Who will end up footing bill for Groceries Bill?
The abolished Groceries Order - latest version in place since 1987 - made it an offence to sell most food items below the invoice cost. New legislation to prevent predatory pricing is promised - but it is likely to be at least year before it comes into effect.
Life after the controversial Groceries Order is predicted to reduce inflation by up to 1% as competition drives down prices. The Government will like that. Low inflation is good for the economy. The Order covered about 80% of the items in the average housewife’s shopping basket. Food is now forecast to cost between €50 and €100 per month less for the average family.
The cost of food will drop by 10% - we have been told. That is good for shoppers and extremely good for low income families who spend a greater percentage of their income on food than the better off. It should logically follow that food consumed outside the home will also be cheaper as hotels, restaurants, and pubs pass on the savings from lower food prices. That will be good for those who have their lunch in an eating house, or enjoy a hotel meal with a few friends in the evening.
But who is going to pay the cost of the 10% reduction in food prices? The multi-national super stores, who have been adding to their huge annual profits the extra discounts received, which they were prevented by the Groceries Order from passing on to the consumer in lower prices, are unlikely to accept a cut in their profit growth. It is not likely that their staff will take a reduction in their pay packets because they can buy food cheaper.
Processors and suppliers of the food products to the retailers are equally unlikely to accept less.
Farmers, who currently make the biggest input for the smallest share of the retail price, cannot be expected to bear the brunt of another cut... surely.
Now, Minister Micheál Martin was jubilant about the benefits which will accrue from the abolition of the Groceries Order, but in all he said there wasn’t a single word about who takes the cut. Just who bears the cut?
