Watchdog for grocery trade needs clout, Dáil hears

A PROPOSED new competition body overseeing the grocery trade would have the power to search premises and remove documents, Minister for Trade Batt O’Keeffe told the Dáil.

“The Government recognises the importance of ensuring that there is a fair balance in the relationships between the various players in the grocery goods sector, particularly given its importance to the national economy,’’ he said.

The renewed programme for government, said Mr O’Keeffe, contained a specific commitment to implement a code of practice for doing business in the grocery goods sector to develop a fair trading relationship between retailers and their suppliers.

There was also a commitment to review progress of the code and, if necessary, make it mandatory. The Government, he added, would give effect to this commitment by including a specific provision for the code in legislation, published later this year, to merge the National Consumer Agency and the Competition Authority.

Mr O’Keeffe said the introduction of the code was to achieve a balance, taking into account the interests of all stakeholders, including those of the consumer, and the need to ensure there was no impediment to passing on lower prices.

He added that he had appointed John Travers as facilitator to engage with stakeholders in the drawing up of a voluntary code.

Labour spokesman Willie Penrose asked if it was fair that some commercial companies were abusing their strong or dominant position in the grocery sector by exerting undue and unfair pressure on other commercial companies with which they had business relationships or transactions.

“That is clearly an imbalance of power in the supplier-retailer relationship in the grocery trade which leads to unfair practices being employed,’’ he added.

Mr Penrose said outrageous sums were being demanded by some of the big players for the privilege of getting products on to supermarket shelves. This was bad for both farmer and consumers.

Mr Penrose warned the State could end up with no basic primary producers, adding it was time for the Competition Authority to take on the big operators and not chase small shops.

Mr O’Keeffe said that the Competition (Amendment) Act 2006 prohibited retailers from compelling suppliers to make payments.

It was important to stress, he said, that nobody had come forward to state they were compelled by a particular group to pay money or do anything else prohibited under the Act.

Mr Penrose suggested the Competition Authority should carry out investigations by going into a concern and carrying out an investigation, as happened in the UK.

Mr O’Keeffe said the Government was hoping through the voluntary code and interaction between both sides, there would be a fair balance between stakeholders.