PLANS BY Minister for Enterprise and Employment Mary Coughlan to introduce a code of practice for the grocery sector have received a mixed reception.
Groups representing suppliers and small business welcomed the proposals, while Fine Gael accused the Minister of “flip-flopping” on plans to ban “hello money” demanded by retailers from suppliers.
The draft code of practice for “grocery goods undertakings” published yesterday, which includes the appointment of an ombudsman to arbitrate disputes between consumers, retailers and suppliers, is subject to a period of consultation.
Ms Coughlan said she was responding to significant public debate on grocery prices, North-South price differentials and other developments in the grocery goods sector over recent months.
She said the proposals were intended to address concerns raised about the relationships between suppliers and retailers.
“We have witnessed significant change in the Irish grocery goods sector over the past year, resulting in lower prices and better value for Irish consumers at home.
“While this is a positive result, the Government also fully appreciates the need to ensure that . . . there is transparency and a balance in the relationships between the various players in the grocery goods sector.”
Fine Gael agriculture spokesman Michael Creed accused the Minister of adopting three different positions on the issue of “hello money” in a day.
“Since yesterday, she has gone from a position that ‘hello money’ isn’t a problem since it’s already banned, to saying she hadn’t any ‘hard evidence’ of it, to publishing proposals to ban it.
“Despite the flip-flop, we still don’t know if the Tánaiste’s proposed code would be voluntary or statutory. A voluntary code of practice has proved ineffective in the UK,” he said.
The Irish Small and Medium Enterprises Association (Isme) called for the introduction of a statutory code to provide much-needed transparency in the relationship between smaller suppliers and major retailers.
“We are aware of several instances where small Irish suppliers have been approached and threatened by major retailers seeking exorbitant promotional payments to display their products in retail outlets,” said Isme chief executive Mark Fielding.
“This form of ‘hello money’ has become widespread and highlights the bully-boy tactics that these major retailers will use to increase their bottom line.”
Ibec issued separate and contrasting press releases on behalf of its producer and retailer sub-groups. Food and Drink Industry Ireland welcomed the Minister’s plans as a way of restricting practices that could undermine the supply chain and put the consumer at a disadvantage. It said a code would inject certainty into the relationship between suppliers and retailers and allow suppliers to protect jobs.
However, on behalf of Retail Ireland, Ibec conspicuously refrained from welcoming the proposals and warned that the interests of consumers must be taken into account during the consultation. “It is important that no obstacles are put in the way of retailers securing the best value from their suppliers and, in turn, delivering the most competitive price to consumers,” said Retail Ireland director Torlach Deenihan.
Ms Coughlan said relevant issues arising from the consultation would be taken into account in the new Consumer and Competition Bill due for publication before the end of the year. The submission deadline is September 30th.
