The ban on below-cost selling of food and restrictions on the size of out-of-town superstores are to be reviewed to see if they are in the interests of consumers, the Minister for Enterprise, Trade and Employment, Mr Martin, has revealed. John McManus reports.
His comments followed a call yesterday by the National Competitiveness Council (NCC) for the abolition of both measures. The NCC claimed the rules contribute to the higher food and consumer goods prices that make the Republic the second-most expensive country in the euro zone.
Mr Martin said yesterday that he was "open to discussing" the ban on superstores with the Minister for the Environment, Mr Roche, who is responsible for the planning guidelines which limit the size of retail outlets.
A spokesman for Mr Roche confirmed to The Irish Times last night that the issue "was on the agenda for consideration in the near future".
Mr Martin said: "Clearly there are issues coming at us now - highlighted by the competitiveness council - that we cannot ignore."
He added that the views of consumers on the issue had not been properly heard to date and "in that context I would be open to reviewing it," he said.
The Swedish home furnishing giant, Ikea, is one of a number of international companies that have lobbied the Government on the issue since the limit was introduced in 2000. Others include Walmart, the world's largest retailing chain.
Mr Martin said that his Department would also carry out an internal review of the groceries order, which bans below-cost selling.
Supporters of the order claim it is necessary to prevent predatory pricing by the large multiples which would drive small players out of the market, reducing choice for consumers and driving up prices in the long term. It has been reviewed several times since its inception in 1987, but has been left in place.
"We will be reviewing it and looking at the pros and cons of the impact that it is having on prices and competition," said Mr Martin.
The NCC reports annually to the Taoiseach on the management of the economy.
In its 2004 report, published yesterday, the council said "with food prices in Ireland higher than in any other euro-zone country, there is evidence that the ban has undermined vigorous price competition between retailers at the expense of consumers".
The report also states that the "country-wide exclusion of large retail warehouses. . .undermines competition and reduces consumers' range of choice and access to lower prices."
The chairman of the council, Mr William Burgess, warned that although the economy was doing "extraordinarily well", there was a need to "further improve our competitiveness to ensure that the current strong economic performance is sustained into the medium term".
Ireland remains the second-most expensive country in Europe for goods and services after Finland, according to the NCC, while prices are 8 per cent above the level that keeps the economy competitive enough to sustain full employment. In addition, the regulatory burden on business has increased significantly.
Other measures called for by the NCC include lower taxes on both business and individuals along with more flexible national wage agreements.
Better regularisation in areas such as energy, transport and professional services was also needed.
The decline in Ireland's competitiveness was a telling legacy of Mr Martin's predecessor, the Tánaiste, Ms Harney, said the Fine Gael spokesman on enterprise, trade and employment, Mr Phil Hogan. He accused her of "free-wheeling" at the end of her seven-year tenure.