The Competition and Consumer Protection Commission (CCPC) has warned the government against placing food price caps on groceries.
Taoiseach Leo Varadkar told the Dáil today (Wednesday, May 10) that preliminary advice received by the government from the authority “cautions strongly against the introduction of price controls”.
The CCPC pointed out that similar proposals in Spain were abandoned because of the impact such a measure would have on small retailers, particularly those in rural areas where higher margins are required to keep those businesses afloat.
The authority noted that there was a lack of evidence that food price controls introduced in France and Germany had helped consumers.
The Taoiseach said that the CCPC also warned of “unintended consequences” where if some prices are controlled, other prices not covered by such a measure could be “put up even more”.
“The commission very much cautions against that approach,” Varadkar said.
Food price
The Minister of State at the Department of Enterprise, Trade and Employment, Neale Richmond is chairing a meeting of the Retail Forum this afternoon to discuss rising grocery prices which have not come down in line with dropping inflation and a fall in energy costs.
The current rate of general inflation is now close to 6%, down from a high of 10%, and it is expected to fall even further towards 4.5% this year.
According to latest figures from data company Kantar, grocery price inflation in Ireland was running at 16.6% in the 12 weeks to April 16.
“Our farmers haven’t seen the prices they’re paid at the farmgate increase at the same rate we’ve seen prices go up at the check out despite very real increases in costs for them from fertiliser to energy and much more.
“We are expecting both the retailers and food companies to act in a manner that drops prices at the checkout, especially in staple goods, while also protecting the prices paid to our farmers,” the minister told Agriland ahead of the meeting.
Ahead of today’s meeting, Tesco Ireland has confirmed it is to reduce the consumer retail price on its own brand bread by 10 cent.
The decision, which is likely to be replicated by other retailers, follows a series of milk and butter price cuts in the past week.