New Competition and Consumer Protection Bill won’t end sharp practices

The publication yesterday by Minister for Enterprise Richard Bruton of the new Competition and Consumer Protection Bill is not the end of the road for sharp practices in the grocery trade supply chain, as some were hoping.

It is merely the latest milestone in the never-ending debate over whether large retailers effectively bully their suppliers.

The retailer-supplier issue is a hardy annual that has flared up regularly since the 1980s. The debate used to be about “hello money” – payments levied by retailers on suppliers just to get onto their shelves, which have since been outlawed.

The big multiples have found ways to get around this ban, and many of the “marketing charges” and “promotional fees” levied by big retailers to cover the cost of price cuts, are seen by suppliers as hello money by another name.

Bruton reckons the latest Bill contains radical new powers to regulate the sector, but there is no reason to believe this will get any closer to solving the problem than the many false dawns of recent years.

A government-appointed Consumer Strategy Group found, in 2005, that big grocery retailers were making massive profits here, with many observers pointing their finger at their dominance over smaller suppliers as one of the factors.

Fianna Fáil's Mary Coughlan, when she was minister for enterprise, promised a code of conduct in 2009. Then, the government-commissioned Travers Report was published in 2011, recommending a statutory code of conduct. The issue has been effectively stalled ever since.

Bruton’s new Bill actually does not contain any code at all. It includes enabling provisions allowing him to bring in regulations at a later date.

The lack of complaint yesterday from the big retailers, who have lobbied intensively against a far-reaching code the industry would have to sign up to, is telling. They clearly do not fear any of the provisions in the latest legislation.

The retailers’approach for years has been to drag the issue out and hope the sting is taken out of whatever measures are eventually introduced. So far, it has worked for them. And it will continue to work, because the consumers who benefit from the price cuts are on their side.