A supermarket pricing war on lamb has sparked fears the local red meat industry is being undervalued and farmers will be forced to pursue stronger export markets.
The fallout from supermarket giants Coles and Woolworths slashing the price of lamb by up to a third will be felt across Australia's lamb and beef sectors as outlets and independent butchers scramble to compete with the low prices, industry leaders claim.
The supermarket wars which brought the nation $1-a-litre milk and heavily discounted bread has now extended to lamb, with Coles and Woolworths both drastically reducing the cost of the meat in a bid to "help Australian families combat soaring household costs".
Sheep producers warned that if farm gate prices were hit by the price war, they would be forced to export their lamb.
Almost 50 per cent of Australia's 5.5 million sheep slaughter is exported to overseas but in WA that figure is as high as 70 per cent.
Woolworths general manager of fresh food Pat McEntee said the subsidised price cut to lamb would cost the company $13 million over the next 12 months and the cuts were about increasing sales.
Sheepmeat Council of Australia vice-president Jeff Murray, a WA sheep producer, said while it was good for consumers to get high quality lamb at bargain prices it would force lamb and beef prices down.
"It's going to drive the price of lamb down, one way or the other," Mr Murray said.
He said the supermarket price wars were detrimental to Australian farmers and he believed consumers did not value the high quality local product they received.
"It doesn't matter if it's vegetables or milk or bread or meat . . . they just take it for granted that it's going to be there next week or next year and it may well not be."
York sheep and crop farmer Kevin Binning said price cuts emphasised the importance to producers of the strong export market."At a time when we are hopefully rebuilding our flocks and competing with fairly strong grain prices, they're sending the wrong signals to producers as far as lambs go," Mr Binning said.
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