Retail giant Tesco’s move to reopen 11 of its stores in the Republic of Ireland and slash prices by as much as 25% this week has drawn heavy criticism from manufacturers and farmers.
The retailer announced on Tuesday (5 May) that it had closed the stores at the weekend and reopened them with prices cut on 12,500 goods in response to the challenge of cross border shopping in Northern Ireland.
However, Irish Farmers Association president Padraig Walshe has accused Tesco of using Irish meat, milk and vegetable suppliers as “cannon fodder” in a major struggle to save their market share and protect their profits.
“Tesco’s tactics will squeeze producers and processors even harder at a time when the Irish food sector is under huge pressure, and farmers are already forced to produce at below the cost of production,” Walshe said.
He added: “On the same day as Tesco announced a major new pipeline for imports, we are seeing their real agenda which is to push Irish food processors, farmers and growers into the frontline in the latest round of supermarket wars.”
The IFA president said the current heightened competition between retailers is “totally unsustainable” for Irish farmers and growers and that Irish jobs and livelihoods will be lost as a result of Tesco’s “grab to recover market share and shore up their profits”.
He said the move comes only a month after Tesco reported record profits of GBP3.1bn (US$4.7bn).
Tesco was also accused by Food and Drink Industry Ireland of bringing into “sharp relief” the “extent, scope and impact” of the loss of competitiveness caused by high costs in Ireland.
Director Paul Kelly voiced concerns at the effect the loss of competitiveness was having on Irish society, business and consumers: “Over 2,000 jobs have been lost in food manufacturing this year, with many thousands more at risk. This is a wake-up call for government, they must address our unsustainable cost base, which includes the second highest electricity prices in Europe, waste disposal costs twice the British level and a VAT differential of 6.5%.”
Tesco were unavailable for comment when contacted by just-food.