Shops deny BSE profiteering

A row broke out yesterday as farmers claimed that they had seen the price of beef drop sharply since the BSE crisis, while supermarkets and butchers were keeping prices high.

But retailers immediately denied this, saying that their profit margins had been hit hard and that prices had come down to attract customers who had been made wary of beef.

Jim Watson, past president of the Livestock Auctioneers' Association and chairman of Midland Marts, said that the average price farmers could sell carcasses for had dropped from pounds 1 a kilo last March before the BSE crisis, to 70-75p now. For a live animal, whose average weight was 600 kilos the average market price per kilo was now 90p compared to pounds 1.20 18 months ago.

"It is not a level playing field and farmers are making very, very substantial losses," said Mr Watson. "Supermarkets and butchers' shops have stayed at the same prices they were charging eighteen months ago. Prices in the shops have not gone down anything like they have come down in the market. If the farmers want to stay in business they have to go on producing meat for a good return. They don't like to see their animals losing money while someone is making a lot of profit."

But Duncan Sinclair, economics policy analyst at the Meat and Livestock Commission, said: "Retail prices in terms of changing are slower to change than producer prices. They don't move up and down so much."

And a spokeswoman for Sainsbury's said the supermarket was not making any more profit on beef: "Since BSE we can't use as much of the cow under the new rules, and so because we can use less of it we are paying less ... we are not making any extra profit."