'Too early' for drop in food prices - Martin

Minister for Enterprise and Employment Micheál Martin says it is too early for the abolition of the Groceries Order to bring supermarket prices down.

Responding yesterday to a Consumers' Association of Ireland (CAI) survey that showed food prices had risen since the order was abolished last March, Mr Martin said it would always take a year for the measure to have an impact.

He again defended the move as "the right thing to do" to allow competition to flourish but said external factors, such as the price of fuel and transport, had affected grocery prices this year.

However, Labour said the impact of the measure had been negligible. Fine Gael called for a ban on predatory pricing.

The CAI survey found that some household items, like sausages and frozen chips, had increased by 4 per cent since the order was abolished.

While supermarket retailers rubbished the survey, saying it was too limited and was out of date, the CAI said its research showed the shops were not passing on to customers the potential benefits of the abolition of the order.

The survey, published in Consumer Choice magazine, checked the prices in July of 36 everyday products in Tesco, Superquinn, Dunnes Stores, Centra, Spar, Lidl and Aldi.

It found that most prices had increased since the last survey in July 2005, but some had come down, like those of butter and milk.

CAI chief executive Dermot Jewell said: "We need consumer action to force realistic alternatives but, most of all, we need to stop listening to the wailings of retailers and the incessant spin of all and sundry who deny the existence of a non-competitive, profit-driven and over-priced market."

Mr Jewell said Tesco deserved some credit for its announcement last week that prices for 5,000 products had been reduced since May. However, the silence of other retailers was "extraordinarily disappointing".

Tesco said the CAI survey was extraordinarily limited. Information on just five products had been released and even these prices had been superseded by later price reductions.

Dermot Breen of Tesco Ireland said prices for goods covered by the Groceries Order had come down by 1.5 per cent since March. Prices for other goods had risen by less than 0.5 per cent, but this was caused by circumstances beyond the company's control, such as rising beef prices.

Mr Breen described as a myth the claim that prices would fall as a result of the abolition of the order.

A spokesman for Musgrave, which owns SuperValu and Centra, said prices had spiked earlier in the year because of fuel price hikes, but food inflation was running at zero per cent since May.

Dunnes Stores refused to comment on the issue. A spokeswoman said the company would not be disclosing information on its prices since the abolition of the order. She also refused to say whether it had responded to communications from the new National Consumer Agency, which has repeatedly sought to discuss with the company its pricing policy.

Labour said the rip-off culture was so ingrained in Irish society that supermarkets believe they can get away with increasing prices at will.

The party's consumer affairs spokeswoman, Kathleen Lynch, remarked: "Minister Micheál Martin told us that the abolition of the Groceries Order would benefit the consumer, but its impact has been negligible."

Fine Gael called on the Government to ban predatory pricing in the retail trade. The party's food spokesman, Denis Naughten, accused supermarkets of increasing margins while the consumer was being forced to pay above the odds.

Spar Ireland said many of its stores operated in high-rent locations for long hours and had higher operating costs as a result. Independent retailers were struggling to maintain net margins, which had been independently verified at between 2 to 3 per cent.