The Oireachtas Enterprise Committee today published a report which found that UK authorities have asked a competition watchdog to probe allegations that grocery multiples are abusing their market dominance.
Fine Gael Senator Paul Coghlan said the all-party body is concerned that similar abuses may be taking place in Ireland and called on the state's Competition Authority to investigate.
"I have just completed a report on the UK grocery trade which has identified anti-competitive behaviour by the major grocery multiples," he said.
"This report records that there is clear evidence of price fixing by large retailers in the UK, as well as price flexing, in which small retailers are forced to pay more for the same products. The dominance of major multiples in the UK market has resulted in the closure of 2,760 small shops in the last four years.
"The Competition Authority in Ireland must now launch its own investigation into competition in the retail grocery sector, particularly since some UK retailers are major operators in the Irish market.
"In particular, the Authority should use some of its extensive powers to obtain information on turnover and profitability which have been used effectively by its equivalent in the UK, but which have not been used in Ireland."
The report recommended that the Competition Authority should examine the extent to which large multiple retailers have bought up large landbanks in particular locations in order to prevent competitors entering the market.
- When a retailer leaves a particular site, it should not be allowed to enforce a restrictive covenant which prevents another food store from opening at the old location.
- Planning laws should be reformed to ensure that competition in the groceries trade is addressed when considering planning applications.
- The CSO should carry out a census of local retailers to give an overview of the market. The Revenue should review the extent to which multiples are manipulating transaction costs to reduce any VAT liability.
- There should be greater transparency in the grocery sector, which should involve the ability to force multiples to disclose information on turnover and profitability.
- The Government should legislate in this area in order to compel disclosure if necessary.
PA