You only have to turn on the TV or radio to met by a constant barrage of adverts from all the supermarkets boasting how much cheaper and better value they are than all the rest and how they are commited to driving down prices aswell as paying a fair price to the farmers and producers. Only today I heard on the radio an advert from either Morrisons or Sainsburys saying how great their prices were and that ' Chritmas is for sharing '. Well I'm not sure who they are sharing with but it's not the consumer and it's definitely not the farmer or grower!. This was published in this weeks 'Farmers Weekly':
Very roughly it costs about £40 to kill and butcher a pig, but bear in mind that will produce about 80kg of various saleable cuts of meat.
B&Q are a lot worse for mark ups, especially on small packs of fasteners and screws - much worse but I don't recommend them for Christmas Dinner anyway. You need to look at all the figures though and ultimately return on investment and the like as well as yearly profit to see what they really make - although I guess a lot of that is hidden with clever accounting...
more importantly whats the producer making, prob cost more to grow a pig than it does to store it on a shelf
So it doesn't bother you that you and millions of struggling families out there are being ripped off and the farmers and growers are being put out of business so the supermarkets can make billions? Supermarkets dictate what farmers and growers are paid, they work on an average after looking at the farmers and growers accounts (which is part of the contract) then they set a price which is just enough to keep their suppliers heads above water. But this is just an average, combined with unforeseen events such as bad weather and global trade problems such as the Russian import bans mean many make a loss. The farmers and growers can't argue over price they have to accept it or send their produce elsewhere which means another supermarket!.
retail markups when compared to cost or wholesale prices will always look outrageous, I was in currys yesterday and looked at their networking cables, a 2m patch cable was on sale at £9.99. The same thing from a wholesaler is £2.00 or from a manufacturer £1.00 but the retailer has to buy thousands of them, ship them around the country, take the risk on obsolescence or in the case of food not selling it before the code date expires. Supermarkets employ thousands of people and have an infrastructure in place to get all that food into one place ready for you whenever you want it, all on an operating margin in the single figures. Headline figures like the OP are only a very small part of the story.
It's pretty much the same story for farmers wherever you look. In France or Switzerland certainly. I find it amazing that farmers can't organise a co-op to buy their goods at a decent price which would then be what the supermarkets have to negotiate with. The other surprising thing is that with markups like that, there should be ample scope for market traders to pay more to farmers whilst undercutting supermarkets. I also think the biggest failure of the EU is to have allowed this situation to develop. After all, the CAP is meant to be one of their major policy planks. It's not right.
What about the price paid for milk? That is as I understand it causing huge problems price per litre. Supermarkets use it as a loss leader and the farmers get shafted on that basis. Glid market traders don't have the buying power of supermarkets, and consequently can't get the prices to pass on savings to customers. Living in a rural community I see how feckin hard farmers work and I guarantee no one on this forum works as hard for similar minimal financial reward. The majority of consumers are not interested in the provenance of their food nor the impact it has on the greater community only how much it's going to cost them. I completely understand that, and in today's difficult economy I can't blame them. When you have a govt in place that believes in the free market economy, that if you fail it's tough shit and you weren't trying hard enough. That actively wishes to promote social injustice and division things will never change. Unless you're a multi national corporation then of course you can dictate the terms on which you do business in the UK and the 'levels' of tax you pay.
Agree with all that. But local traders would be able to pay farmers 50% more almost and still sell cheaper than supermarkets. There just has to be a gap here. The milk thing is also general. Swiss and French dairy farmers are also being driven to the wall. But the lack of a co-op? That just mystifies me.
We used to have cooperatives such as the Co-op and the Milk Marketing Board that were farmer owned but as they got bigger the amount of power the farmer had over decision making got less and as they grew they soon became controlled by people who wanted profit before what was best for the people supplying, in the end the masters became the slaves. Unfortunately there isn't the infrastructure for local traders to sell the produce locally. There was about 20-30 years ago but the power of the supermarkets took that away along with people's loyalties. Supermarkets are convenient for one stop shops and the majority of people wouldn't have it any other way or revert back to the days of old even if given the choice. There needs to be a fair balance of the profits so all can thrive and not just greed from the powerful. With the appearance of Aldi and Lidl the such likes as Tesco's who have become accustomed to having the largest slice of the market and ever increasing profits have had the carpet pulled from under them. Some may say it's poetic justice as this is what happened to the small retailers over the past 30 years at the hands of Tesco's etc. Aldi and Lidl return profits of around £300-500 million a year compared with Tesco's £1bn. Tesco's is in a bit of a dilemma at the moment as profits are falling at the hands of the new kids in town and the share holders are jumping up and down. They can't increase the cost of food to the customers as even more will desert them and they can't reduce what they pay their suppliers because they're going bust and dropping like flies. They have become victims of their own success. I suspect aldi and lidl's profits will continue to rise at the expense of the larger supermarkets and they will have to adjust to it and live with it. The situation with milk at the moment isn't entirely the supermarkets fault but make no mistake they are using it to their advantage. A lot of dairy products from this country went to China but China has over bought so almost overnight the trade has diminished. Also in a twist of coincidental bad luck the trouble in Ukraine has led to Russia banning all imports of dairy produce from the UK. This has led to a bankrupting drop in milk prices. I've seen the milk price on my farm fall from 31.5 ppl (pence per litre) to about 25.5 ppl and it's going to get worse. Nationally the average break even point is 29 ppl. I'm luckier than most in the fact we have other enterprises to cushion the losses but there is a limit. This has led to cheaper milk prices in the supermarket. Don't be fooled into thinking the supermarkets are selling it at loss. They are selling it cheaper because they are getting it cheaper but this is just devaluing the product and will cause a stir if/when the price has to go back up.
The Co-op was a buyers' co-operative, not a producers' co-operative - it was set up for the benefit of consumers. The Milk Marketing Board was a statutory body set up by government, and was very effective for a long time. Then it was abolished for purely doctrinaire reasons, to ensure that producers could be screwed more effectively unimpeded. I agree with Gildd's point. There is nothing to prevent a large number of farmers getting together in a producers' co-operative on a national scale. Then the farmers could dictate terms to the supermarkets instead of the other way round. So why don't they? Because most farmers give maintaining their independence and individuality a higher priority than making any money, presumably.
it pains me to say it but there is some truth in what you say. Let me try and explain and give an insight into being a farmer. I can understand any person reading this not being able to understand why anyone would want to be a farmer in the first place, including myself at times!. I can find myself out at 2am in freezing conditions calving a cow for the calf to die in my arms or spend a week preparing a field for reseeding then an hour after the seed has been drilled we have an unseasonal torrential down pour that ruins it or I can get a letter from my milk buyer saying they are cutting the price of milk then at the end of week report that profits are up. It all sometimes makes me wonder why we bother. But this is the same as me wondering why anyone would want to be a police officer or a nurse etc, they are thankless jobs but important ones nevertheless and I'm grateful to them and respect them for what they do even though it makes no sense to me. What they have in common with farmers though is that what they do goes beyond money. However we all need to make a living. There have been several attempts in recent years to form producers cooperatives but we are not talking about a dozen of the leading washing machine manufacturers putting their heads together and sticking their finger up at the supermarkets. There are tens of thousands of farmers in this country, every farm is different in size and its ability produce food from a geological, logistical and profitable point of view. Every farmer is different in their abilities, ambitions, opinions, attitudes, ideas, motives and unfortunately intelligence. Whilst cooperatives are a good idea in theory they are extremely difficult to form because of the broad spectrum of people who have to agree with one another on a common goal and how to achieve it.
