Govt not planning intervention on grocery prices – Tánaiste

May 12, 2023

The Government has no plans for any “legislative intervention” to reduce the cost of groceries, Tánaiste Micheál Martin has said.

It comes after the Competition and Consumer Protection Commission (CPCC) warned the Government not to introduce price controls.

The Taoiseach told the Dáil that the CPCC had cautioned strongly against the move in preliminary advice given to Government.

The CCPC told the Government it had not seen any evidence to suggest that an emergency or market failure exists in the retail grocery market or that price controls would benefit consumers.

However, it recognised that recent price rises have had a significant impact on consumers.

The Commission pointed out that plans for controls were abandoned in Spain because of the impact it would have on smaller retailers particularly in rural areas.

It also stated that there is a lack of evidence to show controls introduced in France and Greece have helped consumers, the Taoiseach said.

Leo Varadkar added that the CPCC believes capping some prices could have the unintended consequence of leading to price rises on other produces and shortages.

Meanwhile, speaking at a meeting of the Fine Gael parliamentary party tonight, the Taoiseach told Fine Gael TDs and Senators that the Government has sent a clear message to the retail sector.

He said prices at supermarket tills must come down as the input costs decrease.

Tánaiste Micheál Martin said “there are no legislative plans that Government have in terms of a legislative intervention at this stage in respect of pricing”.

“The overall situation and more generally is getting better in terms of the rate of inflation reducing and that should feed into grocery and food prices eventually,” he added.

The Tánaiste also said “there has historically been over the last decade significant competition within the retail trade and ultimately competition is what most effectively drives down prices”.

It came as Tesco announced it is to cut the price of its own brand bread by 10c from tomorrow morning.

An 800g white sliced pan will drop from 99c to 89c and corresponding reductions will apply to other Tesco own brand sliced pans.

Separately, the Sinn Féin Leader told the Dáil that food costs are crippling families and there is no sign of these prices coming down.

Mary Lou McDonald accused the Government of showing no urgency to make retailers cut costs immediately.

She called for a plan with real teeth that would include placing an obligation on shops to pass on savings to consumers.

Earlier, Minister for Enterprise, Trade and Employment Simon Coveney said the coalition is “not happy” about the increasing cost of food and he expects to see reductions in prices as inflation falls.

“That’s why the Government asked the retail forum to meet today,” Mr Coveney said. “They will meet again in six weeks, and I do expect to see progress.”

Minister of State Neale Richmond described today’s meeting of the Retail Forum as a frank discussion.

The forum lasted 90 minutes.

Minister Richmond said: “What I did get from retailers is that where input costs have gone down, they will pass this on to the consumer.”

He also expressed his optimism that progress will be made before the next meeting of the forum.

“I have asked them to show demonstrable evidence they have made every effort to reduce the cost at the till for the consumer,” he said.

“That’s what we are expecting on 21 June,” he added.

However, Duncan Graham of Retail Excellence said the environment is very difficult at the moment and retailers faced significant input costs over the last year or so.

Mr Graham said: “Most retailers didn’t pass on the price increases they were getting from suppliers in the early stages of all this.”

“So, there is a lag here, but retailers are committed to do what we can do to ensure there is an improvement for consumers,” he said.

“It’s not going to be easy and it’s not going to happen overnight,” he added.

Arnold Dillon of Retail Ireland said the industry assured the Minister it is doing all it can to ensure the impact on the consumer is minimised.

“Over the course of the last two years the EU inflation rate was 27%, however, in Ireland it’s 17% so Irish retailers are outperforming their counterpart in Europe in trying to insulate consumers here,” Mr Dillon said.

“We told the Minister that retailers are committed to ensuring that where commodity prices fall through the supply chain that the consumer will benefit from that,” he said.

This afternoon’s meeting comes at a time when grocery price inflation far exceeds the general inflation rate. That is down to around 6% and expected to drop further.

But food inflation is close to 13%, according to the Central Statistics Office, and over 16.6%, consultants Kantar say.

The meeting of the Retail Forum, chaired by Mr Richmond, was brought forward from 21 June with a single agenda item to be discussed.

Read more:

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The forum, in existence since 2014, provides the opportunity for the grocery industry to directly meet the Government to discuss issues of importance affecting the sector and to find possible solutions.

Over recent years the Retail Forum, which is made of supermarket representatives, trade organisations and Government officials, have discussed challenges to the industry brought about by high costs, Brexit and the Covid-19 pandemic.

Article Source: Govt not planning intervention on grocery prices – Tánaiste – Mícheál Lehane – RTE

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