Wednesday, July 18, 2012

Are Australian Retail Beef Prices Fair to Producers?

With the dominance of the two major supermarket chains in Australia unlikely to change much anytime soon, the latest claim about rip offs involves the sale of beef.

Producers are claiming that these two major customers get about 50% of the monies from beef with the producer getting at most 30%, the balance being chain costs such as freight and killing costs. Worse, most of the retail price increases over a few years have gone to the supermarkets with producer returns going down.

This is in contrast to the US where producers seem to get about 50% of the retail prices.

Many beef producers are not happy with this and wonder how they will ultimately be able to continue to produce more food with their costs going up and producers seeming to get less and less of the returns, based on a proportion of final retail prices, and the retailers getting more.

Is this another instance of unwelcome price gouging by the supermarkets? I believe that consumers do not resent a fair price especially where a fair and reasonable part of that price is returned to producers. BUT…….is that so?

Several farm lobby groups have been investigating and it does seem that comparisons might just indicate that producers have a point.

No comments: