Consumer group made mistakes in below-cost report - committee

An Oireachtas committee claims the Government's Consumer Strategy Group (CSG) made a series of mistakes in a report calling for an end to the ban on below-cost selling of groceries.

Ann Fitzgerald, interim head of the new National Consumer Agency, whose board includes Celia Larkin, the Taoiseach's former partner, chairs the CSG and was involved in putting together the report. It states that the ban on below-cost selling inflates prices and harms consumers.

But in a submission to the Minister for Enterprise, Trade and Employment, Micheál Martin, the Joint Committee on Enterprise and Small Business says the CSG's document contains "a number of misunderstandings and errors".

The CSG found that the Republic was the most expensive euro-zone country for food and non-alcoholic drink. This was based on the Eurostat Price Level Indices (which measure prices in the EU).

However, the committee - which wants the order retained - says it found that these figures were based only on surveys of prices in Dublin, and Central Statistics Office (CSO) figures show that the capital is more expensive than the rest of the State.

The submission also accuses the CSG of ignoring the fact that food inflation in the Republic has been less than 1 per cent since August 2003, while consumer prices dropped by 1.4 per cent last year.

It also says that: the CSG incorrectly states that there is no ban on below-cost selling in Germany, Spain and Italy; that it is wrong in saying that competition law prevents predatory pricing; that it assumes that convenience stores have a higher market share than they actually hold.

The committee's submission says that a CSG comparison of the price of national and international brands in its report is "misleading" because it includes alcohol products, but fails to exclude excise rates.

The document, agreed by the committee's cross-party membership yesterday and due to be published today, singles out a total of nine errors and misunderstandings which it believes the CSG's report contains.

Ms Fitzgerald and a number of her colleagues gave evidence to the committee, which is investigating high consumer prices in the Republic, late last month.

The committee itself has already published a report calling for the ban on below-cost selling to be kept. A number of groups, including the National Competitiveness Council and the Competition Authority, have called for it to be dropped.

The ban applies to packaged groceries, not fresh goods. It is part of a 1987 amendment to the Groceries Order, which was introduced in the wake of the failure of the independent H Williams supermarket chain.

Mr Martin is the latest minister to consider its future and recently invited submissions on the ban. He will consider these documents in August and September before making a decision on the regulation's future in the autumn.