LARGE RETAILERS should be legally compelled to disclose the margins in their Irish operations so that consumers can judge whether they are profiteering, the Oireachtas Committee on Enterprise, Trade and Employment has been told.
Tara Buckley, director general of grocers’ group RGdata, said the Companies Act should be amended to force disclosure of profit margins and introduce greater transparency.
Tesco Ireland and Aldi yesterday refused to provide information about their profits in Ireland. Tesco chief executive Tony Keohane said the company did not separate Irish profits from others in its international division but gave as much information as it could. He said returns in the Republic were lower than in the North.
Aldi chief executive Donald Mackay said the German discounter makes “normal profits” in its Irish business.
But RGdata chairman John Foy, a grocer from Cootehill, Co Cavan, told the committee he wasn’t afraid to open his books to anyone. His net margin was 1.2-2 per cent and he expected to make about €70-100,000 a year for keeping his shop open seven days a week and 16 hours a day, he said.
Earlier, the committee heard claims that Irish retailers have to pay suppliers up to 220 per cent more for staple goods than their UK counterparts.
Cormac Tobin, managing director of Unicare pharmacies and a member of Retail Excellence Ireland, said he could source Colgate toothpaste for 74 per cent less in the UK, while the cost of McVities digestive biscuits was 220 per cent higher for Irish retailers. The margin on Pampers babywipes was 140 per cent and for Simple bodywash it was 180 per cent.
He had tried to persuade Irish suppliers to drop their prices when sterling fell, but most refused.
Mr Foy said he had been buying bottles of 7up, which is made in the Republic, in the North for 45 cent less than in the South.
Another grocer and member of RGdata, Jim Marshall, from Mullingar, said he had started sourcing goods directly from Scotland, England and Northern Ireland because they were cheaper. His Irish supplier charged 52 cent for a Mars bar, but he could source this in Scotland for 39 cent. Cadburys biscuits cost €1.47 from suppliers here, but only €1.18 in the UK, and Mach 3 blades cost €9.88 here and €6.87 in Scotland.
Paul Kelly, of Food and Drink Industry Ireland, said Ireland had the most highly concentrated retail market in Europe, with the top three chains controlling 70 per cent of sales. Because of this, suppliers were increasingly compelled to meet retailers’ demands because of the latter’s buying power.
Mr Kelly called for the appointment of an ombudsman to investigate abuses of power and new laws banning the payment of “hello money” and other practices forced on suppliers.
For Tesco, Mr Keohane said the reason prices were higher here was because supplier costs and business costs were higher, and because of currency changes. “Prices charged by suppliers of international products here in Ireland are higher than anywhere else in Europe,” he said.