The Tánaiste and Minister for Enterprise, Trade and Employment, Mary Coughlan, has launched a public consultation process in relation to the introduction of a Code of Practice for Grocery Goods Undertakings.
It is intended to address concerns raised about the nature of the relationships between grocery goods businesses and, in particular, in the relationships between suppliers and retailers of grocery goods.
Launching the consultation, the Tánaiste said: "We have witnessed significant change in the Irish grocery goods sector over the past year, resulting in lower prices and better value for Irish consumers at home. While this is a positive result, the Government also fully appreciates the need to ensure that, in this drive for better value, there is transparency and a balance in the relationships between the various players in the grocery goods sector. Any Code of Practice must have as its key objective the need to achieve this balance between all stakeholders, including suppliers, producers, retailers and consumers."
The Tánaiste said that she had consulted closely with her colleagues, the Minister for Agriculture, Fisheries and Food, Brendan Smith, and the Minister of State for Food and Horticulture, Trevor Sargent, in preparing the consultation paper.
"In Ireland, the agri-food sector is one of our most important indigenous industries employing some 50,000 people directly and providing the primary outlet for the produce of 128,000 family farms," she said.
"Given this significance, and the importance of ensuring a vibrant and competitive retail sector, the introduction of a Code of Practice can provide a transparent framework for business conducted between all undertakings involved in the grocery goods route to market."
The consultation process has been welcomed by the Irish Small & Medium Enterprises Association. Its chief executive Mark Fielding said: "The Association is aware of several instances where small Irish suppliers have been approached and threatened by major retailers seeking exorbitant promotional payments to display their products in retail outlets."
However the farmers' group ICMSA has slammed the move and labelled it a 'cop out'. ICMSA President Jackie Cahill accused the Tánaiste of "operating a system of non-government though endless consultation and prevarication that positively avoids taking necessary decisions in the national interest." IFA Deputy President Derek Deane said the move is a clear acknowledgement that supermarkets are abusing their dominant position in the food chain, with the result that farmers are being forced to accept prices below the cost of production.
Mr Deane said: "The Tánaiste's proposals for a Code of Practice are a positive development, but to be effective in eliminating abuses by supermarkets, the code must be established on a statutory basis and enforced by a properly-resourced Ombudsman. The legislation must outlaw threats of delisting and other strong arm tactics by supermarkets which compel suppliers to fund price discounting."
Retail Ireland Director Torlach Denihan said: "Retailers look forward to participating in the consultation process on this draft code. In this process the interests of consumers must be taken into account. It is important that no obstacles are put in the way of retailers securing the best value from their suppliers and, in turn, delivering the most competitive price to consumers."
Retail Ireland is the representative body for the entire retail sector in Ireland and is affiliated to IBEC.
