Growers in the Irish Republic are being put under unfair pressure by major retailers, according to a report by a parliamentary committee drawn from all the major parties.
And the report, just published, urges the next Irish government - due to be elected later this month - to tackle the misuse of power in the retail sector by introducing a statutory code of practice that will ensure “fairness and equity” for all involved. The code, it says, should be enforced by an independent arbiter, with the power to investigate complaints and rule on disputes.
“We need a code that has teeth and which will protect jobs and livelihoods,” warned committee chair Willie Penrose. “As we have seen in the banking sector in recent years, light-touch regulation can be disastrous.”
The committee expressed concern about the demands for low prices and other supports that producers are said to face from major retailers, allegedly backed by threats of import substitution or even delisting. “Such misuse of power is not only unfair but also unethical,” it declared.
The report quotes the findings of a grower survey conducted by an opposition spokesman on horticulture, Andrew Doyle of Fine Gael, tipped by some to be a minister in the new government. According to his survey, growers claimed they were regularly asked for box rebates of 2.5 to five per cent on monthly payments, plus further contributions to fund promotions and special offers. In some cases, there were demands for credit terms of four to 11 months.
Growers also complained that their prices were set by what the retailer paid for imports and were often so low they were unable to finance the next year’s planting.
The report also detailed the collapse of the Dublin Meath Growers’ co-op, following a Tesco decision to withdraw its business. The co-op had spent €5 million on a new facility to cater for Tesco and employed 80 staff, but the retailer claimed its prices were too high and took its contract elsewhere, effectively killing off the project.
Most of the major retailers testified to the committee during its hearings. A notable exception was Dunnes Stores, the second largest multiple in the state.
