Producers nervous about lamb sale

Woolworths supermarkets will cut the price of lamb by 30 per cent in a bid to sell more.

Woolworths says it will cut some prices to 2005 levels, and bear the costs of the reduction, in a bid to claw back some of the 25 per cent fall in demand for lamb.

Ian McColl, president of the Sheepmeats Council, says he was informed about the advertising campaign and price cut last week.

He says lamb producers still fear they'll be hit with a price cut, especially if Coles reduces its prices as well, sparking a lamb price war.

"And we have said to them that we want to keep the lines of communication open, so that they understand our concerns and our cost of production and that long-term price cutting may have negative consequences on our ability to meet supply in the longer term."

Source: http://www.abc.net.au/rural/news/content/201208/s3571513.htm