Aldi: Grocery sector rules would mean price rises

Discount store Aldi has said that the introduction of a statutory code of practice for the grocery sector could lead to higher prices for customers.

Speaking before the Oireachtas committee on agriculture, group buying director with Aldi Ireland, Niall O’Connor, said the retailer would comply with any code but would “not be an enthusiastic supporter” of the proposal.

“Legislation already exists to deal with this issue which is not being availed of by suppliers/producers and we don’t see how a code of practice will address this problem.

“Aldi’s primary concern is that the introduction of a statutory code will mean an extra layer of bureaucracy in dealings between the retailer and supplier, which, in turn, will mean an additional cost of doing business and ultimately higher prices for Irish consumers.”

He said Aldi already had a fair and efficient system in place with its suppliers and should not be punished for the indiscretions of others.

“It would make no sense for Aldi’s business to ‘squeeze’ suppliers, seek additional discounts, or renege on an agreement. Aldi categorically does not demand any money from our suppliers.

“We do not ask suppliers for ‘hello money’ to stock their goods or for financial marketing support to run promotions on their products to give them prominence.”

Mr O’Connor said that since its introduction here in 1999, Aldi has been committed to working with as many Irish suppliers and to sourcing as much of its produce from within the country as possible.

The committee heard that the discounter has tripled its annual spend on Irish products over the past five years, recruited over 60 Irish suppliers in that period, and now partners with more than 125 Irish suppliers, producers, and manufacturers.

Mr O’Connor said more than 50% of Aldi’s grocery range is sourced from Irish suppliers. Products from Irish suppliers are sold in Aldi’s British, US, and Australian businesses.

In the wake of the horsemeat scandal, the retailer has committed to introducing a programme of regular DNA testing to ensure meat content conforms to specification and labelling.

Aldi Ireland managing director Donald Mackay told the committee he felt the grocery sector was competitive in Ireland and that the company was a major part of that.

“I think it is a competitive market. In our opinion, as we have grown, we have made it more competitive. By offering everyday low prices, it has put a lot of pressure on others to reduce their prices so as not to lose customers to us,” he said.

“So yes, we do think it’s competitive and we play a part in that.”

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