A massive behind-the-scenes lobbying battle is under way in the Irish Republic over the future of the ban on below-cost selling, which is due to be decided by government and parliament next month.
Heading one campaign is the powerful Irish Business and Employers’ Confederation, which is fighting to have the so-called groceries order retained.
Members of its food and drinks industry division have been instructed to contact politicians of all parties to stress that jobs and businesses could be at risk if the ban is scrapped.
Members are urged to contact politicians directly and co-ordinate lobbying with RGDATA, the grocers’ organisation.
The groceries order has become hugely controversial as the Republic struggles with spiralling prices and rip-off allegations. The Competition Authority wants it abolished, claiming it keeps the average grocery bill €500 a year higher than it need be. The newly established National Consumer Agency supports that view, but a parliamentary committee that investigated Irish prices disagrees. It backs the order.
Enterprise, trade and employment minister Micheál Martin is studying more than 500 submissions on the ban.
Tesco is urging abolition while the Musgrave Group recommends retention.
The government parties are divided on the issue, with the junior coalition partners the Progressive Democrats favouring unrestricted competition while backbenchers in Fianna Fail are concerned that predatory pricing by multiples could force local retailers out of business.
The betting is on a compromise whereby the order would be revised rather than abolished. The likely formula would allow the multiples to pass on to consumers the off-invoice discounts they receive from suppliers, while the ban on selling goods below the monthly invoice price would be retained.
The European Commission has charged Heineken, InBev, Grolsch and Bavaria with operating a price-fixing cartel within the Dutch beer market. The commission claims that it has evidence that the brewers agreed on prices and allocated customers between 1996 and 1999. If the brewers are found guilty, they could face fines of up to 10% of annual turnover.
Meanwhile, InBev has acquired the remaining 30% interest in Chinese brewer KK.

Tesco Lotus has secured contracts to rent supermarket space in Thailand. It has signed a deal to rent one 1,800 sq m site and another for 1,200 sq m.

Japanese c-store operator 7-Eleven has launched a $1.2bn cash tender offer to buy the 27.3% stake that it does not already own in its US subsidiary 7-Eleven US.

Heineken has reported an 8.2% drop in first-half profit to 1345m. Organic net profit was up 5.4% while turnover rose 5.8% to 15.14bn, mostly as a result of acquisitions.

Lower prices and stores refurbishments helped Ahold post second-quarter profit of 1130m, compared with a net loss of 128m the year before. Net sales fell 0.9% to 110.4bn but excluding currency impact were up 0.5%.

Hurricane Katrina has had a devastating effect on the country’s agricultural and fishing industries, risk management company Aon Corporation has said. The hurricane flattened sugarcane fields and avocado crops, damaged chicken plants and disrupted ports dealing with imports and exports of grains, bananas and coffee.
n cartel charge
n space deals
n going for 100%
n lower forecast
n ahold recovers
n katrina impact