Martin to ask Cabinet to abolish Groceries Order

Minister for Enterprise Micheál Martin is to bring proposals for the abolition of the Groceries Order to the Cabinet next Tuesday…

Minister for Enterprise Micheál Martin is to bring proposals for the abolition of the Groceries Order to the Cabinet next Tuesday.

Over this weekend officials are finalising the proposals, which will also see changes in the competition laws to improve enforcement in relation to predatory pricing.

There will also be moves to explicitly outlaw the system of "hello money". This practice, supermarkets charging suppliers a fee in return for stocking their products, is already illegal. But it is expected that the Competition Authority will be given additional enforcement powers in relation to it.

The proposals are based on a report by civil servants, following a five-month consultation period. The report concludes that the current Groceries Order simply puts a "floor" on food prices.

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The order. which was introduced in 1987, prevents below-cost selling of packaged groceries. It does not cover fresh food products.

The report also dismisses claims that similar legislation in seven other countries, including Spain and France, has not led to higher prices.

It is believed to include figures which show that the goods covered by legislation in these countries have, in fact, been kept artificially high.

The report is also understood to state that the retail sector in Ireland has been transformed in recent years and that many single supermarket retailers are not truly independent any more but are part of retail chains such as Supervalu, Centra or Spar.

The abolition of the Groceries Order was a key recommendation of the Consumer Strategy Group, which reported to Mr Martin last March.

The Competition Authority also produced a report which said the Groceries Order was costing the average family an additional €500 a year in higher food costs.

However, it had been expected that the Government would move for a compromise on the matter, in the wake of a strong lobbying campaign for its retention by the food and drink industry, the independent retailers' group Rgdata, and many trade unions.

But intense media coverage of food costs and the controversy generated by the Rip-off Republic television series on RTÉ during the summer are believed to have been factors in swinging Government sentiment towards the full abolition of the Groceries Order.