E-Malt.com News article: Ireland: The future of malting barley production in Ireland is in danger - National Grain Committee Chairman comments on crisis

IFA National Grain Committee Chairman Colum McDonnell said that the price paid for malting barley is an insignificant cost in the price of a pint at just over one cent, the Guardian published on August 20.

Malting barley growers once again are being denied the opportunity to recover legitimate cost increases while at the same time Guinness and Greencore Malt have achieved full cost recovery and increased margins by passing significant price increases to consumers.

Diageo had earlier resented criticism, but Mr McDonnell said: "Once again Greencore Malt and Diageo (Guinness) are abusing their dominant market position offering a derisory price of €165/t to growers for a quality product, way below the cost of production, while at the same time asking consumers to pay more for their pint.

"This time last year food retailers and manufacturers were up in arms as grain prices rose dramatically in response to tightening world supplies as weather impacted negatively on yields. They looked for and obtained substantial price increases, achieving both cost and margin recovery. Growers saw the first substantial price rise for grains after 3 decades of falling prices. However the honeymoon has been short lived as energy and fertiliser costs, two of the major expenditure items increased, by over 66% in the last 12 months and grain prices have fallen by up to 25%. Production costs have now gone up by over €250/ha while malting prices have fallen by an equivalent amount on a per hectare basis.

"Once again consumers and farmers are being hoodwinked. Consumers are being asked to pay an additional 5-cent for the pint, while farmers are being asked to take close on a 25% cut in price. Malting barley growers are being denied their right to recoup legitimate cost increases from the market at a time when Guinness are seeking a price increase of eight cent on the price of a pint. If growers were to get the equivalent of one cent of this increase it would almost double the price they receive for their malting barley.

"Greencore Malt and Guinness are in a position to pass on or back increased costs to their customers and suppliers. Growers unfortunately are left at the mercy of the multinationals, as they do not have the option to pass on increased costs. The day is fast approaching when malting barley will no longer be produced in Ireland if growers cannot recover legitimate cost increases and make a decent margin."


22 August, 2008