Inflation higher than expected, says Ahern

The Taoiseach said the Government was concerned about the latest inflation figures, adding that they were higher than expected and reflected increases in a variety of areas.

Mr Ahern was replying to Mr Pat Rabbitte (Labour, Dublin South West) who said they were "a serious cause for alarm," and urged the Government to ask the NESC to look at the matter.

The Taoiseach said a meeting had been held last week at official level with the ICTU and IBEC and there would be a meeting at political level in the near future.

"We are considering a range of measures in different areas, including housing. While we must allow for competition, on the one hand, we must look at specific areas where it is clear there is excessive profit-taking. This issue will have to be dealt with in the coming months."

Mr Rabbitte said the NESC had made specific recommendations on housing, which the Government had not tackled. He asked if the "entirely disproportionate" contribution of drink prices to the consumer index rise was a matter for serious concern to the Government.

"The Government is pussyfooting with the publicans and vintners and refusing to take action, other than talk vaguely about competition and introducing additional licences at some time in the future. The price increases on drink are a disgrace and of serious concern in terms of maintaining a competitive tourism industry."

Mr Ahern said the increase was 1.2 per cent, due to trade increases in the price of beer and spirits, and he hoped there would be more competition in populated areas and cities. The Government would examine other measures to see what could be done.

"Unfortunately, the result of profiteering is extraordinarily excessive prices. I do not know the real figures, nor can I provide proof, but those in the profession say profit is in excess of 50 per cent on the bottom line, which is excessive."

Price orders would not solve the problem, said Mr Ahern. "I agree that competitive forces are necessary, and we will do all we can in that regard."

The Fine Gael leader, Mr John Bruton, said there was an emergency in terms of inflation, and "our inflationary problems are beginning to be of concern to our colleagues in Europe".

The Government's opposition to the increase in inflation, he added, lacked all credibility, because of the gross understaffing of the Competition Authority, the body responsible for ensuring competition.

Mr Ahern said the Competition Authority had been resourced to monitor, investigate and deal with evidence of anti-competitive behaviour leading to higher than appropriate price levels.