Don’t be fooled by super price cuts, says butcher

By Wendy Spooner

Talk to your local butcher and you get a whole new side to the lamb roast marketing hoopla that has consumed media this week. 

While supermarket giant Woolworths has grabbed plenty of the headlines about big price cuts to lamb on their shelves, in the shops across town, butchers make no bones about what the local market is all about.

Country Capital Meats owner Greg Townsend, from the Centrepoint complex, was pretty dismissive of the Woolies claims about so-called major price drop in lamb prices this week.

He says lamb prices in saleyards dropped about four to six weeks ago – but Woolworths only announced its price cuts of up to 30 per cent because it was locked into forward price contracts.

“They’re big noting themselves now and saying ‘We’re bringing prices back’,” Mr Townsend said.

His company responded immediately to the saleyard price drops six weeks ago.

“They’re not giving anything the chop – what they’re doing is not as high margin as it has been,” he said.

“They have to honour those contracts.”

But Woolworths general manager of Fresh Food, Pat McEntee, said only a small number of lamb was sourced by Woolworths using forward contracts.

“We don’t big note ourselves,” he said.

Mr McEntee said a “high percentage of lamb” was bought through farmers and some through saleyards; he said they sourced about 80 per cent of lamb at this time of year through growers.

“Woolworths do have some forward contracting, predominantly in cattle,” he said.

“Woolworths has our own team of livestock buyers ... 11 people around the country ... including one in Tamworth.

“We’re processing about 5000 lambs per week in Tamworth –  all of those lambs sourced in the North West and New England areas.” 

The giant retailer announced that from last Monday, “Woolworths shoppers will enjoy more than 30 per cent off lamb chops, more than 20 per cent off lamb cutlets and 20 per cent off racks of lamb, lamb leg roasts and lamb mince.”

As part of the price cuts, a Woolworths-bought lamb leg roast, previously $13.49/kg, was now $10.79/kg.

But Mr Townsend scoffed at the price reduction.

“We’ve never been that dear, even when lamb was at its dearest,” he said.

At Country Capital Meats this week, legs of lamb were selling for $8.99/kg. 

Before the high prices of the past 18 months, they used to sell “in excess of 100 lambs a week”, but the weekly figure had dropped to about 60.

When they dropped their prices six weeks ago, there were dramatic results.

“Last week, we had sides of lamb on for $39.90 ... we sold 110 sides of lamb,” Mr Townsend said.

He said normally it was $75 to $80 for a side of lamb – until they dropped their prices.

“The general public need to get out and look at prices,” he said.

Mr Townsend said there had been “buyer resistance” in Australia because of high lamb prices for the past 18 months.

Plus, he said the world market had “dried up” and that the high Aussie dollar “plays a part”.

Livestock and property agent Patrick Purtle of Purtle Plevey Agencies agreed the high Australian dollar was hurting exports.

“Our trading conditions due to the Australian dollar have been very difficult,” Mr Purtle said.

But Woolworths said overseas demand for Australian lamb was strong.

“International demand for Australian lamb is strong – last year, 49 per cent of all Australian lamb was exported to places like the Middle East and North America,” the Woolworths announcement stated. 

“In fact, the Middle East bought almost as much lamb as Woolworths did last year (12 and 13 per cent respectively).” 

Mr Purtle said anything which helped drive up domestic consumption was good; he cited McDonald’s new lamb burger.

“Anything which will increase consumption and drive sales is a good thing,” he said.

“We’d imagine Coles would follow suit (with what Woolworths has done) ... we’d be interested to see if these new campaigns will create bigger consumer consumption.”