The Minister for Enterprise, Trade and Employment Micheal Martin this afternoon announced the end of the Groceries Order.
The Minister said that today was an important day for the Irish consumer and that it was a liberating day for competition policy in Ireland.
'Very simply, the Groceries Order has acted against the interests of consumers for the past 18 years and it is now time for consumer interests to prevail. There really was no option available to the Government other than a decision to revoke the Order,' Minister Martin said as he abolished the Order.
The Order, which bans selling goods at below their invoice price, was introduced in 1987 to prevent small shops being driven out of business by large supermarket chains. Last March, the Consumer Strategy Group recommended that the order should be scrapped, and since then Minister Martin has been receiving and considering submissions on the subject.
Minister Martin said that the Order was introduced to do other things as well. These included the protection of the independent retail grocer, but the Minister points out that the country lost nearly 2,500 grocery stores in the first 15 years of the Order's operation.
The Minister said that it was also designed to prevent the market becoming more and more concentrated in the hands of fewer, bigger retailers. But he points out that instead, the market is now more concentrated than it was in 1987 and is actually more concentrated that the British market where no ban on below cost selling exists.
'The Order was designed to ensure fair trading conditions in the grocery trade. Yet as far back as 1987, it was acknowledged that key provisions of the Order, which are still in force today, were being applied in a secretive, arbitrary and discriminatory manner,' the Minister added.
The Minister also announced today that the Government has agreed to shortly publish new legislative proposals to strengthen the provisions of the Competition Act, 2002. These proposals will prohibit the fixing of minimum retail prices by suppliers, unfair discrimination and the payment of advertising allowances and 'hello money'.
The independent grocers' group RGDATA had led calls for the Order's retention, with the support of a significant number of Fianna Fáil backbenchers.
* There has been mixed reaction to the Minister's decision. The National Consumer Agency says it was a triumph for the consumer. The Association said that the less well-off, who spend proportionately more on groceries, stand to benefit most.
But ISME has strongly criticised the decision to repeal the Groceries Order and 'in the process open the way to predatory pricing and below cost selling'.
ISME says the decision will have an adverse affect on small retailers and local suppliers, the consequences of which will be reflected in shop closures and job losses.
RGDATA said that the Groceries Order had served the Irish people well and was an instrument of public policy that had generally brought consumers choice, low prices and competition since 1987.
'The Groceries Order was brought in as a temporary measure in 1987, but has survived numerous reviews and assessments. It has been a positive instrument of public policy and has attracted widespread support from many sectors, organisations and individuals. It has left a positive legacy,' commented Tara Buckley, RGDATA's Director General.
Meanwhile, a consortium of anti-povery organisations says that lower food prices are undoubtedly needed, but to tackle prices in isolation from issues such as food affordability and accessibility will threaten the wellbeing of those in greatest need and potentially bring about an increase in food poverty.
The consortium - The Society of St Vincent de Paul, Combat Poverty Agency and Crosscare - said it does not believe that the repeal will achieve this objective in the absence of wider structural changes. Not being able to access and afford nutritious food is a reality for many households, it added.
