Continuing rip-off must be revealed

The removal of the Groceries Order — which kept prices artificially high by preventing supermarkets passing on discounts offered by suppliers — was introduced with much expectation in March.

It was supposed to promote competition and bring down the price of food by anywhere from 9% to 20%.

The promised changes have not happened. In fact, following its Fresh Food Survey 2006, Fine Gael asserts — what many people have been saying for some time — that the opposite has occurred.

In July 2005, Fine Gael conducted a survey in Tesco, Superquinn and Dunnes Stores with a basket goods comprising of beef, milk, eggs, vegetables and other fresh produce. The average price of the basket came to 20.90. In July of this year, the average price of the same basket of food came to 22.97, or just about 10% higher than last year.

Thus, instead of the anticipated reduction, prices have actually increased at more than double the rate of inflation, which was running at 4.2%.

Deputy Denis Naughten, the Fine Gael spokesman on food and farming, noted that farmers are being paid less for providing the same produce. In 2005, farmers received 8.78 for the basket of food, but that was down to 8.77 this year. Consequently, their share has actually decreased from 42% to 38%.

Although Fine Gael have been accusing supermarkets of profiteering by ripping off customers and failing to reward the farmers properly, a spokesman for Enterprise Minister Micheál Martin’s department contends that there has not been enough time to evaluate the true impact of the removal of the Groceries Order.

Prices have increased as a result of higher fuel costs, but the department spokesman contends that the savings will be recognised over the long term. It is undoubtedly over-simplistic to suggest that changes over a whole year are representative of the impact of the removal of the Groceries Order, which only covered four months.

In the commercial world, prices are only likely to go down if consumers react to price differentials. They must reward those who bring down their prices by shopping at their stores.

For this to happen, of course, the public must be informed where savings can be made.

The pressures of daily life are such — especially with both partners often working — that many people are only likely to be aware of price differentials, if these are highlighted.

Fine Gael proposes that National Consumer Agency should be empowered to conduct regular price surveys to highlight good value, and name and shame those charging excessive prices.

This would be an effective way of ensuring that competitive forces come into play and it is where leadership is important.

It took the Rip-Off Ireland series by Eddie Hobbs to highlight the problems of the Groceries Order in the first place. By highlighting the problem, he managed to ensure that pressure was put on the Government to act.

Government has the resources to highlight such matters, but it has lacked the will. Fine Gael should be congratulated, therefore, for taking the initiative in providing leadership in highlighting for both consumers and farmers what is happening to food prices.