Dáil Éireann debate -
Tuesday, 29 Jun 2010

Vol. 713 No. 4

Leaders’ Questions (Resumed)

Deputy Eamon Gilmore

As we all know, the incomes of most households in this country have fallen over the past couple of years. The Government led us to believe that the cost of living dropped in line with the fall in income suffered by families and households. The publication yesterday of the EUROSTAT figures on prices is revealing. They indicate the price of food in this country is 29% higher than the EU average, bread and cereals are 32% higher, meat is 21% higher and milk, cheese and eggs are 37% higher. I know the Taoiseach will argue that the figures are based on a comparison of prices conducted in early 2009 but I have studied the changes in the consumer price index since that period and, adjusting accordingly, huge differences remain between this State and the rest of Europe. I calculate the figures at 23%, 26%, 15% and 33%, respectively, for the aforementioned categories. Farmers are experiencing reductions in the price of stock, food suppliers and producers tell us they are being squeezed, in particular by the big retail multiples, and now it appears that the consumer is being screwed.

When I raised the issue of prices with the Taoiseach in May 2008, he informed me that he intended to invite in the National Consumer Agency for a discussion on the issue. Since that time, we have been hearing from the Government that some kind of code of practice would be introduced for the grocery and retail sector generally. That has not happened and the legislation providing for the establishment of a code on a statutory basis has not been introduced. Meanwhile, there is a huge gap between prices in this country and the rest of the European Union.

One of the problems we appear to face is that we cannot get to the bottom of the extent of profit taking by the big multiples because the Irish operations of UK multiples are not required to publish separate accounts. Similarly, privately and family-owned multiples are not required to publish their accounts. Will the Government consider introducing or amending legislation to require multiples which are operating in the Irish retail sector, particularly in the grocery trade because this impacts most seriously on families, to publish annual accounts so that we can get an idea of the extent to which these operations take excessive profits from their activities in this country? This is particularly important given that the prices paid to farmers and producers have decreased even while consumers are charged prices that are way out of line with the rest of Europe.

The Taoiseach

As the Deputy noted, food prices in Ireland have decreased significantly since that survey was conducted last year. The latest bulletin from the Central Statistics Office, which is the statutory agency for these matters, indicates that the price of food and non-alcoholic beverages fell by 6.3% in the 12 months to May 2010. That compares to an increase in food prices of 1.5% over the same period in the UK, as recorded in the latest retail prices index published by the UK Office for National Statistics. The differential in food prices is narrowing, therefore.

I take the point that we must continue to work on finding a balance between producers and consumers. Those who produce our food should be able to obtain a living. Thankfully, there have been increases in the price of milk in recent months. The volatility in exchange rates between sterling and the euro has not been helpful in terms of ensuring full price transparency or equating changes and trends, but the overall position is that food prices have been decreasing in Ireland.

Historically, we have had a situation in which we needed to work towards a code of practice. In September, John Travers was appointed by the then Minister for Enterprise, Trade and Employment to come forward with proposals. In addition to the cost of living, there are labour costs, energy prices and rents.

The Deputy posed a question on food prices which I will have to refer to the Minister of State at the Department of Enterprise, Trade and Innovation, Deputy Billy Kelleher, for further investigation.

Deputy Eamon Gilmore

I think the Taoiseach is living in a wonderland regarding this issue. I acknowledged in my previous question that food prices have decreased by 6.3% between the beginning of 2009 and May 2010 but they increased again in May. The same pattern can be discerned in respect of bread and cereals, meat and milk, cheese and eggs. There is no getting away from the fact that prices here are out of line with the rest of Europe. Sterling is a factor when one compares prices between Ireland and the UK but it clearly does not apply with regard to eurozone countries.

Two problems arise. First, there is a lack of urgency on the part of the Government to deal with the problem of prices. Two years is too long to be waiting for what amounts to a voluntary code of practice for the big supermarket chains. Second, while I appreciate the Taoiseach has indicated that he will ask the Minister of State, Deputy Billy Kelleher, to investigate my proposal, we need to see, at a minimum, the bottom line for the big chains. If we are in an environment where farmers are not getting paid the proper price, food producers and suppliers are being squeezed by hello money and all kinds of practices and people's incomes have dropped, it is not acceptable that the price of basic foodstuffs — the products going into the trolleys in the supermarkets — are 30% above the rest of the European Union. The Government needs to take action to address this issue and I ask it to do so.

The Taoiseach

The Tánaiste, as Minister for Enterprise, Trade and Employment, spoke to the large supermarket chains at the time those issues were being raised. Indeed, she personally raised them with the National Consumer Agency. There was a reduction of prices on a range of products across the board as a result because the retail sector had to take on board the fact that the differentials were not explicable simply by exchange rate movements or distribution costs.

In recent months, we have also seen a big improvement in relation to the Northern Ireland situation with consumers voting with their feet by staying in the Republic and doing their shopping here to a greater extent than was the case 12 months ago. This is a practical example of how competitiveness has improved and pricing has come more in line with what was available in Northern Ireland and which resulted in many people going up there to shop. The number doing so has certainly declined in recent months. There is, however, no room for complacency.

The National Consumer Agency and Competition Authority are due to be merged as a means of enhancing the consumer protection area so that people will get the best possible prices in respect of those goods and services they need on an ongoing basis. We will continue to work on that and the Minister of State, Deputy Kelleher, will proceed with existing work and examine the issue raised today.