Butchers unable to buy fresh beef

In its fight against fresh beef price hikes, the GRTU - Malta Chamber of Small and Medium Enterprises has ordered fresh beef slaughterers and distributors not to buy any live animals for slaughter today.

Butcher shop owners will, therefore, not be going to the abattoirs today as no fresh beef is available for sale by distributors, the GRTU said.

The action is being taken following the decision by local beef producers, represented by the Milk Producers Cooperative (KPH), to refuse to sell animals for slaughter unless beef distributors paid substantially increased prices for the animals, the GRTU said.

Beef slaughterers and distributors, represented by the GRTU, had signed an agreement with KPH in October 2002 that established the prices of cows and calves sold by farm owners for slaughter, the GRTU explained. The distributors buy the live animals and have them transported to the abattoir for slaughter, so the fresh beef is sold to butchers, who, in turn, resell to the consumer.

The GRTU said the agreement only lasted some months as "the farm owners soon realised that if they stick together and refuse to sell live animals at the agreed rates they would obtain more money", the GRTU said.

The limited supply of good-quality animals for slaughter, coupled with the fact that farm producers have a well organised cooperative, gave them a strong hold on the market, it said.

Until 2002, beef distributors benefited from a Beef Intervention Scheme, which subsidised the price they paid to producers. Since then, the government subsidy went to producers under the Dairy Compensation Scheme in conformity with EU regulations.

The GRTU is arguing that farm producers cannot benefit from the local captive market for fresh beef while still enjoying protection and being heavily subsidised by the government.

The problem was that distributors could not force butchers to pay them higher prices as the butchers would not be able to pass the price increases to consumers. The traditional beef consumer was very price-conscious, the GRTU said, and would be affected by any price increase. About 95 per cent of fresh local beef was sold through village butchers.

An increase in consumer prices would push the cost of local beef higher than that of imported fresh frozen beef, it said.

Beef distributors had sought unsuccessfully to convince the KPH to hold onto lower prices and the GRTU had asked the Rural Affairs Ministry to intervene and force producers to face the reality that they could not continue to receive subsidies while pushing up prices to consumers and forcing distributors out of business.

A meeting between the GRTU and the KPH has been scheduled for Thursday, the GRTU said. "We need to sit down and agree on an acceptable price structure and, hopefully, settle the issue by next Monday when butcher shop owners go to buy their beef at the slaughter house again."

It has also notified the Rural Affairs Ministry that the Eurocommerce in Brussels has been asked to assist it in representing the case to the EU Commission for the suspension of the subsidy to farm producers if they continued with what the GRTU considered to be "a breach of the EU approved subsidy scheme".