.

Consider this.

The farmer seems to be taking all the hit, while everyone else protects their margin

If the market was functioning correctly, the pain delivered by lower prices would be shared out among the agents in the food chain. But this doesn’t happen. The farmer seems to be taking all the hit, while everyone else protects their margin.

This is not a new phenomenon. John F Kennedy was an up-and-coming senator when he said the farmer was “the only man in our economy who must buy everything he buys at retail – sell everything he sells at wholesale – and pay the freight both ways.”

Farmers need protection. 100,000 cattle farmers selling to basically five processors who in turn are dealing with a handful of retailers – it’s pretty easy to spot the weak link in the food chain.

There is a groceries order, and guess who the competent authority charged with its implementation is? Yep, the good old CCPC.

It’s incompatible with its other remits. A grocery regulator, food ombudsman, call it what you like, is badly needed.

Below-cost selling is not allowed, but it seems below-cost buying is almost encouraged.