Grocery Order finally abolished

A GOOD day for Irish consumers with the prospect of reduced grocery prices was how the National Consumer Agency described yesterday’s abolition of the Groceries Order.

But the Irish Creamery Milk Suppliers Association warned that the gain for consumers from a populist measure will be short-lived and will result in further pressure on farmers and Irish food processors and manufacturers.

Enterprise Trade and Employment Minister Micheál Martin, who announced the legislation, said the Groceries Order acted against the interests of consumers for the past 18 years. “The single most important reason for getting rid of the order is that it has kept prices of groceries at an artificially high level by allowing suppliers to specify minimum prices below which products could not be sold.”

RGDATA, which represents independent grocers in Ireland, warned consumers, however, to be vigilant and aware of the pricing practices of large multiples following the abolition of the order. Director general Tara Buckley predicted that the large multiples would engage in pricing gimmicks and practices that will reintroduce the concept of loss leaders into Irish retailing.

She also warned that large retailers would recover the cost of any savings on grocery goods from either consumers or suppliers and that consumers’ need to be constantly vigilant to make sure they are not duped.

But the National Consumer Agency chairperson Ann Fitzgerald said the prices of groceries have been kept artificially high because shops were stopped by law from passing on to consumers discounts which they received from their suppliers. Shops are now free to compete on price.

Meanwhile, the umbrella body for the food and drink industry warned that the Government’s amendment to the competition legislation, while well intentioned, won’t work as it will be impossible to police.

Food and Drink Industry Ireland (FDII) director Paul Kelly said action can only be taken after the damage is done. “The key issue is whether the Irish consumer, our food industry and retailers will be operating in a regime which ensures fair trade and prohibits dominance in the marketplace and predatory pricing.”

Mr Kelly said the FDII and the food industry want to work with the Government to achieve a regime that will work in practice as well as theory and which will benefit consumers, industry and retailers.

ICMSA president Jackie Cahill called for workable legislation to replace the Groceries Order and the putting in place of minimum wholesale prices for fresh food products. He said basic food items produced in Ireland will become the focus of aggressive discounting by retailers to the detriment of farmers and producers.