Retailers could be forced to reveal precise details of how much money they are making in the Republic in order to assure consumers they are not being gouged on prices under draft legislation to be published by the Labour Party on Tuesday.
The proposed legislation would empower Ireland’s consumer watchdog to closely examine the profits and price-setting policies of the State’s largest retailers – many of whom regard their Irish profit margins as too commercially sensitive to make public – and take enforcement action if and when prices are found to be excessive.
It comes as concern mounts that retailers have been too slow to pass on lower input costs to shoppers with grocery inflation currently running at in excess of 16 per cent, or more than twice the rate of general inflation.
At a retail forum hosted by Minister for State Neale Richmond last week retailers stressed the pressure they were under as a result of higher input costs but did not give any details of how much money they were making in Ireland or when they would be in a position to lower prices.
Ireland meteor shower tonight: Getting the best view of the ‘shooting stars’ during the Geminids
Stephen Collins: Despite the rhetoric from Mary Lou McDonald, Sinn Féin was the big election loser
Radio Review: At Newstalk, Ciara Kelly gets righteously annoyed
I need to book a restaurant for Christmas dinner with friends. Am I too late?
In the wake of that meeting, Minister for Enterprise Simon Coveney said he was looking at options to ensure there was more transparency around pricing in Irish supermarkets. The Competition and Consumer Protection Commission (CCPC) told the Minister that its powers to act were limited under current legislation, however.
The draft legislation has been prepared by Labour’s enterprise spokesman, Ged Nash. “I have been campaigning for some time now on possible price gouging in the food and grocery sector and one thing that has become very clear to me is that we have a serious lack of transparency when it comes to examining the profits and price-setting practices of giant retailers,” he said.
He said the proposed Consumer and Consumer Protection (Excessive Pricing) 2023 Bill would amend the 2014 Consumer Protection Act and “address this fundamental problem within while arming a currently powerless regulator with real enforcement powers to bring these giant retailers to heel and ensure fair pricing at the checkout”.
Under the new legislation the CCPC would be empowered to carry out a deep study and analysis of the costs supermarkets incur, the profits taken and the prices they set.
“The CCPC would be allowed to collect any data they need to complete that analysis and publish the results, bringing a transparency to this market that has been sorely missing for too long,” Mr Nash said.
“While the CCPC will be required to take into account commercial sensitivities in publishing these studies, its prime consideration should be the welfare of the consumer,” he added.
Under the proposed legislation, failure to co-operate with a CCPC analysis or the provision of false information would carry up to and including prison terms.
What do we know about the finances of Irish supermarkets?
Of the six major groups that dominate the Irish food and grocery sector three publish little or no financial information, while the others publish annual accounts that show turnover, profits and other financial details.
Dunnes Stores does not publish accounts that show its turnover or profits in the Republic. A company based in Northern Ireland that publishes financial information in relation to the Dunnes business there is in the process of converting its corporate status so that it will no longer have to publish accounts.
Lidl in Ireland is run by an Irish resident German company, Lidl Ireland GMBH, that does not publish accounts. Tesco is a UK company with its shares quoted on the London Stock Exchange. It does not break out turnover and profitability for its business in the Republic in its annual accounts.
The Cork-based Musgrave Group, which owns the Centra, Daybreak, Day Today, Mace and SuperValu brands, reported an after-tax profit of €92.7 million in 2021, on a turnover of €4.5 billion. The latest accounts for Aldi show it had a turnover in Ireland of €2 billion in 2021 and an after-tax profit of €31 million.
BWG Foods, the food and grocery distribution business that operates the Spar, EuroSpar, Mace, Londis and XL brands, in partnership with independent retailers, had a turnover of €1.4 billion in the year to the end of September 2021, according to its latest published accounts. It reported an after-tax profit of €4.3 million.
