Dáil Éireann Debate, Thursday - 29 June 2023
65. Deputy Paul Murphy asked the Minister for Enterprise, Trade and Employment how he can reconcile the finding of the CCPC that there is no excessive pricing in the grocery sector with the fact that Irish prices are 46% higher than the EU average; and if he will make a statement on the matter. [31660/23]
View answerFirstly, it is important to examine the Eurostat data on prices in context.
In several categories, Ireland performs better than, or on par with, other small and open EU economies. For example, when it comes to the price of food and non-alcoholic beverages, Ireland outperforms economies such as Norway, Denmark, Luxembourg, and Malta, and EEA members, Switzerland and Iceland.
Ireland has also introduced minimum unit pricing for alcohol, and also has relatively high rates of tobacco taxation – these policies do inflate the price of affected products, but are part of a considered national public health strategy.
The CCPC report focuses on the grocery retail sector and assesses: (1) market concentration and market development over time; (2) trends in national and international food prices; (3) publicly available data relating to the profit margins of major grocery retailers; and (4) issues relating to transparency and market interventions. The CCPC establishes that retail is a high volume, low margin industry – with profit margins typically between 1 per cent to 4 per cent and finds no evidence of excessive pricing in the grocery sector.
The CCPC report sets out that Irish consumers have historically experienced relatively high grocery prices due in part to several structural factors. These include our remote geographic location, which results in higher-than-average costs for Irish importers, our relatively small population size, which means less economies of scale can be achieved, and higher costs associated with construction, legal services, and insurance.
High grocery prices must also be considered in the context of Ireland’s economic position. As set out in the CCPC report, Ireland has the 3rd highest average annual adjusted full-time salary across the EU. Ireland also reported the lowest level of household expenditure on food and non-alcoholic beverages (as a percentage of total consumption) in the EU in 2021, and has experienced the lowest level of food inflation in the EU since 2015.
The findings of the CCPC report that there is no excessive pricing in the grocery sector can be reconciled with Ireland’s high price position, when one considers these factors.
It is also worth noting that inflation in Ireland – while still elevated at 5.4 per cent in May – is declining and is down from 9.4 per cent in October. This is also below the EU average of 7.1 per cent and the Euro Area average of 6.1 per cent.
