Madam, – Frank Murray (February 12th) is wrong when he says that “major retailers now buy directly from global FMCG [fast- moving consumer goods] manufacturers for all their stores, including those in the Republic, at one universal cost price and are therefore making super-premium profits in the Republic”.
Global FMCG manufacturers have insisted that retailers in the Irish market buy from their local sales and distribution subsidiaries in Ireland and have refused to make their products available through any other sales channel. These internationally branded products are frequently only available to retailers here at significantly higher prices than in the UK.
Hence Mr Murray is misinformed when he claims that retailers here are making “super-premium profits” because the global purchasing he identifies as the source of these profits does not exist. His conclusion that three named retailers have set up their businesses here to take advantage of this non-existent purchasing situation is therefore also incorrect.
In fact, the three he names are indigenous Irish retailers and provide much-needed employment to thousands of people.
This whole purchasing issue has been brought into sharp relief by the decline in the value of sterling, which has accentuated the problem and accelerated developments already under way in the retail sector. Many retailers are now establishing new supply chain structures and processes to overcome the barriers imposed by the global FMCG manufacturers.
Retailers in Ireland work hard to get the best value for their customers and have been negotiating further with their international supply partners to maximise the savings that Irish consumers should be seeing because of the devaluation of sterling. Retailers should be commended and encouraged for this approach. – Yours, etc,