The Labour party’s spokesperson on Finance, Public Expenditure and Reform, Enterprise and Trade, Ged Nash has called on the Government to follow the example of the UK government to bring retailers together to request that they introduce voluntary price caps on some on brand staples.
There was mounting evidence across Europe that food inflation was “extremely sticky” he told RTÉ radio’s Morning Ireland.
Mr Nash acknowledged that supermarkets could be “playing catch up” in terms of lost profits in the aftermath of the illegal Russian invasion of Ukraine.
“What we’ve been calling for since the outset of this problem is for the Competition Protection Commission (CPC) to undertake a detailed market analysis to fill in some of those gaps. We know, for example, that labour costs are modest. We know that input costs generally are coming down, but food inflation is extremely sticky. So the reality is, compared to this time last year, Irish consumers are paying almost one fifth more in terms of weekly shopping than they were last May.”
The CPC was still not empowered to go into supermarkets to look at what prices they were charging. “We know that the supermarket sector generally across this country is one of the most secretive economic sectors, and that’s one of the missing gaps that we have in terms of price transparency.
“We understand what the input costs are, we understand what labour costs are, energy costs and so on. We know that the staples are coming down. But food inflation is still extremely high. We saw some fairly derisory cuts ahead of the retail forum meeting chaired by Minister Richmond last month – bread, milk, eggs and butter but that had no impact at all or a meaningful impact on grocery inflation.
“So we produced some legislation just a couple of short weeks ago that would do two things. It would enable the CPC to undertake a deep market analysis of actually what’s going on in the sector. Look at how they structure the price of goods, look at their costs and look as well critically, of profits across the sector.
“But also what we would do is use competition law because the consumer law actually in this country is especially weak. And if it was found that retailers are actually abusing a dominant market position, then they would fall foul of competition law. And that’s the important thing.”
The Louth TD said that the Government could not “simply take the word” of Retail Ireland which said that consumers will benefit from falls in commodity prices, but there’s a bit of a time lag because last year retailers held off on increasing prices for as long as possible.
“This is what they’re saying, but we simply can’t take their word for it. And this is where the problem lies. And that’s why we need more price transparency so we can draw the dots. Retailers who aren’t involved in profit taking or price gouging will have nothing to fear from shining a light into those dark corners, because I think light in this regard is the very best disinfectant.”
The Government could follow the example of the Tory Party, “the party of billionaires” which was “run by an extremely wealthy individual. He understands the severe impact of grocery inflation on the UK population and Rishi Sunak the Prime Minister has decided to bring the retailers together to request that they introduce voluntary price caps on some brand staples, which will have an impact on the bottom line for shoppers in this country as well. This is something that this government has failed to do.
“I would rarely advocate that anybody would follow the lead of the Tory party in the UK, but it just shows you the mess I think that this Government has made of the grocery inflation situation.”
Mr Nash said that in the next three weeks there needed to be “a serious stab” at reducing prices.