Tackling cost of doing business ‘would cut food prices’

TACKLE the high cost of doing business in Ireland and food prices will fall, a group representing 4,500 independent grocers told an Oireachtas Committee yesterday.

“If you bring down the cost of running a grocery business then the cost of food will fall,” RGDATA Director General Tara Buckley told the Oireachtas Joint Committee on Enterprise and Small Business.

The Oireachtas committee is currently investigating why Irish grocery prices are amongst the highest in Europe.

Ms Buckley said there was no great mystery as to why food prices were dearer in Ireland than in other European countries.

“The plain and simple reality is doing business in Ireland costs more than elsewhere throughout the Eurozone,” she said.

More than 50% of food imports into the State came from Britain and the cost of sterling exchange was another significant factor impacting on the cost of food. Ms Buckley said this situation was slowly changing as peoples’ tastes became more diverse.

She stressed, however, that higher food prices were not the result of profiteering by the independent retail sector.

“There are no windfall gains being made by independent retailers. The net margin earned by our members averages at 2.65%. This is a very hard earned profit in a very competitive environment,” she said.

RGDATA also wants the committee to recommend that large multiples and discounters involved in retailing be compelled to lodge the same type of returns to the Companies’ Office as their members are obliged to return.

“It is wrong that large companies that have a significant influence on people’s spending power are permitted to be so secretive about their operations in this market place,” said Ms Buckley.

Independent grocers were able to compete with the multiples because the Groceries Order bans predatory tactics that would wipe them out, she pointed out.

Ray Ryan, the president of the association, who has a grocery shop in Limerick, said he would have to sell his business and leave the retail trade if the Groceries Order was abolished.

The committee was also told what while the independent trade holds a 45% share of the national grocery market, in Dublin the multiples have in excess of 75% of the retail grocery market, a situation that partly explains why food prices were even dearer in the capital.

BWG Foods Limited (BWGFL), which supplies more than 550 SPAR and Mace stores and directly employs over 680 people in the State, told the committee that in excess of 50% of their operating costs relate to payroll.

Chief executive Leo Crawford said wage rate increases were significantly in excess of both inflation and the partnership agreement rate increases.

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