Meat is being sold below cost across Europe, controversial new European Commission figures have revealed - though the price of many other food staples has risen faster than the cost of production.

The retail price of bread was expected to rise 3% on the back of soaring production and raw material costs, but has actually gone up 10%, according to EC statistics released last week.

Oils and fats were tipped to rise 8% but have actually increased 12%. Similarly, milk, cheese and eggs have risen 15% compared with the predicted 12%.

However, meat, which was expected to go up 8% to cover the rising cost of production driven by soaring feed costs, has only risen a paltry 4%.

An EU spokesman refused to speculate further on why price rises had not reached the meat sector, but NFU chief poultry adviser Robert Newbery said the category's dedicated supply chains meant producers were locked into contracts with retailers.

This had given supermarkets the opportunity to hold prices down.

"Retailers have more power over the meat supply chain," he said. "In bread you have to pay the going rate for wheat but it doesn't work the same way for chicken meat."

The figures were in line with recent NFU data showing year- on-year UK chicken production costs up 24%, while retail prices had only risen 10% to 15%, he added.

Though the picture was bleak for meat producers, the figures also raised questions about who was benefiting most from the price hikes on other products.

"The responsibility for the recently observed massive price increases for food at retail level rests with each sector along the supply chain," said EU commissioner Mariann Fischer Boel.

"Overall, the agricultural sector accounts for only 25% of the final price at retail level. The increases in the farm-gate price can therefore only partly explain the price surge at consumer level. There are clearly other forces at work at the different stages of the food supply chain."


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