Food prices - Consumer power can reduce costs

In the course of his phenomenally successful television series, Rip Off Republic, Eddie Hobbs advocated that people should send nappies to the Department of Enterprise as a means of encouraging the minister to repeal the Groceries Order.

It was confidently predicted last year that if the order prohibiting below-cost selling were removed, grocery prices would fall by from 9% to 20% as a result.

The Hobbs campaign prompted a relatively quick response. Enterprise Minister Micheál Martin introduced legislation last November to remove the Groceries Order, and this came into effect on March 20 of this year.

However, a survey published earlier this month by Shoppingbill.com, found that the price of a basket of goods in Tesco, Dunnes, and Superquinn actually increased since the removal of the order. Popular items such as butter, eggs and tea have increased in price.

People may argue over the reason for this inflation, but it absurd to suggest that it had anything to do with the repeal of the Groceries Order banning below cost selling.

Fine Gael Enterprise spokesman Phil Hogan was merely trying to initiate a political bun fight when he sought to justify his opposition to the repeal of the Groceries Order by complaining that prices have increased because it was removed.

The order to prevent below-cost selling was based on the premise that some supermarkets would lower their prices in order to drive competition out of business, so that they could then raise their prices.

That certainly could happen, but prices have not come down since the order was repealed, so it is obvious that the reason for the inflation in certain grocery prices must be sought elsewhere.

Alan Clayton of Shoppingbill.com has suggested that some prices have actually gone down, but the more popular items have gone up in price because of the demand for such goods.

The only way that prices are likely to drop to the full extent that predicted before the removal of the Groceries Order is if the main supermarkets intensify competition by undercutting each other in a kind of price war in which they ultimately engage in below-cost selling. As long as consumers are willing to pay existing prices, those prices are not likely to fall. It is up to consumers to demonstrate their clout, not by looking for government action, but by speaking up for themselves and ultimately by engaging in selective buying.

Eddie Hobbs has launched another campaign — again calling on consumers to act on their own behalf. Instead of dispatching soiled nappies to a government department, he has suggested that shoppers bombard the supermarket giants with emails with the simple question: “Where are the discounts?”

He is urging shoppers to demand that supermarkets drop their prices on the likes of wines by much as 20%. He demonstrated clearly that the mark-up on some wines was outrageous in his Rip Off Republic series.

Ultimately the surest way of prompting a response from the supermarkets will be for consumers to demonstrate that they are price conscious.

They must not only email their concern to supermarkets, but also demonstrate their willingness to shop around.