Strong regulations for grocery market

The grocery market is to be strongly regulated to ensure fairness between suppliers and retailers.

The Competition and Consumer Protection Bill, published yesterday, will specify the procedures that must be followed in commercial relationships in the grocery goods sector.

It is aimed at preventing retailers altering supply contracts, demanding ‘hello money’ for shelf space, and forcing suppliers to pay for promotions or for wastage or shrinkage.

Richard Bruton, the jobs and enterprise minister, said regulations were considered more appropriate than a code of practice.

He said the powers of investigation and enforcement by the Competition and Consumer Protection Commission (CCPC) would be substantial.

“There is potentially a real inequality of arms between these players which can be abused in a manner that is not in the interests of jobs, consumers of sustainable safe food,” Mr Bruton said.

The commission, resulting from the merger of National Consumer Agency and the Competition Authority, will monitor compliance with any regulations. The CCPC will also have the power to name and shame those found guilty of contravening the regulations.

However, negotiations on price will remain an issue between the contracting parties, as happens in any commercial relationship.

“What the new regulations are intended to achieve is to regulate certain practices, not set prices,” said Mr Bruton, who is hopeful the legislation would be enacted by the summer.

He intends to have regulations in force as soon as practicable after the bill is passed into law.

Retail Ireland, the Ibec group that represents the retail sector, said Mr Bruton must ensure that all decisions ultimately made under the bill are reasonable and proportionate.

“Given the very narrow margins retailers are operating under, any move that would increase business costs would likely lead to increased prices for consumers,” said Retail Ireland’s director, Stephen Lynam.

IFA president Eddie Downey said the real test of the proposed legislation would be a fairer return to producers, while the ICMSA said the regulation of the retail trade at EU level must be Mr Bruton’s next ambition.

Mr Bruton said a new watchdog with “real teeth” would emerge from reforms in consumer protection, with criminal investigation functions being added to the powers that already exist to combat white collar crime.