We all know what it means. That is very much what suppliers feel it means. Individuals are reluctant to speak out because they are afraid they will lose their customer and, very often, the supermarket is their only customer. It is an indirect way of collecting "hello money" and if the supplier wants the shelf space for the upcoming year, the retailer wants a rebate for the previous year. That practice is called a long-term agreement. Many of these costs are within the control of the Government.
The Oireachtas must demonstrate it is serious about reducing inflated costs. Business costs, which were mentioned by retailers earlier, are also an issue in the context of the competitive base for doing business. The cost of doing business is out of line with our main competitors. It has been aggravated by the sterling issue but a number of costs are within Government control. It must demonstrate it is serious about reducing these inflated business costs, including labour and energy costs, to improve competitiveness within the economy.
I welcome the comments of the Minister for Communications, Energy and Natural Resources earlier about electricity costs. We have raised this issue over a number of weeks. Electricity prices increased by 17.5% over the past year when oil cost $147 per barrel. It reduced to $37 a barrel and it is approximately $50 a barrel currently. Electricity has become a significant cost for farms and every other business in the State and it must be addressed.
The supermarkets must also address their operational cost base to improve their competitiveness. It is obvious to everybody that major investment in retail supermarket space has been undertaken throughout the country over the past decade. The country has 30% over-capacity in retail space. Committee members have referred to various supermarkets recently built outside towns in their localities. There is a 30% surplus of retail space.
Food products represent the main materials sourced in Ireland by supermarkets and our concern is the food manufacturers and farmers are being targeted to pay for the over ambitious investment decisions made in boardrooms in Dublin and outside the country. Supermarket groups set a target for development in this market and they have striven to achieve it, which has led to over-capacity.
The Oireachtas can play a part in the various proposals we have made in our submission. There should be a code of practice for retailers in the context of the pressure being exerted with regard to prices. We are being forced to produce food at below cost. That position is unsustainable and, in the long term, it will damage food security, not only in Ireland but also in Europe. That issue may have to be addressed at European level.
We are going to become more dependent on imported foods that are not produced to the same standards that apply here. We are expected to meet the highest standards. I often state that we have the highest standards in the world for our own farmers but we have the lowest in the world in respect of imports. There are products being imported into Europe which would not be allowed into Japan, Korea, the US and several other major markets. The standards applied in respect of farmers in Ireland and throughout Europe are much higher than those applied in respect of producers in the US, Japan or anywhere else. That is a fact.
I will not comment further. Members have been provided with details of our proposals. The Government put down a commitment in its programme for Government that it would follow up on beef labelling. This has not happened. The legislative provision made in respect of beef labelling is not being implemented. Fewer than 30% of outlets are informing consumers with regard to the origin of beef, even though there is a legal requirement to do so. No one is policing the situation. Consumers probably know less now about what they are eating than ever before.
