Groceries Order the acid test for consumer board

Business Opinion: Farewell, then, to the Consumer Association of Ireland. The Tánaiste finally did the decent thing and put down this lame duck down last week when she announced the creation of a board to advise her on consumer issues and promote consumer rights.

The details of what the Tánaiste has in mind have not been divulged, but whatever she comes up with it can only be an improvement. With something like 8,000 members, the CAI really has no mandate to speak for Irish consumers and its main function seems to be providing the media with talking heads when consumer issues surface in the media.

There is something of the chicken and egg about the relationship between a strong consumer culture and and a proactive consumer lobby. But the CAI has existed since 1975 and thus can be said to have had its chance. May it rest in peace.

The Tánaiste has been quick to link her new board with that most successful of quangos, the Motor Insurance Advisory Board. There are a few points worth making about the MIAB in this regard. The first is that the MIAB has existed since the mid 1980s, but was essentially a fig leaf for Government inaction. It is only since the appointment of Dorothea Dowling as chairwoman in 1998 that the board decided to take on the insurance industry. The make up of the consumer board will be critical to its effectiveness.

The other - and more important point - is that all the reports and recommendations in the world are no use if there is no political will to implement them. MIAB worked because the Government agreed to implement all of its 67 recommendations, many of which had been knocking around for years, within in a specific timeframe.

A year-and-a-half later, something like half of the recommendation have been implemented. Some others - such as the introduction of the Personal Injuries Assessment Board - are being pushed through in the face of opposition from vested interests. But others will never see the light of day because Ministers are not interested.

If the Tánaiste's new consumer body is to be effective, she must act on its recommendations. And despite her determination in respect of the MIAB report, there is reason to doubt her commitment to a wider consumer agenda.

The Tánaiste is currently undertaking her third review of the Groceries Order since she came into office. Made in 1987, this ministerial Order effectively blocks below-cost selling by supermarkets. This, in turn, makes price competition between supermarket chains difficult.

The Order is vehemently opposed by the Competition Authority, whose chairman, Dr John Fingleton, sees it as a barrier to competition in the retail sector. But it remains policy and only last week, the Director of Consumer Affairs, Ms Carmel Foley, prosecuted Tesco and Dunnes stores for selling baby food below cost price. The main supporters of the Order are small retailers and wholesalers; namely the vested interests that stand to lose out if supermarkets drive down prices. (Incidentally the CAI is also in favour of it, which really says all that has to be said about the CAI.)

Despite the recommendation of the Competition and Mergers Review group that it be abolished, the Tánaiste has twice left the Order in place. Both times in response to intensive lobbying by RGDATA, the independent retailers organisation and other vested interests.

If she caves in for a third time at the behest of these vested interests she risks neutering her proposed consumer body before it even gets going. If she abolishes it, then a clear signal will be sent that she is prepared to make hard choices as she did with the MIAB over the Personal Injuries Assessment Board. But the political price will be significant and unwelcome with the European and local elections around the corner.

A third - and quite likely - option is to dodge the issue entirely, make no decision, but hand the Groceries Order to the new body for review. This would ensure that the new consumer organisation starts out life with a nice thick shiny coat of fudge.