Shoppers not benefiting from abolition of Groceries Order but farmers’ return is cut – Naughten

Fine Gael's Fresh Food Survey 2006 has shown that food prices have increased by 14% in just one year while the price farmers receive for their produce has fallen, according to Fine Gael Agriculture & Food Spokesman Denis Naughten TD.

“Our survey in 2005 showed that shoppers were paying €20.69 for a basket of beef, milk, eggs and a range of vegetables. This year's survey shows that the cost of the same basket has increased to €22.97. Yet the average price the farmer receives for his produce has fallen.

“The Government and the Competition Authority expected the generosity of big supermarket chains to lower their prices without any legislative changes to ensure that the customer would get the benefit of any discounts and rebates that were procured from suppliers. It is clear that the Government’s strategy has failed, according to our study.

“Our study reveals that the abolition of the Groceries Order has not reduced the price of food, but it has reduced the margin which the farmer receives. In 2005 the farmer received 42% of the supermarket price, now they only receive 38% of the price the public pays for basic food products. The highest margin is on cabbage which retails at an average of €1.39 a head while the farmer gets just 40c, a margin of 247%.

“Even more surprising is the fact that while the Government promised that food prices were supposed to fall in the last 12 months due to the abolition of the Groceries Order, the reality is very different. In the case of mushrooms, the supermarket price has increased by a whopping 31% in the year and there has been a 30% increase in the price of eggs on the supermarket shelf. It is clear from these figures that the Government’s attitude to the consumer has been completely dismissive. We need a balance between protecting consumers from the blatant rip-off of escalating food prices while ensuring that farmers are rewarded fairly for their quality produce.

“Fine Gael's food proposals include a reform of Ireland's food labelling system and a streamlined State role in the Agri-food sector in order to better improve marketing and promotion and develop a long-term strategy for the sector. Initiatives like these are key to improving the position of Ireland's food industry, for consumers, farmers and retailers.

“Fine Gael proposed the changes in competition law that would have allowed, and ensured, that customers would get greater benefit from the changes in the regulations, rather than adopting the Government’s approach of enhancing the profitability of the major supermarket chains.

Continued
“Specifically, Fine Gael is calling for:

• a ban on predatory pricing within the retail trade;

• give the National Consumer Agency the teeth it needs, as outlined in Fine Gael’s Consumer Rights Enforcer Policy. This includes empowering the NCA to conduct regular price surveys that highlight good value, and name and shame those charging excessive prices;

• create a price league website with tables on all major products and work with local authorities to drive a pro-consumer agenda at local level involving regular price surveys and measures that protect consumers’ interests against local cartels;

• devise and promote a Good Practice Provider quality mark for suppliers of goods and services that agree to be bound by relevant codes of practice and develop codes of conduct for service providers and retailers on issues like passing on exchange rate movements.

“We have already seen how this Government gave preferential treatment to big business when distributing the sugar compensation package to the detriment of farmers. We now see that big business, rather than the shopper, is the beneficiary of the removal of the Groceries Order. This is just another example of how the Government has allowed the major multinational retailers to increase their turnover while farmers get a reduction in their returns.”