TÁNAISTE MARY Coughlan says she is pressing ahead with a code of practice for the grocery sector to regulate the competing interests of retailers and suppliers.
Ms Coughlan, Minister for Enterprise, Trade and Employment, said a code was needed to ensure that the best interests of consumers were served, while recognising the importance of a “vibrant and competitive” food industry and retail sector.
She was responding to a report published by the Competition Authority yesterday which finds that food prices are falling because increasingly price-conscious consumers are shopping around more and driving greater competition between retailers and their suppliers.
As reported in yesterday's Irish Times, the study blames high taxes and high costs of doing business, as well as lax consumer attitudes, for the fact that prices are higher in the Republic than in Northern Ireland.
The authority yesterday urged the Government to respond to the fall in retail prices with reductions in the cost of doing business to help Irish suppliers compete and survive.
“Falling retail prices are proof that competition works,” said authority chairman Bill Prasifka.
“Retailers and their suppliers are responding to consumers’ changing shopping patterns. Reducing the cost of doing business in Ireland is key to helping suppliers of retail goods to be competitive.”
Ms Coughlan said the study confirmed that there were no major systemic problems in the retail sector, although some sectors were more flexible than others.
It was clear that consumers wanted everyday low prices now, she said.
Retail Ireland, an Ibec sub-group, said it was essential that the Government took action to address Ireland’s high cost-base. “In this regard, it is particularly disturbing that the Tánaiste has spoken of a code to govern retailer-supplier relationships, just when prices to the consumer are falling.” mHowever, smaller retailers, farmers and pharmacists were critical of the report. RGdata, which represents family-owned grocers, said it left people “none the wiser” about profit levels among large retailers.
“The companies operating here go to inordinate lengths to conceal their turnover and profit levels,” said RGdata director general Tara Buckley. “The authority has the powers to pierce this corporate veil of secrecy but yet again has failed to take this step.”
The president of the Irish Creamery Milk Suppliers Association, Jackie Cahill, called on the Government to reintroduce the Groceries Order in order to regain control of the food sector from the giant retail multiples.
The Irish Pharmacy Union criticised the authority for failing to address important issues relating to the cost of medicines.
IPU president Liz Hoctor said it was incomplete and unbalanced because it failed to take account of the fact that pharmacists were prevented from offering patients the choice of cheaper generic medicines.
Fine Gael’s enterprise spokesman Leo Varadkar said falling grocery prices were just “the tip of the iceberg” and consumers were still being ripped off on the cost of goods and services.
Main points
GROCERY SECTOR
- Retailers are putting pressure on suppliers for better deals and finding alternatives.
- Prices to consumers have fallen as a result.
- Encouraging more competition at retail level – through changes to the planning system would benefit consumers further.
CLOTHING SECTOR
- It is more difficult for clothing retailers to find alternative suppliers and renegotiate prices.
- Consumers are benefiting from more and bigger discounts in sales.
PHARMACEUTICAL SECTOR
- Medicines are highly regulated to protect public health and so imports are extremely limited.
- Price reductions must come from the State leading the way and reducing the prices it pays for medicines.
