New retailer legislation may force processors to provide contracts

The Minister for Jobs, Enterprise and Innovation, Richard Bruton, published the Competition and Consumer Protection Bill 2014 last month, after he secured Government agreement on the text of the legislation. 

Following a meeting of IFA’s Retail Project Team, IFA President Eddie Downey said that key concerns were expressed by the Association’s Commodity Chairmen in relation to the new Bill, and that further legal clarification is being sought on a number of issues.

The legislation has two main components that impact on the agri-food industry: 1. Merge the National Consumer Agency and Competition Authority and deliver improvements in competition law to create a watchdog with real teeth; and, 2. Regulate certain practices in the grocery goods sector aimed at ensuring balance and fairness between the various players in the sector – suppliers, retailers and consumers.

“IFA believes that the real test of the new legislation will be a fairer return to producers, which covers the cost of production and leaves a margin to reward their work and investment,” said Mr. Downey.

As the proposed legislation stands, farmers supplying to companies with a turnover of less than €50m will not be required to have a contract, which is a real concern, especially for fresh produce producers.

On the other hand, farmers, including livestock producers who supply sheep and cattle to processors with a turnover of over €50m, will have to be provided with a contract. If this transpires to be the case, the right of collective negotiation will be critical to protect small and medium-sized producers, particularly on the terms and conditions of the contract.

“The publication of this legislation, which IFA has long campaigned for, is progress and is a first step. However, the legislation does not address a number of key issues that IFA has identified as necessary to restore equity to the food supply chain and curb the dominance of the retail multiples. The latest figures released show the three major multiples control over 80% of the grocery market.”

Eddie Downey said there was much disappointment expressed by members that the Bill failed to include a prohibition on below cost selling, that there is no provision to put limits on the use of own-brands by retailers and for retailers to disclose profits.

The Bill has also failed to provide for ‘Retention of Title’ for goods delivered until such time they are paid for and does not address the erosion of production prices resulting from the use of tendering rather than contract negotiation for the supply of certain produce” said Mr. Downey.

IFA is determined that the Regulations, to be introduced as part of the legislation, must recognise the role of the primary producer in the chain, especially those producers in the fresh produce sector.

“On the proposed merger of the National Consumer Agency and the Competition Authority into a new Authority called the Competition and Consumer Protection Commission, IFA‘s position has always been that an Independent Ombudsman should be appointed by Government to oversee and implement this legislation. IFA is concerned that the proposed new Authority will not be sufficiently independent to provide anonymity and confidentiality to suppliers who make complaints,” said the IFA President.

 

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