On 23 October last, the Oireachtas Joint Committee on Agriculture, Food and the Marine published its Report on the Grocery Goods Sector, which is aimed at increasing equity and transparency in producer-processor-retailer relationships.

The report follows a 2010 report by the Joint Committee on Enterprise, Trade and Employment which identified serious irregularities in the Irish grocery market and called on the Government to act to eliminate these irregularities through the introduction of a statutory code of conduct.

As part of the most recent review, the Committee examined whether Ireland would benefit from the implementation of a statutory code or whether a voluntary code would suffice. 

The Committee heard submissions from relevant stakeholders, including RGDATA, the representative group for independent family grocers in Ireland; Retail Ireland; the Musgrave Group; the Irish Farmers Association; the National Consumer Agency; the Competition Authority; Tesco; Lidl; and Aldi.

The Committee firmly concluded that a code which is enforceable by law should be implemented without delay.  It expressed the view that notwithstanding the administrative and cost burden associated with the implementation of a statutory code, the long-term benefits would far outweigh any initial short-term costs.

It recommended that any such code should work in harmony with EU law and should apply to all suppliers and retailers.  It should also outlaw below-cost selling and predatory pricing practices and seek to redress the imbalance of power in the supermarket-supplier-producer relationship.

It also recommended that the code contain some mechanism for a legal support agency to assist small and medium size enterprises that may not have sufficient resources to comply with any new legal obligations.

The Committee also favoured the appointment of an independent supermarket ombudsman to oversee compliance with the code.

Further recommendations outlined in the Report, include:

• the removal of any obstacle preventing producer groups from negotiating in an organised way, particularly in light of proposed CAP reform;
• the introduction of a minimum pricing order on the sale of alcohol and the prohibition of below-cost selling of staples, such as milk;
• the introduction of stricter rules for labelling, which in the case of own-brand products should include the prominent display of information on the processor code and country of origin. Such rules should apply equally to both the food and drinks sectors.

In order to investigate the assertion that the high cost of doing business in Ireland in comparison to the rest of Europe is responsible for higher food prices here, the Committee called for legislation requiring large multiples and processors to publish details of their profits and turnover.

The Committee is hopeful that the report and its recommendations will feed into the Government’s deliberations on the proposed Consumer and Competition Bill.  According to the Government’s Legislative Programme, the Bill is expected to be published in the current parliamentary session.

View a previous article on the proposed code of conduct here.

Contributed by:  Aisling Butler