The day of action yesterday highlighted a number of issues, one of which was the continuing problem with inequality in the food supply chain. The Minister will know there exists a large arms inequality, with the farmers on one side and the supermarket chains on the other. Three such chains, Tesco, Dunnes Stores and Musgrave Retail Partners now account for more than 70% of the supermarket sector and as a result prices paid to the producer are driven down by these organisations.
This is as a consequence of practices which include the payment of hello money, obliging producers to "pay-to-play", trade agreements which incorporate large rebates to retailers and forced contributions towards stores' discount campaigns. I wish to focus on these practices and ways in which they might be addressed.
As the Minister is aware, in 2010 the IFA produced a report entitled Equity for Farmers in the Food Supply Chain. The latter contains many recommendations in the context of striking a balance between producers and retailers. I hope that, like me, the Minister agrees with many of those recommendations, some of which relate to the forthcoming legislation. In the absence of achieving the balance to which the IFA's report refers, the farming industry could potentially become unsustainable in view of the relentless drive to reduce prices and protect the bottom-line profits of supermarket groups. EUROSTAT has indicated that retailers in this country enjoy margins in excess of those which obtain in other European countries. Consumers can sometimes benefit as a result of this. In the main, however, it is the shareholders who enjoy significant benefits.
It must be noted that people's diets are becoming increasingly unhealthy. I refer in this regard to the ever-growing presence of processed food in, for example, children's lunch boxes. Such foods contain large amounts of fats, salts and sugars and this is having an impact on the health of the citizens of the nation. The Minister may inquire as to how this matter relates to him and his Department. Processing food is a cheap way to maximising profits, especially in the context of the packaging, marketing and other tools that can be used to promote such food. The tools to which I refer are essentially used to drive down the costs relating to products. I went to my local supermarket at the weekend and discovered a colourfully packaged packet of processed cheese that is obviously aimed at children. The cost per kilo for this product is €24 and the price paid to the farmer for the milk required to produce it is just over €3. While it can be claimed that some of these products are Irish in origin, I understand that some of the milk used in a number of them is sourced from Canada or the Netherlands. It is possible to obtain genuine, non-processed cheese such as Gubbeen Cheese, from Cork, or Kileen Farmhouse Cheese, from my constituency for a great deal less than €24 per kilo. It must be stated that there is a sizeable differential between €24 and €3.
I ask the Minister to outline Government policy in respect of this matter. How is it intended to address the fact that those who mass produce processed food are receiving greater rewards than those who provide quality local products? How does the Government intend to ensure that food will be less commodified in order that local suppliers will be encouraged in their efforts? Will the Government consider introducing policies aimed at addressing the issue which arises in the context of food quality and people's diets? I would be grateful if the Minister could comment on my concerns regarding hello money, arrangements relating to retailers' power to impose licensed trade agreements - which contain built-in rebates - on producers and the fact that people are being obliged to make forced contributions in respect of stores' discount promotions. These practices are unacceptable and we must introduce the necessary regulations in order to ensure that the issue of social justice that exists in the context of retailers and producers can be addressed.
