The Minister for Consumer Affairs, Mr Kitt, intervened in the Glanbia milk controversy yesterday and warned companies they should be upfront with consumers and not seek to blame price rises on irrelevant factors.
He was commenting on the decision by Glanbia, the largest liquid milk processor in the State, to replace its one-pint milk packs with half-litre packs which contain 62 ml less milk at the same price.
Mr Des Geraghty, the SIPTU president who raised the issue, said the management at Glanbia had claimed this was a move from imperial to metric measurement which is reasonable enough. What is not reasonable is to continue charging the same price.
"In effect this is a major price hike being disguised as part of the euro changeover.
"If this practice were to become widespread, then virtually every commodity will rise in price thereby increasing costs for all consumers and this will drive up inflation," he said.
But yesterday, a spokesman for Glanbia denied the issue had anything to do with the changeover to the euro, and said it was to do with the change from the imperial system to metric.
Mr Michael Patton said there were additional costs involved in producing the smaller packs for the half litre and that was the reason for the price increase.
"Our other sizes of milk cartons, litre and two-litre packs, will not be increasing in price and they represent 87 per cent of our liquid milk sales. Pints only represent 13 per cent of our business," Mr Patton said.
He said the argument that those who purchased milk in pint cartons did so to prevent milk going off, were wrong. He said a litre of milk would remain fresh in a fridge for seven days.
But last night Mr Kitt said the consumer needed to be aware what Glanbia had done represented a significant increase in the price of milk which was not influenced by outside factors, but was at the discretion of the company.
"Indeed there is a moral obligation on the company to make this abundantly clear in any announcements they make about the matter. I would have hoped that if the company thought it necessary to rationalise their production size this way, the responsible thing would have been to also adjust prices accordingly," he said.
"However, it is a matter for the consumer to decide whether or not in the light of this increase they wish to continue to purchase the company's product or perhaps switch to buying different units such as a litre or two-litre pack."
Ms Deirdre Clune, the Fine Gael spokeswoman on environmental and consumer protection called on the Government to empower the Director of Consumer Affairs to protect consumers from price increases because of the euro changeover which must not be used as an excuse for "ripping off" consumers.
Mr Pat Rabbitte, Labour's spokesman on enterprise, trade and employment, called for a price freeze to protect consumers from unjustifiable increases because of the introduction of the euro.
The Glanbia decision was also criticised by RGDATA, representing the grocery trade. A statement said it was appalled Glanbia had used the introduction of the euro to increase prices to consumers.
However, the Irish Creamery Milk Suppliers' Association came out in support of Glanbia and said its actions were completely justified in light of wage increases and other factors which had seen the price of milk remain unchanged since January 2000.
"All the social partners must face economic reality. The reality is that wage increases have outstripped productivity and therefore prices will have to increase. The price adjustments introduced by Glanbia are inadequate to cover the increased costs faced by farmers.
"In the past decade, the price paid to farmers has fallen significantly in real terms," said Mr Pat O'Rourke, the ICMSA president.