Statutory guidelines will create fairer playing field for grocery sector – DEERING

2nd December, 2016

Statutory guidelines will create fairer playing field for grocery sector – DEERING

Carlow Fine Gael, Pat Deering, has said that the introduction of statutory regulations will create a fairer playing field in the grocery sector. Deputy Deering was speaking this week after the Minister of for Jobs, Enterprise & Innovation Mary Mitchell O’Connor, was speaking at an IFA conference on Unfair Trading Practises where the issue of statutory regulations to ensure fair contracts and fair trading conditions from suppliers and retailers for producers and processors was the main topic.

Deputy Deering said “previously from March to July 2013 The Joint Committeeon Agriculture, Food & the Marine, held a total of seven days of hearings to engage with the relevant stakeholders in the grocery goods sector in Ireland so as to review the retailer/supplier relationship in the food supply chain.

The Grocery sector in Ireland is dominated by the three major players, Supervalu, Dunne’s Stores, & Tesco. These three and others such as ALDI, LIDL, RGDATA and various Food & Farming/Dairying organisations were invited to make presentations to the committee, all except Dunne’s Stores took up the invitation.

“The Code of Conduct for the grocery sector is essential – it must be statutory rather than voluntary. We must remove the doubts an/or allegations regarding upfront money, hello money or delisting money, these practices are vehemently denied by the multiples but for as long as there is no statutory code there will always be questions. There appears to be an unfair and unbalanced relationship between suppliers and the large multiples, this theory is supported by RGDATA and the IFA. Those against the code been statutory or obligatory will argue that it may lead to increased prices, as Irish grocery prices are higher than the EU average.

The committee made a number of recommendations in relation to the Code of Conduct:

1) That a Statutory Code be implemented without delay.

2) The creation of a post of Supermarket Ombudsman, to represent the consumer, primary producer/supplier and to oversee the implementation of the Code.

3) That suppliers and retailers maintain a statement in writing detailing the terms and conditions of their purchase or sales agreements

4) There should be a mechanism for legal support for small and medium size enterprises that do not have their own resources for contractual documents.

“The Committee also made a number of recommendations in relation to pricing transparency and the publication of financial and profits information of large retailers. We recommended severe sanctions for anyone found to be involved in underhand practices. We further recommended minimum pricing on the sale of alcohol and the practice of ‘loss leaders’ or below cost selling should be prohibited.

“The introduction of a statutory code of conduct is supported by the Irish Farmers Association, RGDATA and Food and Drinks Industry Ireland. I am Chair of the Oireachtas Agriculture Committee which recommends that SMEs should be given support towards costs that may arise from a statutory code, as many small businesses would not have the resources to deal with such legal issues.

“Ensuring a balance in the relationship between the various players in the grocery goods area is extremely important to everyone. The statutory code of conduct will help to deal with pricing and the impact on primary and secondary suppliers, support for local produce and labelling. There has been a huge strain in the relationship between suppliers and retailers, and I hope this code will go some way in addressing that.

“It is well known that large multiples have a huge dominance and unfair advantage over suppliers in the agricultural area in particular. Up to now, producers have had no recourse if they felt they were being treated unfairly by large retailers, but now large suppliers and supermarkets will have to conform to an agreed set of minimum standards of trading.

And I am calling on the Minister to appoint an Independent Ombudsman to oversee and monitor the regulations and deal directly and have resources to investigate unfair trade issues.

The Oireachtas Committee on Agriculture, Food and the Marine is currently reviewing the report issued in 2013. We have contacted the relevant stake holders with a view to revaluating the 2013 document. The Committee hopes to have this work completed in early 2017.