July 21, 2004

UK Beef Prices Could Rise
 

UK supermarkets could increase the price of home-produced beef without losing out on sales, according to the National Beef Association. The NBA says the retail giants are still stuck with the mindset acquired after the BSE crisis when consumers had to be encouraged back into eating beef.

The association is now urging retailers to accept that current low prices are no longer necessary to maintain sales.

It warns that supplies of home-killed beef, which consumers have clearly identified as their first preference, will be threatened unless there is a price rise at the checkouts - and a portion of the increase is passed to the farmer.

"Talks with the multiples have revealed that they are keen to see domestic beef output continue at current levels, but can't see how it can be encouraged if retailers as a group continue to sell such a high proportion for less than the cost of production, " said NBA chief executive Robert Forster.

He said one of the biggest supermarkets was selling beef mince for just 93p a pound and that steak prices in other big stores were not much better in relative terms.

"Our fear is that as long as the intense rivalry between supermarkets is reflected in outright price competition instead of the promotion of the superior UK product on a value for money basis, their supply security will eventually be jeopardised, " Mr Forster said.

Producers, processors and retailers all needed a satisfactory margin, he said.

"But this cannot be done unless there are significant increases in beef pack prices in some centres, " insisted Mr Forster.

Continued price cutting would result in imports gaining a bigger foothold, he said.