Bruton acts to regulate grocery and agri food sector

Draft regulations aimed at regulating certain practices in the grocery goods sector, following on from the enactment of the Competition and Consumer Protection Act 2014 have been published today by the Minister for Jobs, Enterprise and Innovation, Richard Bruton.

It is envisaged that these measures will help re balance the agri food chain in Ireland.

Specifically, the draft regulations specify a requirement for good faith, transparency, openness and fairness in grocery goods dealings. Commenting on their significance Minister Bruton said that earlier this year, courtesy of the Competition and Consumer Protection Act,  the government introduced powerful new investigation and enforcement powers to help ensure fairness between suppliers and retailers in the grocery goods sector.

“That Act also gave us the power to introduce strong regulations to govern relationships in this area. There is potentially a real inequality between these players which can be abused in a manner that is not in the interests of jobs, consumers or sustainable safe food. I am now publishing the draft regulations that will guard against that.”

Commenting on the publication of the draft Grocery Goods regulations  ICMSA Deputy President  Pat McCormack, said that any move to rebalance the presently hopelessly skewed system away from retailers and towards primary producers and farmers was greatly to be welcome, and accordingly there would be a degree of optimism around at least the intentions evident in the draft regulations.

But Mr McCormack said there was a degree of scepticism about whether the Government was in earnest about rebalancing a system that presently gave the multiple retailers practically complete powers  to name their price ‘backwards’ to the producers and ‘forwards’ to the  consumer to the disadvantage of the latter and, in many  cases, the ruination of the former. Mr McCormack said that practice of using staples like milk as so-called ‘loss-leaders’ had resulted in  year-on-year declines in the share of final retail price going to the milk dairy farmers and  he cited the decline from  43% in 1995 to 32% in 2012.

The ICMSA Deputy President also expressed reservations about the appetite of the Competition & Consumer Protection Agency for what Mr McCormack said was bound to be an intense and complex struggle to rebalance the relationship between primary producer and retailer. He said that confidence in the new agency – formerly known as the  Competition  Authority – had been severely dented by their intervention in the  Beef Dispute when their statement about the need to respect competition had the  real effect of shoring up the meat  factories position and policymakers’ inactivity.

McCormack said that ICMSA had, at that  time,  described the intervention as “brass necked” and the Competition & Consumer Protection Agency had much work  to  do  if they were to convince farmers that they had the appetite and the expertise for the struggle involved in regulating corporations of enormous wealth and power.  The ICMSA Deputy President said that talk was cheap and farmers would wait to see what the Competition & Consumer Agency actually did –if anything.

The ICMSA Deputy President welcomed the publication of the regulations for consultation and he said that he did not doubt Minister Bruton’s bone fides but he felt – along with most other commentators – that meaningful rebalancing of the  EU’s food supply system back from the  retailers and towards the farmer –producers would only really work if that rebalancing originated and was supervised by the  EU Commission.

“The retail corporations involved in the wholesale abuses we see are all multi and trans-national and the ability of any one Member State to take them on must be open to question: The problem is multinational and the solution will have to be multinational also,” he commented.

“In our context this has to mean that the Commission takes the lead and begins to consciously rebalance the EU’s food supply chain back towards some degree of equity and fairness to the people who actually produce the food as opposed to the corporations who presently have more or less complete power over the process from farmer to fork.”

 

 

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