A pre-Christmas price war is being predicted in the Irish Republic following the government’s decision to axe the controversial groceries order, which has outlawed below-cost selling for the past 18 years.
Announcing the decision this week, Trade and Enterprise Minister Micheál Martin claimed it signalled a new era for Irish shoppers. There was substantial evidence that consumers were paying higher prices because of the order, he said, with food inflation in the Republic over the past decade having risen three times faster than in the UK and by twice the EU average.
The Competition
Authority has estimated that abolishing the order, which prevented multiples passing on supplier discounts of up to 20%, could save shoppers E500 a year on grocery bills through reduced prices.
Consumer champion Eddie Hobbs, who actively campaigned for abolition, claims it could reach double that.
As an assurance to independent retailers, who fear repeal of the order will enable the big chains to squeeze them out of business, the minister announced a beefing up of competition laws to prevent predatory pricing.
As an added safeguard, the Competition Authority and the director of consumer affairs will jointly police the trade.
Minister Martin, who has spent the past six months consulting on the order, argued it had failed to protect small retailers and stabilise the market. Over a 15-year period to 2002, almost 2,500 grocery outlets had closed, he said. The top four retailers now controlled 78% of the Irish market, while in Britain four retailers controlled 74%.
Anne Fitzgerald, chairwoman of the National Consumer Agency, hailed the government decision as “a triumph for consumers”.
Anthony Garvey
The Grocer Price Index
Announcing the decision this week, Trade and Enterprise Minister Micheál Martin claimed it signalled a new era for Irish shoppers. There was substantial evidence that consumers were paying higher prices because of the order, he said, with food inflation in the Republic over the past decade having risen three times faster than in the UK and by twice the EU average.
The Competition
Authority has estimated that abolishing the order, which prevented multiples passing on supplier discounts of up to 20%, could save shoppers E500 a year on grocery bills through reduced prices.
Consumer champion Eddie Hobbs, who actively campaigned for abolition, claims it could reach double that.
As an assurance to independent retailers, who fear repeal of the order will enable the big chains to squeeze them out of business, the minister announced a beefing up of competition laws to prevent predatory pricing.
As an added safeguard, the Competition Authority and the director of consumer affairs will jointly police the trade.
Minister Martin, who has spent the past six months consulting on the order, argued it had failed to protect small retailers and stabilise the market. Over a 15-year period to 2002, almost 2,500 grocery outlets had closed, he said. The top four retailers now controlled 78% of the Irish market, while in Britain four retailers controlled 74%.
Anne Fitzgerald, chairwoman of the National Consumer Agency, hailed the government decision as “a triumph for consumers”.
Anthony Garvey
The Grocer Price Index
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