Govt seeks submissions for new grocery sector code of practice

The Government is seeking submissions on a new code of practice for the grocery sector, it was announced this afternoon.

Tánaiste and Trade Minister Mary Coughlan said it was essential in order to prohibit multi-million euro payments to retailers, which are partly blamed for inflating prices.

Yesterday, this practice of giving “hello money” was criticised by Fine Gael.

Minister Coughlan is also proposing an ombudsman for the sector to deal with disputes between suppliers and retailers, as well as consumer complaints.

“What we've had for the last year at least have been a number of concerns; the consumers saying the prices are too high; suppliers saying that they've been under pressure from retailers to reduce their prices, and farmers saying they're not getting paid enough,” the minister said.

“What I want to try and see is that we can balance and have transparency and a little bit more trust amongst that supply chain.”

The full text of the consultation paper is available at the Department of Trade and Enterprise website, along with details on how to send submissions.

The move was welcomed by food suppliers.

“A code of practice and ombudsman are needed to create a sustainable Irish grocery sector, which provides quality goods at competitive rates, while ensuring that producers, suppliers and retailers run viable businesses that contribute to the economy and create jobs," said Shane Dempsey head of consumer foods at Food and Drink Industry Ireland (FDII), the group that represents food suppliers.

"A code is necessary to restrict practices that may undermine the supply chain and ultimately risk putting the consumer at a disadvantage, through less competition, less choice and less convenience."

Retailers however reminded that securing best value from their suppliers was ultimately in the interests of the consumer.

"Retailers look forward to participating in the consultation process on this draft code," Retail Ireland director Torlach Denihan said:

IIn this process the interests of consumers must be taken into account. It is important that no obstacles are put in the way of retailers securing the best value from their suppliers and, in turn, delivering the most competitive price to consumers."