Vol. 518 No. 5
6 Mr. Callely asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on whether the grocery industry is vibrant and healthy, offers the consumer tremendous choice and good value; and if she will make a statement on the matter. [11926/00]
The grocery industry is an important part of the Irish economy, both through its direct contribution to GDP and employment and through its linkages with other sectors of the economy. The AC Nielsen, Retail Census 1998 showed that there were over 9,000 retail grocery outlets in Ireland of which multiples accounted for 157, symbol groups 1,152, and independents 7,872.
The industry is seen as attractive, as evidenced by the increase in the number of international retailers entering the market and levels of investment by existing enterprises. The CSO household budget survey shows that average weekly household expenditure on food increased by 25.8% between 1987 and 1994-5. This increase in average expenditure, combined with the impact of rapidly increasing employment levels in the economy and new household formation, suggests the industry will continue to expand.
Irish consumers have benefited significantly from changes under way in the industry in recent years as retailers have invested in innovative formats, wider product ranges and improved customer services. Consumers are likely to continue to benefit further from sustained competition and the internationalisation of the grocery and wider retail markets. Maintenance of a strong, competitive retail market will be to the ultimate benefit of Irish consumers and will contribute to the overall competitiveness of the economy.
Does the Minister agree that the 1987 Groceries Order has helped the massive investment by the grocery industry since then? Does she agree that the grocery market includes the supply of grocery shops? Is she aware of the report carried out on the distributive trades which are closely linked to the grocery market? Does she agree that grocery prices have not increased, due to the retention of the order which has allowed sustained massive investment in the trade? As there are now 9,000 grocery retailers, the industry has farreaching effects.
A number of grocery retailers have been put out of business. It is interesting that the meat and fruit and vegetable sectors which are not covered by the groceries order declined to a lesser extent than the area covered by it. Competition, not just in the country but also within specific areas, is important. The retail sector has a localised market. I am concerned that consumers get good value for money.
In view of the question's mention of the vibrancy and health of the grocery industry, does the Tánaiste have a view on the future vibrancy and health of the industry if no limit is placed on the floor area of very large grocery outlets?
Placing a physical limit on the floor area of grocery outlets may not be as important as limiting the market share of one large player or a small number of large players who might collaborate and use their dominant position to abuse both consumers and suppliers. We must use whatever mechanism is necessary to do that. This is one of the issues I wish to examine and I have written to Deputies in response to a letter about the groceries order to say that we must look at this issue before we contemplate making changes. Small suppliers as well as consumers can be very vulnerable when there are only one or two large players. Such an environment would not be in anyone's interest. We need competition. We must ensure that suppliers are not exploited and that there is easy access for consumers to retail units. People should not have to travel long distances to get their basic household products.
When the report is published next week I will consult with the various groups which have an interest in this area before coming to any conclusion.
