Consumer lobby group ‘fails to push for cheaper groceries’

THE Competition Authority has accused a consumer lobby group of failing to push for lower grocery prices.

The authority criticised the Consumers’ Association of Ireland (CAI) over its support for legislation that bans the below-cost selling of dozens of products.

The Groceries Order prevents the below-cost sale of about 50 grocery items. Competition Authority chairman John Fingleton described the CAI’s support of the order as “absurd” and “voodoo economics”.

Mr Fingleton said consumers were “unfortunate” to have a lobby group that doesn’t support the public demand for cheap groceries.

“After four years of discussion on this issue they still have a topsy-turvey view on the Groceries Order,” Mr Fingleton said.

“They have not put in any analytical thought into the issue. It’s laughable to say they represent consumers.

“The association must defend consumers,” he said.

But CAI chairman Michael Kilcoyne insisted there was no evidence that the removal of the order would cut prices. “The Groceries Order covers only 50 of the 5,000 items in supermarkets,” he said.

“The multiples would use below-cost selling to swallow up the independent operators and this would reduce competition and lead to higher prices,” Mr Kilcoyne said

“There is little point in paying less this month to pay more the following month,” he said.

The Competition Authority also believes that independent retailers can co-exist with large German discount stores and hypermarkets.

“There’s plenty of room for new additions,” Mr Fingleton said.

“I don’t know of any towns where consumers don’t need cars to drive to their local grocery store,” he said.

The Groceries Order has come under scrutiny following reports that Ireland will be the most expensive country in the EU before the end of the year.

Retailers claim that the industry has a 2.7% inflation rate, which is below the national average of 4.8%.

Inflation rates in the health and education sectors are 8.4% and 10.4%, respectively.