The Irish horticulture minister Trevor Sargent has publicly backed calls for the appointment of a retail ombudsman, and the introduction a code of practice, to protect producers from an abuse of power by the “intimidating” multiples.
Sargent, a former leader of the Irish Green Party, junior coalition partners in Brian Cowen’s government, told parliament in Dublin last week that he has been pressing his ministerial colleagues for legislation on both issues. He said the measures were urgently needed because otherwise suppliers would not be around for much longer.
The minister was speaking against the background of a full-scale supermarket price war in the Republic - and protests by angry farmers, who claim the war is threatening their livelihoods.
Last Thursday, 600 members of the Irish Farmers’ Association (IFA) blockaded the Musgrave Group’s distribution centre in Kildare in opposition to its SuperValu chain joining the prices battle with Tesco, Dunnes, Lidl and Aldi.
SuperValu announced 2,000 price cuts - several of them, like its competitors, featuring fruit and vegetables - and claimed the reductions would save €30 (£26) on shopping bills. But the protesting farmers, who had earlier targeted Tesco over potato imports they claimed were displacing local produce, paralysed the Musgrave distribution operation for the day, preventing trucks entering or leaving the centre.
IFA president Padraig Walshe, addressing the protest, warned that thousands of jobs and livelihoods were at stake. “The multiples would have consumers believe these price reductions are coming from the supermarkets’ bottom line. They are fooling no one. This race to the bottom on food prices, between Tesco, Dunnes and SuperValu, is being funded through squeezing producers.”
He called on government to establish a retail code of practice, policed by an ombudsman, to protect producers against what he called “the bargaining might of the major multiples”.
Musgrave denied its price reductions were at producers’ expense and claimed that its Irish food purchases totalled more than €2.85 billion a year and indirectly supported 14,000 jobs. It added, in a statement: “The Irish market is extremely competitive and we need to ensure our pricing is very keen to enable us to compete.”
In parliament, minister Sargent, who represents north county Dublin, which is a key horticultural area, spoke of “intimidation” in the retail sector.
“Suppliers are afraid to say publicly what they will say privately to me for fear of being identified. There has been a denial that ‘hello money’ is being demanded, as it is illegal, but I have heard references to ‘market support money’, ‘advertising money’ and ‘promotional money’. A code of practice could expose such abuses, while a retail ombudsman would be able to take evidence in private and investigate. That is why both measures are urgently required,” he told members of the house.
