National Consumer Agency chief welcomes grocery price war

The head of the National Consumer Agency has commended the State's leading supermarkets for waging a vegetable price war in the run-up to Christmas, despite fierce criticism of the promotions from the Minister for Agriculture and farming lobby groups.

In recent weeks Lidl, Aldi and Dunnes Stores were selling some produce, including carrots, onions, potatoes and sprouts, for as little as 5 cent a kilo. They insisted they were covering the cost of the promotion but the Irish Farmers' Association (IFA) claimed that farmers were being forced to take the hit and it staged multiple protests over Christmas week.

However the National Consumer Agency’s chief executive Karen O’Leary described the price war as positive and said there was no evidence that primary producers had been coerced into selling vegetables at unsustainable prices.

'Loss leaders'
"I think it's great," she told The Irish Times. "And I don't think anyone has proved that there has been a downside. We all know what loss leaders are and I can see nothing wrong with that practice," she said.

“The farming community is entitled to its opinion but that does not mean that what they say stacks up,” Ms O’Leary said. “There are certainly consequences to how we spend our money as there are consequences to everything that we do, but my job is to represent consumers and lower prices are good for the consumer”.

Ms O'Leary's stance puts her at odds with Minister for Agriculture Simon Coveney, who said before Christmas that he planned to introduce new legislation "within weeks" to combat supermarket price wars.

He expressed concern about the dramatic price reductions and said that while a new grocery code, which is likely to be introduced by the end of February, will not include price controls, it will protect producers through a range of measures. Among the proposals under consideration are new rules to ensure that all contracts signed by retailers and producers “are fully respected for the lifetime of the contracts”.

Small suppliers
Mr Coveney believes this measure is essential to stop retailers shifting the goalposts on small suppliers, many of whom are absolutely dependent on the business for survival.

Ms O’Leary said she would welcome any elements of the code which improved transparency in the sector and expressed the hope that it would “do what it is supposed to do” and lead to enhanced protection for both consumers and producers. However she said she would be opposed to the reintroduction of any ban on below-cost selling.

Meanwhile the National Consumer Agency has urged consumers to use any gift vouchers received as Christmas presents as soon as possible.

Recent research conducted on its behalf found that half those who get vouchers do not check the conditions on them, while a similar number have, at some stage, let a gift voucher expire.