Grocery shoppers beware. Tanaiste Mary Coughlan TD, it seems, has embarked on a solo run at the behest of food suppliers and farmers that will reverse the gains made by consumers in the Irish grocery market. This means higher prices for you. Despite a custom-built section for the grocery sector in the Competition Act 2006 that deals head-on with abuse of dominance, hello money, price fixing and coercion, Mary Coughlan wants to reward her agri-pals with a special code of conduct that is heavily skewed in favour of suppliers and comes with its very own police force.
In a brazen move, the former Minister for Agriculture, whose own border constituency twice rejected the Lisbon Treaty, launched her plans without any consultation with The Competition Authority despite its clear expertise in the area. Neither is it believed she consulted the NCA. Both agencies report to her and are responsible for consumer welfare. Tellingly the surprise news of the Tanaiste's plans was broken by The Minister for Agriculture.
The Irish Competition Authority is thought to be deeply unhappy. Anecdotal media reports that powerfully positioned retailers are breaking Irish law has not been supported by evidence to the Competition Authority which has, diplomatically, suggested her proposals are anti-competitive and recommended instead that punitive damages should be used as a deterrent and awarded to any Irish food supplier who takes a successful civil action against retailers under Competition Law.
Lobbyists claim that suppliers won't come forward because of fears of being delisted by retailers. Perhaps so, but a much bigger fear is these unsubstantiated claims of breaches of competition law is being used as a smoke screen for good old fashioned protectionism to artificially cocoon suppliers from the competitive threat posed by Sterling's devaluation. The only sustainable response is more efficiency, more competition, less protectionism and robust Government action on the sources of Ireland's high business costs – rates, waste, utilities, energy and now a credit drought. But The Competition Authority isn't the only agency to believe the Minister's move is protectionist. The ESRI, which is not hampered by relying on the Minister's largesse for its annual budget, has been scathing in its criticism, stating bluntly that Coughlan will increase prices and damage the economy. After all if Irish suppliers increase costs, retailers will simply respond by increasing food imports to meet consumer demand for low prices.
Despite the galling consumer rhetoric contained in the Tanaiste's code, it contains no consumer welfare test or competition test and in further evidence of the food lobby's reach, the main opposition party, Fine Gael, has a broadly similar bill in its pre-election armoury. Consumers, finally benefitting from the removal of the Groceries Order, increased competition, falling prices and competition from Northern Ireland are to be punished for exercising freedom of choice. Irish food prices are to go up not down in the shops if Mary gets her way.
This won't do at all. Both the Competition Authority and the NCA must be as freely outspoken as the ESRI and not hid behind coded language in alternative proposals because they fear open confrontation with their paymaster. Minister Coughlan must be told bluntly that nobody is fooled - her proposals for the grocery market is protectionist, self-defeating and short-sighted.
The sooner this ill conceived gambit is defeated, the better, ideally, by removing Minister Mary Coughlan from Enterprise, Trade and Employment and replacing her with a minister prepared to first consult with its competition and consumer agencies before bending to lobbyists. In the meantime, listen out for food lobbyists and their political lackeys as they argue that their snazzy new code of conduct is really for your benefit. Don't believe a word of it.
Mary's Mad Manifesto
Shops to be banned from;
- Varying terms without supplier agreement
- Seeking contribution to marketing costs
- Getting paid for shrinkage, wastage or better positioning
- Must pay compensation for forecasting errors

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