Ireland should follow the UK government in bringing retailers together to request voluntary price caps on some brand staples, Labour TD Ged Nash said.
The party’s spokesperson on finance said there was mounting evidence across Europe that food inflation is now “extremely sticky”.
He highlighted British prime minister Rishi Sunak’s plan to encourage caps on the cost of basics such as bread and milk to tackle the cost of living crisis.
Mr Nash told RTÉ Radio 1’s Morning Ireland that supermarkets could be “playing catch up” in terms of lost profits after the Russian invasion of Ukraine but called for better understanding of the facts.
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“What we’ve been calling for since the outset of this problem is for the Competition and Consumer Protection Commission (CCPC) to undertake a detailed market analysis to fill in some of those gaps,” he said.
“We know, for example, that labour costs are modest. We know that input costs generally are coming down, but food inflation is extremely sticky. So the reality is, compared to this time last year, Irish consumers are paying almost one-fifth more in terms of weekly shopping than they were last May.”
The CCPC was still not empowered to go into supermarkets to look at what prices they were charging, he said.
“We know that the supermarket sector generally across this country is one of the most secretive economic sectors, and that’s one of the missing gaps that we have in terms of price transparency.
“We know that the staples are coming down. But food inflation is still extremely high,” Mr Nash said.
“We saw some fairly derisory cuts ahead of the retail forum meeting chaired by Minister Richmond last month – bread, milk, eggs and butter – but that had no impact at all or a meaningful impact on grocery inflation.”
Mr Nash pointed to legislation that Labour produced a few weeks ago and said this would “enable the CCPC to undertake a deep market analysis of actually what’s going on in the sector”.
He said competition law also needs to be used “because the consumer law actually in this country is especially weak”.
“And if it was found that retailers are actually abusing a dominant market position, then they would fall foul of competition law. And that’s the important thing.”
Mr Nash said that the Government could not “simply take the word” of Retail Ireland, which said that consumers will benefit from falls in commodity prices.
“Retailers who aren’t involved in profit taking or price gouging will have nothing to fear from shining a light into those dark corners, because I think light in this regard is the very best disinfectant.”
The Government could follow the example of the Tories, “the party of billionaires”, Mr Nash said.
Mr Sunak understands the severe impact of grocery inflation on the UK population, he said.
“I would rarely advocate that anybody would follow the lead of the Tory party in the UK, but it just shows you the mess I think that this Government has made of the grocery inflation situation.” Mr Nash said.
