Goodbye to `hello' deals was said in 1987 law

Paying "hello money" was regarded as the unacceptable face of Irish retailing in the 1980s.

Paying "hello money" was regarded as the unacceptable face of Irish retailing in the 1980s.

Throughout the decade various suppliers and business figures made representations to government on the issue and in 1987 this bore fruit when the then minister for industry and commerce, Mr Albert Reynolds, initiated the Groceries Order Act, outlawing it.

The Act is being reviewed by a Mergers and Monopolies Review Group established by the Tanaiste, Ms Harney.

"Hello money" was where a retailer only agreed to stock a supplier's goods if a payment was made to him or her. Generally it applied to suppliers making their first attempt to get shelf space with a retailer.

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After the Act came into force the practice seemed to end and most people in the industry were surprised when the general issue resurfaced yesterday.

Companies with long-established and well-recognised brands were less likely to be asked to pay "hello money". This is one of the reasons why paying it was regarded as being particularly unfair - it tended to impact on the smallest supplier rather than on multinational operators.

The Director of Consumer Affairs, Ms Carmel Foley, drew attention yesterday to another reason why "hello money" was so unpopular. She said it reduced choice for consumers in that suppliers who refused to make payments would not have their goods stocked and this would deprive the public of "true choice".

Equally, she questioned whether consumers would end up paying higher prices for goods to compensate suppliers forced to make payments.

The amount of "hello money" required by retailers differed greatly, according to sources, but was usually worked out on the basis of a suppliers' annual turnover.

The payment, according to suppliers, was not always made in the form of money. Some suppliers gave free goods to the retailer for a few months, while others offset the payment against the invoice they sent to the retailer.

In this case the allegation, made by suppliers on RTE News, is that payments were required to get shelf space in new Superquinn stores. Every time a new store would open, suppliers which expected their goods to be stocked would make a contribution.

Senator Quinn maintained yesterday this was not "hello money", but "support money". In effect, suppliers would agree to "support" the establishment of a new supermarket which would have a lucrative spin-off for them.

Senator Quinn declined to comment on whether suppliers which made no contribution would still have their goods stocked. However, he said he could "not force them to pay".

Tesco Ireland, the largest retailer in the Republic, said it had never asked for either "support money" or "hello money" and said relationships with its suppliers "are within the law".

SuperValu-Centra said it "does not seek or accept money from suppliers in support of new store openings".

Dunnes Stores declined to comment on whether it had ever looked for "hello money" or asked retailers to make a contribution towards new store openings.

Some Superquinn suppliers who contacted The Irish Times defended the company. "Superquinn is a small family-owned company and needs support from its Irish suppliers," said one Dublin-based firm.