TWO GOVERNMENT bodies which are set to be merged shortly have taken sharply opposing stances on proposals by Minister for Enterprise, Trade and Employment Mary Coughlan for a supermarket code of conduct and ombudsman.
The National Consumer Agency, in a submission seen by The Irish Times, supports Ms Coughlan’s suggestion of a ban on unfair commercial practices in the grocery trade and says retailers should be prosecuted for treating their suppliers unfairly.
In contrast, the Competition Authority, which is being merged with the NCA, is highly critical of the proposals for a code of practice and ombudsman, which, it says, could lead to higher prices for consumers.
The divergence in views between the two bodies is symptomatic of a wider gulf in opinion on the proposals, with consumer groups and farmers backing calls for an ombudsman to investigate disputes between supermarkets and suppliers, and the ESRI and big retailers opposing the imposition of a statutory code.
The differences between the NCA and the Competition Authority are also likely to raise questions about how a merged entity, which has yet to be named, could cohesively represent the interests of consumers and the competition concerns of business.
In its submission, the NCA proposes a general legislative ban on unfair commercial practices involving suppliers and retailers.
It also says the ban could be extended to other sectors of the economy.
The consumer body does not spell out the practices that would be deemed unfair, but says these would be along the lines of those suggested in the minister’s proposed code.
This would include a ban on payments, such as “hello money”, demanded by retailers from suppliers in return for having their products on its shelves.
The NCA says a practice would be deemed unfair if it was “contrary to the general principle of good faith” in a trader’s field of activity.
Any assessment would take into account the strength of the bargaining position of retailers and suppliers, whether the two sides dealt fairly with each other, whether the goods supplied were a special order and the legitimate expectations of both sides.
Individual supermarkets would be liable to audits of their supplier relationships to ensure compliance with the ban.
Where retailers were found to be treating their suppliers unfairly, they could face a range of actions, including court proceedings.
Instead of the ombudsman proposed by the Minister, the NCA says the body resulting from its merger with the Competition Authority would be the most suitable vehicle to enforce the new laws.
Ms Coughlan’s officials in the Department of Enterprise, Trade and Employment are considering 28 submissions received in response to the draft code of practice.