Small shops fear predatory prices by multiples

Retailers' reaction: Small retailers reacted with a mixture of disappointment and fear to yesterday's announcement of the abolition of the Groceries' Order.

That the abolition had been well-flagged in advance failed to soften the blow for some shop-keepers who believe their livelihoods may now come under threat.

"We will be targeted," said Co Cavan retailer Eamon Gavin. "There will be predatory pricing, and no government agency will act quick enough to stop the damage being done.

"We are somewhat worried because we have invested a lot of money in our supermarket."

Like many independent retailers, he is concerned about the future of not only his own business but his local community.

His Centra store in Ballinagh employs 41 people. In the same village of 1,200 people, there are competing Spar and Mace outlets.

Mr Gavin said he had visited towns in the UK with populations three times the size, and "there you'd find just one miserable newsagent and a pub. We could be heading the same way".

He added that he was already competing with Dunnes Stores, Tesco and Lidl - all of which had outlets within four miles of his shop.

Speaking for many small retailers, he accused the consumers' "champion" Eddie Hobbs of "getting his facts wrong" on the Groceries' Order, adding that the planned strengthening of the Competition Act was "only spin".

Co Cork retailer Gerry Murphy also struck a foreboding tone, describing a visit last month to France.

"We were cycling through all these villages and there was not a shop in sight where you could stop to buy a bottle of water.

"Having seen what has happened in France, I am worried about what will happen here.

"The 'Hobbesian' economic approach, where we know the price of everything and the value of nothing, is a very poor approach to life.

"The small village shop plays a crucial social rule which isn't being recognised."

Mr Murphy, who owns Costcutter Express in Ballyhea and QuikPick in Churchtown, said: "we won't know for 10 years" whether the Government got it right on the issue.

However, "if they are not right it will be very bad for rural Ireland".

He cited the multiples' efforts to "take over the petrol business" as a worrying recent development.

"They are selling below cost but they will only do that until they put the neighbouring guy out of business. If anyone thinks Tesco are going to sell below cost indefinitely they need their head examined."

Peter Ward, who operates an independent deli in Nenagh, Co Tipperary, stressed that consumers were likely to suffer in the long term from the Government decision through a diminution of choice.

"I'm very disappointed with the abolition of the order. What the Minister is doing is fattening the gladiators," he said.

"What we need is a lot of democracy in food and I think we are heading towards dictatorship. The power of the multinationals in the food economy is far too great and getting stronger."

He said 90 per cent of groceries, purchased in Ireland, were sourced from seven companies.

Local producers were getting pushed out of the market, he added, noting that €80 million was spent annually on apples in Ireland but only €3 million was from the domestic crop.

Mr Ward said he had no problem competing with the multiples on price and quality but "we are not operating on a level playing field".

He added: "I would have been delighted if the Minister had set up a forum to examine fully the practices of multinationals in this country - their whole purchasing and selling strategies - and if he had got commitments from them on what their plans are.

"The question that needs to be asked is: 'Are they providing variety and choice, or just their own version of variety of choice'?"