No ‘draconian’ price setting measures to tackle inflation, Minister says

The Government does not want to use “draconian” price setting measures in the face of rampant inflation and charges of profiteering, Minister for Retail Neale Richmond has said in advance of talks with the sector.

The retail forum, a group comprised of Government officials and industry representatives, is being convened by Mr Richmond on Wednesday to discuss the issue – but the Dublin Rathdown TD has signalled in advance that the Coalition would prefer to see prices for consumers fall without using the strongest weapon available to it.

Under the Consumer Protection Act 2007, the Government can cap prices on everyday essential items like bread, milk and eggs.

“The legislative tools are quite draconian,” Mr Richmond said, adding that the Government didn’t think there was a need to use them and that it didn’t want to use them because they “come with serious consequences”.

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However, he said certain profit margins in the sector were “way and above” normal. “I’m all for businesses making a profit, but there’s a big difference between profit and profiteering,” he said. The government’s preference, he said, is for the sector to agree to bring down prices as has been the case in other countries in the EU, including France, rather than using price controls as have been rolled out in Croatia and Hungary.

The meeting of the retail forum has been brought forward from its planned date of 21st June and will focus solely on dealing with inflation in the grocery sector. The group will convene again to assess the situation on that date in the summer, with Mr Richmond saying he “wants to see progress on grocery prices by then”.

He said he wants to see a “firm commitment” but also signalled that if there were any steps requested from Government, he would be open to looking at them. “If it requires Government assistance or greater Government involvement, we’re more than happy to look at that too”.

Measures of inflation both in the retail sector and the wider economy suggest that the rate of inflation growth may have peaked. However, the reversal is unlikely to make a meaningful difference to households – despite commitments from major supermarkets to begin cutting the price of staples like milk, which has in turn been met with resistance from farming groups.

Retail analyst Kantar released data last week suggesting grocery price inflation was 16.6 per cent compared with 16.8 per cent in March – the first dip seen in almost two years. The value of grocery sales increased by 10.9 per cent in the four weeks to the middle of April as the cost of going to the shops increased. The firm said that shoppers were going to the supermarket more frequently and spending lower amounts in an effort to keep on top of household budgets.

Mr Richmond said he didn’t want to see anything that would jeopardise the margins farmers would receive after the backlash from the farming sector to milk price cuts last month.