The Competition and Consumer Protection Commission (CCPC) has found no evidence of excessive pricing in the Irish grocery retail market.
In a high-level analysis of competition in the grocery retail sector, the CCPC said that food prices in Ireland remain high when compared internationally.
However, it noted that over recent years food inflation in Ireland has been the lowest in the EU.
CCPC
The report was carried out against the backdrop of recent food price inflation and the suggestions of price gouging in the sector.
The CCPC said that there is evidence that competition in the retail grocery market has improved in recent years “on the basis of price, quality, location and service”.
It noted that concentration in the market has reduced in recent years with significant gains in market share by “some players”.
The CCPC said that it has not seen any indications to suggest that “excessive pricing” is occurring in the grocery retail sector as a result of an abuse of dominance.
“Cartel behaviour can occur in any market. The CCPC has no comment to make on possible
cartel investigations and this analysis is not relevant in that context,” the report said.
The CCPC said that the recent fall in some input prices may take time to pass through to consumers due in part to the “lag effect” of supplier/retailer contracts.
Inflation
The analysis said that “inflation can cause significant harm to consumers, especially those on low incomes”.
However, the CCPC said that price interventions that have taken place internationally have not benefitted consumers.
“Price interventions carry significant risk of unintended consequences and may actually harm consumers.”
The report was compiled following a request from Minister for Enterprise, Trade and Employment Simon Coveney.
“In my letter to the CCPC I asked them to look at a range of issues relating to the grocery retail sector. I’m pleased to see in their response to me that they have not found any evidence of excessive pricing in the grocery retail market,” the minister said.
“Their analysis has also found that competition on price, quality and location has improved in recent years resulting in more choice for consumers.
“I’m very conscious that food prices remain high when compared internationally. This report however finds that food inflation in Ireland has been the lowest in the EU in recent years and that changes in input costs may take time to be passed on to consumers.”
In addition, the CCPC has not seen any evidence that price interventions internationally have benefited consumers and indeed, may actually harm consumers.
The report has been published ahead of a Retail Forum meeting today (Wednesday, June 21), which will be chaired by Minister for Business, Employment and Retail, Neale Richmond.
“It remains the case that grocery prices are high, and so it is important that retailers continue to pass on the impact of any reduction in input costs on product prices to customers.
“I look forward to engaging with retailers tomorrow at the Retail Forum, where I intend to receive updates on their work over recent weeks and hear how they will continue to help their customers,” Richmond said.