Irish food and drink prices 30% higher than EU average

Aard · 13-07-2010 12:29PM

MGLman wrote: »

It is even higher if you buy more of a product in M&S Grafton street. one bottle of still water 1.5L is 0.49 euro. Now, if you buy 4 of the same water it is 2.09 euro. You pay more if you buy more, WHAT THE F*** ???? Anywhere to compain, sue or something for this ????

In fairness, Marks and Spencer don't exactly brand themselves as the bargain-basement of supermarkets.

Tipp Man · 13-07-2010 12:44PM

eightyfish wrote: »

Firstly, Tipp Man, this has been an enjoyable discussion I'm going to try and address your points civilly in one post, and hopefully leave it at that because I'm not sure where else the thread can go!

I'll start with this. We've established that the Irish retail market is dominated by four companies, some much bigger than others. In order of size they are: Tesco, Dunnes, Supervalu, Superquinn. In any given retail market there are certain products which are footfall commodities. Just looking at one drink, three of them in the Irish market are tea, milk and sugar. These are the items that customers will go to a shop for if they are cheaper, as they are in everyone's weekly shopping basket. They are included in every "shopping basket" comparison in newspapers and advertising. Customers notice these prices. The supermarkets hope you come to them for the low prices on these things, and then buy other stuff that they make a higher margin on.

Now - in every market where there are big players and smaller players, the big players set the prices on footfall commodities. They have the buying power to reduce their prices, and in turn this affects what the manufacturers and suppliers prices are to the supermarket. The smaller players then have no choice but to follow the bigger guys - but only on footfall products. So therefore on some products, the big guys (Tesco, in our case) determine the price. This is basic economics.

Interestingly, sugar is not a footfall driver in the UK. So you will see that sugar prices are higher in the UK in general, even though no sugar is produced in Ireland.

On this point, you are completely wrong. It is not that simple. Milk is an unbranded commodity, Avonmore milk is a branded product sold at a higher price to supermarkets. Avonmore sponsor the weather on TV3, and Kilkenny hurling. The advertising spend is to promote the brand, if it is sold at the same price as unbranded milk to supermarkets, then why bother advertising it at all?

The view that supermarkets somehow pick the price of Avonmore out of the sky is just incorrect. While it is true that the milk in the carton is probably the same, the products themselves are not. Supermarkets make more of a profit on all own-brand products as they take care of the packaging process themselves. This is also why they can generally sell own-branded goods cheaper. Avonmore is more expensive, but you are paying for the brand.

Also, this view that Glanbia is some sort of non-profit-making charity is wrong. They are a profit making company, and they have a monopoly on milk processing in Ireland. They buy milk at one price, but they will not reveal the prices they sell milk at to the various supermarkets. Glanbia pay the same price for milk no matter what product it goes into. Milk is the footfall driver, but they also make Kilmeaden and Yoplait, which is where they make their profits from the milk. They made a pre-tax profit of €97.4M in 2009.

The idea that supermarkets are "creaming it" (excuse the pun) and this is why prices are higher is, again, simplistic. Everybody in the supply chain is involved in the final price. As mentioned multiple times, the minimum wage for every worker involved is the second highest in Europe.

Also, Superquinn - our Irish supermarket of choice in this discussion as they are the smallest of the "big 4", had to let 400 staff go last year. Not exactly raking in the profits, I'd say.

Its an enjoyable discussion but you need to get some facts before you make some statements

Fact number 1 - Glanbia made a profit of 97.4m in 2009, ALL of which was made by their foreign operations, the Irish operations LOST in the region of 3-4m. On an average year the Irish operation is returning 3-4% whilst its foreign operations are returning a minimum of 11-15% - a huge difference

Fact number 2 - in no way whatsoever do Glanbia have a monopoly in Ireland - they are the biggest dominant player but there are about 20 Coops in Ireland purchasing milk from farmers (you can argue about the transfer issue but it still doesn't make them a monopoly purchaser). In fact it is being argued that this is Irelands biggest problem in the dairy sector - there are too many players. We need 2 coops in the country

Fact number 3 - Tesco, Dunnes, Superquin etc all get their milk packaged in Glanbia's (or whichever Coop they have a deal with) manufaturing plant, the idea that Tesco's milk is brought somewhere else for packaging is absurd and this applies to all the own brand stuff

Fact number 4 - redundancies have nothing to do with creaming it, lots of companies both at home and abroad have had big redundancies without affecting profit levels. What better time than a recession to let overpaid staff go and rehire lower paid staff. It doesn't mean that anything about profits - and it definately has nothing to do with their price of milk

Fact number 5 - The producers (farmers) share of the annual retail price of 1 litre of milk is 26% in 2009, 34% in 2008 and it was 43% in 1995 (Allowing for 2litre of milk being cheaper the %age goes to 29% for 2009). This clearly highlights that the gap between the producers and the end buyers is growing - therefore between the farmers gate and the kitchen table the level of profits being creamed from it has risen and seen as though Glanbia'a Irish operation is a low profit margin area this shows us that the retailers are robbing the irish consumber by increasing their share of profits on milk. It also shows that in 2009 when the farmgate price of milk collapsed the Supermarkets were much slower to reduce their milk price and made a nice little killing in the process - even when the retail price dropped it did not drop proportionately to the farmgate price

eightyfish · 13-07-2010 12:55PM

Tipp Man wrote: »

Its an enjoyable discussion

Indeed. I want to keep it pleasant if you know what I mean. Quick reply here. I'll get back to you on the Glanbia thing, but

in no way whatsoever do Glanbia have a monopoly in Ireland - they are the biggest dominant player but

Okay monopoly is possibly too strong a word, but they dominate the market in the same way that Tesco dominate the retail market in that they are by far the biggest beast in the cage. They own the biggest brand in the county.

the idea that Tesco's milk is brought somewhere else for packaging is absurd

I said they can take care of the packaging themselves. This was too specific a word. I meant they take care of the production of the product themselves. Of course they don't build their own factory and do it, they outsource the work. They pay far far less for their own brand milk than they do for a litre of Avonmore. This is just a fact.

I'll address the other stuff later...

Tipp Man · 13-07-2010 12:57PM

ardmacha wrote: »

Is this true? Do suppliers of milk for drinking not enjoy a slightly higher price. This has to be available all year around, some other products use milk produced in peak periods (like around now).

Most definately the original statement was not true. Like you say there is a price premium for supplying liquid (winter) milk as you need to supply a certain proportion of your milk in winter to meet the Irish market. There are also all year round contracts. However the vast majority of Irish milk does not fall into these categories and is classed as "Spring" milk

eightyfish · 13-07-2010 01:01PM

Tipp Man wrote: »

Most definately the original statement was not true.

My statement was:

The view that supermarkets somehow pick the price of Avonmore out of the sky is just incorrect. While it is true that the milk in the carton is probably the same, the products themselves are not. Supermarkets make more of a profit on all own-brand products as they take care of the packaging process themselves. This is also why they can generally sell own-branded goods cheaper. Avonmore is more expensive, but you are paying for the brand.

Replace "packaging" with "production". This includes outsourcing production. It is 100% correct.

Anyway... back to work for today... later.

Tipp Man · 13-07-2010 01:02PM

Sue Rocks wrote: »

QUOTE]

So Superquin which is much smaller than Tesco can still match it for price and still make profit?

Cartel springs to mind but don't say it too loudly

Why don't Irish supermarkets publish detailed accounts??

Because they don't have to! Why would they. We have to accept the fact that Irish wage increases have driven the prices up over years and we are paying for it now[/QUOTE]

They don't have to because it suits them not to - the foreign retailers call Ireland "Treasure Island" due to the huge margins in this country

You certainly won't find me arguing that Irish wages are too high - I completly agree - my point is that even with the high wages the supermarkets are still taking us for a ride. As I said in my previous post the %age of retail price paid to farmers has fallen from 43% in 1995 to 26% in 2009. Don't forget that wages have a large impact on a farmers production costs also

Tipp Man · 13-07-2010 01:06PM

eightyfish wrote: »

My statement was:

Replace "packaging" with "production". This includes outsourcing production. It is 100% correct.

Anyway... back to work for today... later.

No the statement which Ardmacha quoted and questioned was

"Glanbia pay the same price for milk no matter what product it goes into. Milk is the footfall driver, but they also make Kilmeaden and Yoplait, which is where they make their profits from the milk. They made a pre-tax profit of €97.4M in 2009. "

And technically none of it is true

eightyfish · 13-07-2010 01:14PM

Tipp Man wrote: »

No the statement which Ardmacha quoted and questioned was

Apologies.

Tipp Man wrote: »

And technically none of it is true

How is that information not true?

Okay I really gotta stop posting now!

14-07-2010 12:19PM

It's not true because the irish operation made a big loss.
One does not cross subsidize the other as this would be bad business practice.

Tesco,you can bet your bottom dollar made a significant profit on the milk it bought from glanbia.The only cost it had was the cap ex on the fridge and the electricity to run it,their staff don't touch it.

donkey balls · 14-07-2010 09:36PM

having worked in the sector for a while i can confirm that Dunne Stores get their(own brand milk) from Donegal,which is in turn brought back to a distribution center then sent to their stores were the staff put it on the shelf.
as for the likes of glanbia/bennans/irish pride etc the local delivery guys stack it onto the shelfs,afaik/remember Dunnes have more stores than Tesco here in the republic.
Also tesco out sourced their transport operations to an English company who pay their drivers the min wage and have slashed the costs to their sub contracters yet their prices are still high:rolleyes:

eightyfish · 18-07-2010 10:09AM

Tipp Man wrote: »

Fact number 1 - Glanbia made a profit of 97.4m in 2009, ALL of which was made by their foreign operations

They own the Avonmore brands. The Avonmore milk costs more because you are paying Glanbia for the brand.

Fact number 2

Addressed earlier

Fact number 3

Addressed earlier.

Fact number 4 - redundancies have nothing to do with creaming it

If you don't think redundancies are an indication that a company is not doing well then maybe you should be posting in the Conspiracy Theories forum. Superquinn is completely unionised - do you think the unions would have allowed 400 redundancies without a fight if they were not convinced the company wasn't doing well?

Fact number 5 This clearly highlights that the gap between the producers and the end buyers is growing

I don't doubt your figures, but again the view that this price gap is nothing to do with anyone in the supply chain, who are all being paid more than anywhere else in Europe (a fact you have repeatedly ignored), and all down to the supermarkets is simplistic.

Once again they can all get own brand milk elsewhere and sell is cheaper while still making a bigger margin than on branded milk.

If you can't see the simple fact that higher wages and higher costs in this country also contribute to higher prices all along the supply chain, then there's not much else to say.

18-07-2010 05:37PM

eightyfish wrote: »

If you don't think redundancies are an indication that a company is not doing well then maybe you should be posting in the Conspiracy Theories forum. Superquinn is completely unionised - do you think the unions would have allowed 400 redundancies without a fight if they were not convinced the company wasn't doing well?

You must have missed what the main player in the market is doing?

I don't doubt your figures, but again the view that this price gap is nothing to do with anyone in the supply chain, who are all being paid more than anywhere else in Europe (a fact you have repeatedly ignored), and all down to the supermarkets is simplistic.

Once again they can all get own brand milk elsewhere and sell is cheaper while still making a bigger margin than on branded milk.

NI is the other source where the price paid to the farmer is the same pretty much as down south.
That point was addressed by Tipp man earlier.Did you miss that too?
It's 29c a litre to the farmer at the moment in the south versus 25p a litre in NI ie much the same or in fact a few cent more in NI..
In fact the price paid today versus the price paid to the NI farmer in 1995 is virtually the same - source.

If you can't see the simple fact that higher wages and higher costs in this country also contribute to higher prices all along the supply chain, then there's not much else to say.

The major fact that I can see is the tesco's of this world are creaming usurous profits from Irish food producers.
What they pay their staff isn't stopping them opening more stores to grow their usary.
A farmer cannot strike,he has to keep rearing his cattle and milking his cows or fertilising his crops so the large multiples have him/her over a barrel imorally..a lesser known fact than the mar dhea sexy treatment they give fair trade coffee.
Last year Ireland produced less milk than it did in 1983 by the way on a substantially smaller number of farms.
I'll bet the profits were a lot greater in 1983.In fact I know they were,given what costs were 27 years ago versus today.

FREETV · 18-07-2010 11:58PM

Deleted User wrote: »

You must have missed what the main player in the market is doing?

NI is the other source where the price paid to the farmer is the same pretty much as down south.
That point was addressed by Tipp man earlier.Did you miss that too?
It's 29c a litre to the farmer at the moment in the south versus 25p a litre in NI ie much the same or in fact a few cent more in NI..
In fact the price paid today versus the price paid to the NI farmer in 1995 is virtually the same - source.
The major fact that I can see is the tesco's of this world are creaming usurous profits from Irish food producers.
What they pay their staff isn't stopping them opening more stores to grow their usary.
A farmer cannot strike,he has to keep rearing his cattle and milking his cows or fertilising his crops so the large multiples have him/her over a barrel imorally..a lesser known fact than the mar dhea sexy treatment they give fair trade coffee.
Last year Ireland produced less milk than it did in 1983 by the way on a substantially smaller number of farms.
I'll bet the profits were a lot greater in 1983.In fact I know they were,given what costs were 27 years ago versus today.

When the Euro rate increases again in value against the Sterling as it is slowly at the moment, those of us within a couple of hours drive of the border in the North have the option of using those plug in type coolers available in Lidl or similar and buy in lots of milk, groceries, toiletries in particular, clothes, shoes and buy in bulk to make savings and fill up the large freezers at home and buy the own branded goods from Supermarkets to make further savings. As Vat is rising to 20% soon in the North and the cost of petrol is higher since the last budget here then buying more in bulk quantities is the only way to make any significant savings from the likes of LIdl, Sainsburys, Tescos etc. If one can get what they need and want to go North because of the exorbitant prices for almost everything here then fair play to them for making the choice to go to Down, Armagh or Belfast. People need to write to their local TD'S and whinge to them about the high cost of living here. Dairy products, meat and Bread should be lower for a start. Supermarket own brand milk, I found it disgusting when I compared it to the likes of Avonmore and Premier Milk. Milk sold in Lidl is watery, in particular their semiskimmed low fat milk but still tastes nicer than a certain Irish supermarket milk even though it may be produced somewhere else in the EU. You get what you pay for and own brand milk isn't necessarily a quality product even though it is cheaper.

eightyfish · 19-07-2010 08:43AM

Deleted User wrote: »

You must have missed what the main player in the market is doing?

What has that got to do with 400 redundancies indicating Superquinn is not "milking it".

Deleted User wrote: »

It's 29c a litre to the farmer at the moment in the south versus 25p a litre in NI ie much the same or in fact a few cent more in NI..

I did see this pointed out in post 25. Yet the supermarkets can still sell the NI milk cheaper. Middle man? Also SQ buy their milk from the south and avoid Glanbia, and can sell it cheaper. My point here is quite simple: It's not just the supermarkets that are at fault for high prices.

19-07-2010 12:44PM

eightyfish wrote: »

What has that got to do with 400 redundancies indicating Superquinn is not "milking it".

Simple.It means the reason for the job losses are nothing to do with the excessive margin they share with others on food.

I did see this pointed out in post 25. Yet the supermarkets can still sell the NI milk cheaper. Middle man?

Nope.
No middle man.It actually costs more for them to get milk from up there as opposed to sourcing it from Irelands largest plants at Bally ragget or Ballytore.The explanation is simple,they use that NI supply [or in the case of some of them,the threat of that supply] to bargain down the price they get the south milk for.
They put it on sale at the cheaper price to make that point even though they are getting it for much the same price.
It's no conspiracy,it's what the southern dairies will openly tell any farmer what the multiples will do.
It's perfectly legal-even though ,it's actually another form of predatory pricing.

Also SQ buy their milk from the south and avoid Glanbia, and can sell it cheaper. My point here is quite simple: It's not just the supermarkets that are at fault for high prices.

Well your point is wrong.
Any variance in price between multiples on the price of ROI sourced milk that they sell is small compared to the margin they have on it.
It's done for 2 reasons,(1) for to make it the footfall product and (2) as already explained to beat the southern milk price down.

Fair trade in milk my aunt sally and as I said the farmer can't strike.
Occasionally you'll see them doing a slow trolley protest in some supermarkets but thats about it.
If they blockade,they're arrested.
If they strike,they have to throw out their milk and get done for pollution which they won't do.

Think about that ,the next time you are buying food.

azzie · 19-07-2010 04:41PM

Completely unscientific, but a comparison on the sort of things we buy. I stuck to one supermarket in each country (although we'd normally buy some things from Lidl) and although I went for the cheapest price for each item, there aren't any promos here currently as it's a holiday place - lots of Irish people here!
ITEM

TESCO IE

LECLERC

TESCO UK

Chicken breast 595g
5.49
6.03
4.45
Pork sausages 12
4.00
3.50
1.71
Cod fillets
11.99
14.98
10.29
Pork chops 800g
5.52
4.00
4.05
Whole chicken 1200g
4.20
4.74
2.81
1kg potatoes
1.71
1.20
0.89
lemon
0.37
0.20
0.41
1kg carrots
1.29
0.90
0.89
1kg nectarines
3.49
2.55
2.37
1kg apples
2.59
0.76
0.92
Butter 454g
1.79
1.92
2.11
6 eggs
0.99
1.02
1.07
Cream 500ml
2.65
1.00
1.87
200g brie
1.09
0.89
1.64
200g cheddar
1.00
2.00
1.18
Wash up liquid 500ml
0.85
0.25
0.60
Food bags 50
0.62
0.56
0.43
Toilet paper 16 roll
3.16
1.50
2.03
4 kitchen rolls
2.59
0.85
2.60
Arial liquitabs 20
8.99
8.90
4.73
1 kg sugar
0.85
0.72
0.90
Plain flour 1kg
1.29
0.30
0.33
200g salted peanuts
0.59
0.34
0.47
1lt sunflower oil
1.45
1.12
1.19
Tuna chunks in oil
2.29
1.03
2.20
Baked beans x 4
2.99
1.22
1.98
6 litres skimmed milk
4.50
3.42
3.48
1lt tonic
0.75
0.58
0.56
160 teabags
3.04
1.82
0.66
1lt orange juice
0.85
0.99
0.66
70cl gin
12.29
6.87
9.20
1.5kg oven chips
0.97
1.42
0.85
4 part bake baguettes
1.99
2.27
1.18
1 litre olive oil
5.29
2.45
3.76
TOTAL

103.52
82.30
74.47

azzie · 19-07-2010 04:43PM

Mmm - that didn't work very well! Seem to have lost the table. Oh well, the 1st price is Ireland, 2nd France and 3rd is UK

Irish food and drink prices 30% higher than EU average

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