Removal of Groceries Order ‘a failure’

THE Government is facing calls for an investigation into the effect of the removal of the Groceries Order, as food prices continue to rise.

Abolishing the ban on below-cost selling in March, Enterprise Minister Micheál Martin insisted the order was keeping grocery prices artificially high.

However, two months on, the latest inflation figures show significant increases for the fourth month in a row, leading many to question the rationale of removing the order.

Although many economists believe it’s too early to judge the merits of the decision, the Green Party yesterday joined Labour’s Kathleen Lynch in branding the measure a failure.

Finance spokesman Dan Boyle said: “It only had the effect that those of us who opposed its removal said it would — that of creating higher profit margins for large retail multiples.

“An independent investigation needs to be held on the effects of the Groceries Order removal and to find out who has benefited.

“For it to be a truly independent investigation, it must not be conducted by the Competition Authority who, after having acted as a cheerleader for the removal of the order, could not be seen to be properly impartial in examining its failure.”

Earlier this week, Ms Lynch said: “In a period of two years, annual inflation has gone from just over 1% in March 2004 to almost 4% today. Consumers have not benefited one single bit from the abolition of the Groceries Order.”

However, speaking on RTÉ radio yesterday, Mr Martin rejected that view.

“She is not right. It is overly simplistic to attempt to explain the rise in food prices just on the Groceries Order alone,” he said.

“There are a number of variables that apply to rises in any particular sector, not least in the food industry and it’s ridiculously simplistic to narrow it down to the maintenance or the abolition of the groceries order.”

He said it would be at least a year until the decision’s impact became clear.

“We were always looking at a 12-month scenario because you are looking at structural changes arising in the industry from it.”