As The Grocer went to press, foot and mouth appeared under control. Even so, there are many more turns to be navigated before the industry is again free of its grip. As it stands, the EU export ban on meat will remain in place until 25 August at the earliest, meaning that in the interim the UK will become awash with meat that would otherwise have gone to export. With supply outstripping demand, the temptation for retailers to drop meat prices will be great. Enter Gordon Brown, who last week pledged to support farmers by personally speaking to retailers about fair pricing and "hold them to it". Yet can the PM really intervene with the market forces at play, or is this spin over substance? The PM, and the farming industry, certainly don't want to see a repeat of the damaging price fluctuations that occurred after the 2001 crisis. Immediately after that outbreak, wholesale meat prices rose 10% because of a shortage of meat due to the livestock movement ban. But once that was lifted, retailers introduced extensive and lengthy price cuts due to the oversupply. Farmers claimed they were being screwed and reported that abattoirs were paying low prices for animals because they were under pressure from the supermarkets to keep prices down. Pork prices were hit hard, with retailers slashing the price of pork by £1/kg on boneless shoulder and by £2/kg on fillet. Tesco launched a special promotion to boost sales of shoulder and belly of pork because these cuts of meat had been hit the hardest. Within three months, British pigs were the cheapest in Europe at about 92p/kg for dead meat compared with a high of £1.28/kg in France and Germany. Downing Street has confirmed that Brown has been speaking to businesses but won't comment on the meetings. It will inevitably score him PR points with farmers, though. Retailers, including Sainsbury's, say they have already met Brown and industry sources say talks have centred on the PM encouraging retailers to continue sourcing UK produce and maintaining a sensible price. NFU president Peter Kendall said Brown has shown he is not naive about food chain mechanics. But what clout the PM has in preventing retailers from setting their own prices is a moot point. "Brown's promises are just talk," says Richard Hyman, MD of Verdict. "I don't really see he could ensure retailers pay a fair price for meat. We live in a world where from time to time these things happen and it affects supply, which in turns affects the price. "Are supermarkets going to profit from this situation in a way that rips consumers off? I don't think so. It's just not workable. When all this dies down they will want people to come back into the market and buy meat so they need to reassure consumers all the way up and down the food chain." The BRC also questions Brown's move. "Who's to judge what 'fair' is? It's the market that determines price," says a spokesman. "It would be wrong for a politician to attempt to influence the open market. Brown has shown himself to be a free marketer and it would be anti-competitive for him to attempt to intervene. It's extremely hard to believe that's likely. The Competition Commission exists to preserve competition, not look after individual groups. Clearly, it would have something to say on the matter, but it is wrong to suggest supermarkets don't support UK agriculture. They pay a fair price and will continue to do so." Yet retailers would do well to heed Brown, says Graham McMillan, boss of public affairs company Open Road. "It it not appropria te for a PM to have formal powers over pricing but in exceptional circumstan ces it is perfectly reasonable for him to use his influence. This has happened a lot with the issue of climate change and retailers have responded very well." Brown must rely on the power of exhortation, but his arguments can be pretty persuasive, adds McMillan. "There is the hidden threat of the Commission inquiry. He has no influence over its findings but it will be in the back of the supermarkets' minds."pricing so far Pork chops Asda and Tesco have each dropped the price of pork chops by 12p/kg to £3.62. Sainsbury's has taken 11p off the price, now selling at £3.63/kg, while Morrisons has seen no change at £3.63/kg. Lamb leg Sainsbury's has increased the price of a leg of lamb by £1 to £6.69/kg, but this is in line with Asda and Tesco, which both charge £6.68/kg. Morrisons has kept its price at £5/kg. Beef mince Prices have remained constant for beef mince with no change across the four big retailers. Asda, Sainsbury's and Tesco are each charging £438/kg, and Morrisons is 1p more expensive. Rump steak A mixed picture, with Asda taking £1.98 off its price tag to £7/kg, Sainsbury's staying the same at £8.98/kg, but Tesco and Morrisons both increasing their prices to a more standard £8.98/kg, a rise of £2.50 and £1 respectively.
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