Competition Authority chairman John Fingleton has made a compelling case for reform of the Groceries Order, so as to bring down the cost of certain food items. Repeal of the legislation, he suggested, would save the average household almost €500 a year. And he described the order as "one of the most anti-competitive and protectionist devices on the Irish statute books".
We have been here before. On previous occasions, the Government caved in to pressure from powerful business interests and ignored the concerns of consumers. This time, it may be different. A degree of preparatory work was done by Tánaiste and former minister for enterprise, trade and employment, Mary Harney, in encouraging consumer involvement. The Competition Authority was brought into being. And, more recently, a National Consumer Agency was established. Both organisations have argued cogently for removal of the Groceries Order to bring down the price of packaged foods.
There is a deal of confusion on the subject. Its supporters, from small grocers to food manufacturers, maintain that it protects small and independent retailers from predatory pricing and thus ensures competition. The Irish Farmers' Association goes further and wishes to extend its terms to include fresh produce while banning all off-invoice discounts and supply agreements. Its opponents say the order keeps prices artificially high by preventing retailers from passing on to consumers the discounts they habitually receive from suppliers.
Packaged food items covered by the order are invariably more expensive here than in neighbouring states. Retail price levels over the past five years showed food prices here rising by almost 10 per cent; clothing and footwear falling by 16 per cent and durable household goods by 4 per cent. And at a time when oil prices are putting pressure on inflation, anti-competitive practices within the economy must be addressed.
A reform agenda was promised by the incoming Government in relation to pharmacies and drugs prescription costs, limits on pub licences, food prices, the legal system and the transport market. But progress has been painfully slow. And trade unions and publicans successfully resisted the deregulation of public transport along with plans for a cafe-bar licensing system.
The Government's reluctance to confront the interest groups involved in the Groceries Order led Minister for Enterprise, Trade and Employment, Micheál Martin, to order a two-month consultation period. Since then, an Oireachtas committee has proposed a compromise that would involve retention of the ban on "below cost" selling, while allowing the benefits of discounts and rebates to be passed on to the consumer. It would be an advance on the present position although cumbersome and difficult to police.
The Government's response to this issue will test its commitment to putting consumers at the heart of policy-making.