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Dáil
‹ Leaders' Questions

Supermarket prices and grocery competition

Summary

John Halligan calls for talks with supermarkets and a price freeze on essential groceries, citing food poverty, rising prices and undisclosed profits. The Tánaiste cites differing price data and says forthcoming consumer and competition legislation will address anti-competitive practices.

The results of several surveys released in recent weeks strongly indicate that the Irish consumer is still paying a premium for groceries compared with consumers in other EU countries. Supermarket chains across the country have refused to disclose their profit margins. The rumour that Tesco dubs this country "Treasure Island" is well known. Although families are struggling to cope with the downturn, major supermarkets are pushing prices even higher than the boom time rates. A survey by the Consumers' Association of Ireland found that the price of 16 out of 19 popular and essential grocery items had increased by between 12% and 32% since 2011, against the background of a 1.7% inflation rate. Almost all of the products cost more than they did at the height of the boom, costing the average family an extra €870 a year. There are also strong indications of widespread price matching among these chains. They are extracting colossal profits from this country. Is it not time they gave something back?

Combat Poverty, when it was in existence, Social Justice Ireland and the Society of St. Vincent De Paul have used the word "profound" when talking about food deprivation and food poverty. Many of these supermarket chains have no compassion whatsoever when they hear of people suffering from food deprivation. They have no compunction about increasing their profits. I was in a house last week with a mother and four children. The mother was ill and the eldest daughter, who is 14, was making dinner. I was saddened and upset to see that the dinner consisted of beans and chips. That is wrong. It was their Sunday dinner. They are struggling to make food last until they receive their social welfare payments on Tuesday or Wednesday. That is unacceptable and it is wrong when one sees the profits the supermarket chains make.

Comment on this

Will the Tánaiste investigate the possibility of holding talks with the major retail chains to introduce a price freeze on household staples until the economy has turned around? The Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, was able to do it in the 1990s with a price freeze on drink. Surely we are capable of meeting those chains and asking them to consider doing this. Following talks with governments, major supermarket chains in several EU countries have introduced price freezes. We should bring those chains in and ask them to do the same here. Otherwise we should introduce price freezes on essential goods such as bread, milk, butter and baby food.

Comment on this

There is a good proposal. The Tánaiste should put that on his parsnips.

Comment on this

I am aware that the Consumers' Association of Ireland compared 19 branded products in 2011 and 2013 and found there was a 12.6% increase in the cost of the basket surveyed. For the consumer price index, the Central Statistics Office surveys more than 50,000 prices taken on 632 item headings. That shows that for food and non-alcoholic beverages, prices have fallen by 6.3% since 2008. The most recent CSO figures show an increase of 1.6% for the year ending March 2013. I understand this is explained by an increase in certain commodity prices, some of which were affected by weather and energy costs.

The programme for Government contains a specific commitment to enact legislation to regulate certain restrictive anti-competitive practices in the grocery goods sector. The Government intends to give effect to this commitment by including an enabling provision in the consumer and competition Bill, which will also merge the National Consumer Agency and the Competition Authority, update and reform competition law on foot of a review of the operation and implementation of the Companies Act 2002, and give effect to the recommendations of the advisory group on mergers. Work on the drafting of the consumer and competition Bill is advancing and the Bill is included in the A list of the Government's current legislative programme, so we expect it to be published in this session. In addition, staffing for enforcement in competition is being strengthened by the recruitment of some new personnel.

Comment on this

I have no doubt we are in the grip of a nutritional recession, triggered by food poverty. I appeal to the Tánaiste to deal with supermarket chains that refuse to reveal the huge profits that everybody knows they make. Everyone else in the country has been asked to help the economy. The people who are suffering from food deprivation have had to take cuts, yet the big supermarket chains increase their profits year after year. Surely it is not unreasonable to ask the Tánaiste to do as governments have done in other countries, while this recession is still destroying the quality of people's lives, and at the very least ask the supermarket chains to freeze the prices of essential food items.

The Tánaiste did not answer all of my questions. Will he consider asking the Tescos, Aldis and Lidls to freeze the prices for two years on the 19 essential food items such as bread, milk, butter and baby food? They will still make astronomical profits in that time. We should be asking them to make their contribution to help out the economy, as everyone else has. If they do not bring in this freeze, we, as legislators, have the ability to bring in a price freeze on essential items and that we should do.

Comment on this

As I said, the Government is taking the legislative route on this issue. We can have all the discussions we want on this matter. I agree with the Deputy that the supermarkets should not be increasing the prices of essential goods. We gave a commitment in the programme for Government that we would deal with anti-competitive practices in the grocery goods sector. We will deliver on that in the consumer and competition Bill, which will be published this session. There will be an opportunity for Members to participate in the debate on the Bill when it is presented. That action is being taken to protect the consumer against overpricing, profiteering and anti-competitive practices in the grocery goods sector.

Supermarkets and supermarket chains are aware of the Government’s intention in this regard. The message should be clear to them on their pricing policies. I would expect them to act accordingly.

Comment on this