IFA says draft retailer legislation a ‘waste of time’ and threatens to withdraw support
The IFA has said that the Government’s draft Competition and Consumer Protection Bill will do absolutely nothing to protect vulnerable farmers and suppliers from retailer abuse. It has to be strengthened significantly to stamp out abuses by retailers and to give greater bargaining power to primary producers and small suppliers.
Mr Downey warned “the proposed Bill that fails to square up to the power of the retailers. Unless the Government moves to substantially strengthen the Bill, it will represent a waste of time and IFA will have no option but to withdraw our support for the legislation”.
Eddie Downey stressed “the draft legislation as it stands will not stop the outrageous 5c/kg below cost selling that seriously destabilised the Irish vegetable sector last Christmas. Neither is there provision for an independent Ombudsman to investigate complaints and oversee the behaviour of retailers as regards the grocery trade”.
“Enterprise Minister Richard Bruton’s Bill falls far short of what is required to rebalance power in the food supply chain and to stop unfair trading practices by the large retail multiples. The Minister must stop paying lip service to the real concerns of suppliers.
He said it’s time for the Government to get serious and for Minister for Agriculture and Food Simon Coveney to ‘tog out’ for farmers and suppliers. “Otherwise, the multiples will continue to drive down prices to unsustainable levels, and impose conditions on suppliers that jeopardise the sustainability of Irish food producers and suppliers”.
IFA has identified a number of key amendments that are required if the legislation is to be effective in making a real change in the relationships between retailers, suppliers and farmers as primary producers:
- An Independent Ombudsman to be appointed by the Government to oversee and implement the regulations in respect of grocery goods undertakings. This would be similar to the Groceries Code Adjudicator in the UK, whose office costs a total of £800,000 per year and is 100% funded by retailers. IFA has no confidence in the new Competition and Consumer Protection Commission, which will result from the merger of the NCA and the Competition Authority, to act in defence of farmers and growers;
- The disclosure of profits in the Irish market of large retail multiples, to improve transparency;
- To expand the scope of the regulations to cover transactions between producers and suppliers at all levels in the supply chain, reduce the turnover threshold for relevant grocery goods undertakings from €50m to €10m. Otherwise, the provision for written contracts in the Bill will not extend to very many fruit, vegetable and potato growers because they would be supplying merchants/suppliers with a smaller turnover;
- Prohibit below cost selling, which ultimately is paid for by the farmer and undermines the sustainability of primary production;
- Payments for grocery goods must be made within 30 days; and,
- Prohibit contracts that contain payments of ‘hello money’ to get product on shelves, demands for ‘pay to play’ or Long-Term Agreements, which provide for the payment by suppliers of substantial ‘off-invoice rebates’ at the end of a trading period.