Food price hikes - Politicians face ire of consumers

BATTERED by price hikes, consumers in rip-off Ireland can be forgiven for viewing warnings from the food and drink industry of further increases on the way as a cynical softening-up process.

Shoppers have been hit by one price rise after another ever since the abolition of the Groceries Order, a move intended to bring prices down.

Today’s analysis of price trends shows that grocery prices have risen by over 16% despite the removal of the ban on below-cost selling almost a year ago.

Enterprise Minister Mícheál Martin scrapped the price control law last March, saying it was keeping food prices in the shops artificially high.

The move was calculated to assuage consumer anger over the scenario exposed by economic analyst, Eddie Hobbs, in his hugely popular TV series, Rip-off Republic.

The bitter irony is that on top of a raft of price rises since then, further increases are looming on a wide range of products, including bread, breakfast cereals, soft drinks, as well as canned, packaged and frozen foods.

There is no denying prices have risen for a wide range of products in the shopping basket since the ban was axed by the Coalition on the strength of predictions that it would mean savings of €1,000 for the average household.

Since then, price increases have ranged between just over 1% and 16% for three quarters of 50 basic products used to measure inflation.

Falls of between 0.2 % and 2.3% were recorded in only a quarter of the items in the basket.

According to the most up-to-date estimates from the Central Statistics Office (CSO), the price of 37 products rose substantially between March 2006, when the ban was dropped, and last November, the most recent cut-off point for CSO estimates of inflation.

The price of 13 items, including butter, sugar, Irish cheddar, flour, and tea, fell by a few cents during that time.

In contrast, the increases were much larger and ranged across a long list of products, including almost all cuts of meat (beef, lamb, pork and bacon) as well as fresh and smoked fish, milk, eggs, fruit and vegetables.

Ominously, smoke signals of further impending price rises are now being sent up the food and drinks arm of IBEC, the body representing a broad spectrum of industry.

In the process of alerting shoppers of coming hikes in the cost of a wide range of products over the next few weeks and months, the industry has blamed “dramatic increases” in the cost of energy, services, labour and ingredients for driving up food production costs.

The Irish food and drink industry supports 50,000 jobs directly, 60,000 jobs in distribution and the livelihoods of 120,000 farmers.

Though most workers have more money in their pockets today, the benefit of wage increases is steadily being eroded by the rising cost of food, drink, energy, transport, waste disposal, postage, health insurance, mortgages and air travel baggage.

When the Government goes to the country in May, politicians will face a grilling on the doorstep.

As people brace themselves for even higher shopping bills yet to come, consumer champion Mr Hobbs believes the anticipated price falls have failed to materialise because supermarkets and suppliers are resisting passing on savings.

What little improvement consumers have seen, has been more than offset by a blizzard of price increases in an economy where there is still a glaring lack of real competition.