Caroline Spelman, DEFRA secretary, has said that the government will keep a close eye on how retailers go about cutting prices for consumers. The warning came after Tesco announced a Big Price Drop campaign with cuts across 3,000 products.
The NFU has said it si concerned that the extent of the cuts will force Asda, Sainsbury's and Morrisons to follow suit, and it they do the costs must not be passed back to the farmers.
In an interview with Farmers Weekly (26 September), Mrs Spelman said that price cuts were good news for consumers.
The message that UK farmers are not in a position to subsidise in-store cost-cutting promotions, has also been reinforced by the National Beef Association.
The NBA said while there had been an increase in prices for beef animals there had been a continuing rise in the cost of feed and fuel, so farmers’ margins remained tight.