MINISTER FOR the Environment John Gormley is likely to reject a call by the Competition Authority for changes to planning rules to allow the construction of giant, out-of-town grocery outlets.
The authority yesterday published a report calling for the lifting of the cap on the size of retail grocery stores to allow for construction of hypermarkets and to encourage new entrants to the market. The Minister responded by announcing a review of existing retail planning guidelines next year, but said this would take in to account "broader issues".
Retailing should remain a core function in town and village centres, he emphasised, and access to public transport should be a key factor in deciding the preferred locations for retail development.
"I wouldn't hold my breath for any changes that allowed major out-of-town development sucking business out of existing town centres," said one source.
In contrast, the authority favours removal of planning restrictions to allow construction of large stores. It says ending restrictions on the size of grocery stores would help drive prices down without costing the Government any money.
A failure to reform the retail planning system would see further flight of consumers to shops outside the Republic, it warned. "Under the current system, people are voting with their feet. Just look at the queues of people going to Northern Ireland to do their shopping," said Bill Prasifka, chairman of the authority.
The report says the planning system restricts the size and location of grocery retail outlets. Uncertainty over granting of planning permissions can also raise the cost of building new shops as well as delaying their arrival.
"These factors limit competition between retailers and also between grocery brands. Together they restrict consumer choice and value for money," according to the report. As a result, Ireland does not have any large-scale, low-cost grocery retailers such as in other EU states.
Under current retail planning guidelines, in place since 2001, a 3,500sq m cap applies to large food stores in the greater Dublin area. Elsewhere, the cap is 3,000sq m. Mr Prasifka says such a "blanket ban" on larger stores is disproportionate.
He also claims a separate cap of 1,000-1,500sq m on the size of discount food stores is discriminatory and should be removed.
The authority says an assessment of existing levels of competition should be carried out when local authorities are preparing development plans.
Local authorities should survey consumers to give them a voice in the planning process and provide a balance against more powerful producer interests.
Of 311 retail planning applications studied in the report, 70 were unsuccessful.
However, appeals almost doubled the average time to gain planning permission, and the report notes that three-quarters of Tesco applications were appealed, often by rival retailers, compared to one-quarter of developer-led applications. It says ways should be found to limit appeals by competitors.
"We're not saying that rights should be taken away from people," said Mr Prasifka, "but we need to recognise the potential for using the planning process for anti-competitive ends."
The authority says the recommendations do not require a sea-change in planning, but rather a "refocusing" of planning policy on competition and consumers.
The Musgrave group, which owns SuperValu and Centra, said it had serious concerns about the report and claimed there were no barriers to competition or entry. The report took no account of the choice provided by smaller shops in towns and villages, or the number of stores within easy access for shoppers, it said.
