Groceries order – Artificially high prices not justifiable

The anticipated boon for the consumer with the abolition of the Groceries Order has abjectly failed to manifest itself.

Instead of prices in the big supermarkets showing a noticeable decrease, the opposite, so far, has been the experience.

First introduced about 19 years ago to prevent small shops being driven out of business by large supermarket chains, the Government claims the order was anti-competitive, and that abolishing it would lead to lower prices.

It had been argued by small retailers that the big supermarkets would be able to undercut them and drive them out of business with the disappearance of the order.

Neither has been the case, and the only one to suffer is the consumer, who has been faced, perversely, with steeper prices.

It would be hard to disagree with the Green Party, who want an independent investigation into the effects of the removal of the order, that it resulted in the creation of higher profit margins for large retail monopolies.

Minister for Enterprise, Trade and Employment Micheál Martin takes the rather longer-term view that prices would be adjusted downward eventually, but cannot say when that will be.

He said on radio yesterday morning that it was always his view and remained his view that the Groceries Order kept prices artificially high. It was a very protective mechanism and he hoped no one was suggesting that if it were left there, somehow prices would come down.

What the minister could not say was when those artificially high prices would come down, except to re-iterate that it could be as long as 12 months.

To keep prices “artificially” high means that there is no justification for them being so, and it is ludicrous to suggest that they will remain so for a year.

Despite the minister insisting it is far too early to make an adjudication on the order, the consumer who has to pay those inflated prices could not agree with him.

There is a much more effective barometer of prices, and that is an ever depleting pocket, something which in this country seems to be a permanent condition.

Unfortunately, inflation will not wait in an economy where the cost of living is rising all the time.

Depressing news arrived on Thursday with the startling message from the Central Statistics Office that inflation had hit a three-year high of 3.8%, very considerably more than the 2.2% European average.

More depressing than the fact that inflation here is now practically shading the 4% mark, is that analysts are predicting it could reach 5% before the end of this year.

Every which way the consumers turn, they are faced with rising prices, be it mortgage interest repayments, more expensive heating oil and gas, as well as petrol and diesel.

With the Government tolerating artificially high prices, combined with an inflation rate that is going through the roof, it is rather injudicious of Finance Minister Brian Cowen to preach restraint.

A factor in that inflation rate are the level of taxes, both the transparent and stealth ones, that the Government has been responsible for.