Tánaiste Launches Public Consultation on Code of Practice for doing Business in the Grocery Goods Sector
The Tánaiste and Minister for Enterprise, Trade and Employment, Ms. Mary Coughlan, T.D., today (Tuesday, 11 August 2009) launched a public consultation process in relation to the introduction of a Code of Practice for Grocery Goods Undertakings.
The proposed introduction of such a Code of Practice follows significant public debate on grocery prices, north south price differentials and other developments in the grocery goods sector over recent months. It is intended to address concerns raised about the nature of the relationships between grocery goods businesses and, in particular, in the relationships between suppliers and retailers of grocery goods.
Launching the consultation, the Tánaiste said, “We have witnessed significant change in the Irish grocery goods sector over the past year, resulting in lower prices and better value for Irish consumers at home. While this is a positive result, the Government also fully appreciates the need to ensure that, in this drive for better value, there is transparency and a balance in the relationships between the various players in the grocery goods sector. Any Code of Practice must have as its key objective the need to achieve this balance between all stakeholders, including suppliers, producers, retailers and consumers.”
The Tánaiste said that she had consulted closely with her colleagues, the Minister for Agriculture, Fisheries and Food, Mr. Brendan Smith, T.D., and the Minister of State for Food and Horticulture, Mr. Trevor Sargent, T.D., in preparing the consultation paper. She said that, “In Ireland, the agri-food sector is one of our most important indigenous industries employing some 50,000 people directly and providing the primary outlet for the produce of 128,000 family farms. Given this significance, and the importance of ensuring a vibrant and competitive retail sector, the introduction of a Code of Practice can provide a transparent framework for business conducted between all undertakings involved in the grocery goods route to market.”
Emphasising the central importance of the consumer in any code introduced, Ms. Coughlan continued, saying, “Any Code of Practice must also ensure that the interests of the consumer is at its core by prioritising the need to enhance consumer welfare and ensuring that there is no impediment to the passing-on of lower prices.”
The consultation launched by the Tánaiste asks eight key questions of stakeholders, including consumers, in a consultation paper available on her Department’s website. The questions include: whether any such Code of Practice should be voluntary or statutory in nature; how it may best be enforced; whether a separate Ombudsman’s office should be established; whether there should be a threshold to limit its application; and what impact application of such a code may have on consumer choice and prices. The consultation paper also includes an initial draft outline for such a Code of Practice and seeks views on its provisions.
In launching the public consultation, the Tánaiste also said that she intended to take into account relevant issues arising during its course in her finalising the provisions of the new Consumer and Competition Bill, which is due for publication before year-end. “It is my belief that putting in place a strong consumer and competition infrastructure, together with the introduction of any fair and balanced Code of Practice, which at its heart respects the interests of all parties, will help to ensure that we continue to have a vibrant agri-food sector in Ireland and a retail sector delivering choice and value to Irish consumers.”
The consultation on a Code of Practice for Grocery Goods Undertakings follows a series of actions directed by the Tánaiste and undertaken by her Department and its agencies within the last year regarding the retail sector, including: National Consumer Agency Price Surveys; the Forfás Report on the Cost of Running Retail Operations in Ireland; and the Competition Authority Study on the Retail-Related Import and Distribution Sector. The Tánaiste said that informing the debate and piercing myths through this work had played an important part in ultimately arming the consumer with the information necessary to make choices and achieve better value. She said that it was now important that the greatest possible degree of transparency is put in place about the nature of commercial relationships between grocery goods undertakings.
Concluding, the Tánaiste encouraged all stakeholders and interested parties to read the consultation paper and draft outline for a Code of Practice and make their views known by way of submission before the deadline of Wednesday, 30 September 2009.
Further information and a copy of the consultation paper is available on the website of the Department of Enterprise, Trade and Employment at the following link: http://www.djei.ie/commerce/competition/whatsnew.htm
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Information for Editors:
A copy of the consultation paper detailing the various issues upon which the Tánaiste is inviting views is available on the Department of Enterprise, Trade and Employment website at http://www.djei.ie/commerce/competition/whatsnew.htm
The consultation paper sets out a series of questions on which the specific views of interested parties are required: these are as follows:
Q.1 Should the introduction of any Code be on a voluntary or statutory basis? Who should draw-up such a Code? How do you see compliance costs varying between a voluntary and a statutory Code?
Q.2 Depending on whether any Code is voluntary or statutory, how should it be enforced? How should such enforcement be funded?
Q.3 Should a separate Ombudsman’s office be established, and, if so, how and by whom will this be funded, both on establishment and on an ongoing basis?
Q.4 What type of grocery chain elements should be covered by the Code? Should a threshold be introduced to limit the application of the Code? If so, on what criteria should it be based and at what level should it be set?
Q.5 Should any Code be limited in geographical extent and, if so, what should that limitation be and how would the provisions of the Code be enforced against grocery goods undertakings located outside the jurisdiction?
Q.6 Will the provisions of the initial draft outline Code (appended to the consultation document) help to achieve a fair balance in the relationships between retailers and suppliers? Are there any specific provisions, which inhibit achieving that balance? Are there other provisions, which might help to achieve that balance?
Q.7 What will be the impact of any Code on the consumer and prices of goods for consumers and how should any Code be framed to enhance consumer welfare and the need to ensure that there is no impediment to the passing-on of lower prices to consumers?
Q.8 Has the reader any specific comments to make on the contents of the draft outline Code of Practice for Grocery Goods Undertakings, appended to the consultation document?
Comments on the consultation paper should be submitted by close of business on Wednesday, 30 September 2009 by electronic format to conspol@entemp.ie, or by post to Grocery Code of Practice Consultation, Competition and Consumer Policy Section, Department of Enterprise, Trade and Employment, Earlsfort Centre, Lr. Hatch Street, Dublin 2.
All comments, observations and submissions will be subject to the Freedom of Information Acts 1997 – 2003 and may be put up on the Department’s website. Consequently, when submitting material, parties should identify any information, which they do not wish to have released together with an accompanying explanation.
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Last modified: 11/08/2009
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