Groceries ban on below-cost sales to be scrapped
Weekend reports suggested the Groceries Order, which aimed to protect small grocers by preventing aggressive price discounting by larger retailers, would be scrapped.
An internal review group within the Department of Enterprise, Trade and Employment is nearing the end of its work and will present the report to enterprise minister Micheál Martin shortly.
Those who favour removing the ban on below-cost selling say it is anti-competitive and is not in the best interests of consumers in the long run. The Government-appointed Consumer Strategy Group has already recommended the abolition of the Order but the final decision will rest with Mr Martin.
Other groups, however, have argued for the ban to be left intact and warn that small retailers would be wiped out if supermarket giants such as Tesco and Dunnes Stores were allowed to use their deeper pockets to subsidise a price war over a lengthy period.
The Consumers Association of Ireland repeated its call for the abolition of the order yesterday, saying its removal would bring prices down and be good for consumers. Chief executive Dermott Jewell said the decision, if implemented, would improve competition and have a particularly beneficial impact on food prices. Scrapping the ban would allow retailers to pass on more discounts to customers, he said.
National Consumer Agency chairperson Ann Fitzgerald has said the Groceries Order is “a bad deal” for Irish consumers and no longer serves the purpose for which it was intended.
“The Groceries Order operates against the interests of consumers. The environment in which the Groceries Order was enacted is now redundant and times have changed dramatically,” she said. “Long-term discounts are a feature of the grocery trade. They can range up to 18%.”
But retailers group RGDATA has rejected these claims and wants the Government to leave the ban in place.
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