Code of practice for grocery sector to be in place by end of year

Minister Richard Bruton says that jobs are his main priority
Minister Richard Bruton says that jobs are his main priority

22 July 2011

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The government is finally set to introduce a statutory code of practice to guard against unfair practices in the grocery sector.
A report drawn up by economic consultant John Travers released in the past few weeks contains draft proposals for this statutory code of practice.

The move follows the failure of the trade to agree a voluntary code of practice.

The Minister for Jobs, Enterprise and Innovation Richard Bruton released the report and said he will introduce the Consumer and Competition Bill, to the Dáil before the end of the year. This bill will give the code the force of law.

Mr Bruton said that this was the first step towards ensuring fair trading relationships in the grocery sector.

“Regulation of the grocery goods sector is a highly contentious area. There is an inevitable strain in the relationships between suppliers and retailers.”

The Minister said that jobs are the number one priority of the government and that an efficient grocery goods sector that provided a stable environment for small and growing businesses to make investments and expand their activities was essential.

“Ireland needs a strong indigenous food sector and a pathway for producers to export.”

He said that prices are already too high in the sector and that consumers deserved choice.

The Minister said he was disappointed that there had not been agreement on a voluntary code, as regulation by government should always be a last resort.

“Where regulation is imposed it should be forensically designed to avoid unnecessary costs on consumers and businesses, and I am determined to ensure a fair balance.”

He urged all in the trade, including consumers and small and growing businesses, to share their views in order to achieve a fair code, by 1 September.

The Irish Farmers Association welcomed the publication of the Travers report.

The IFA President John Bryan said Mr Bruton must ensure that the code also prioritised more equity in the food supply chain for primary producers as well as consumers.

In particular, he said, retailers must be held responsible for the impact their pricing policies have on the viability of primary producers.

Food and Drink Industry Ireland (FDII), the IBEC group that represents the food sector, also welcomed the Travers report.
FDII head of consumer foods, Shane Dempsey, said that the food industry has long sought a code of practice.

He said: ”We agree that job creation and consumer interests are a key priority and that the food and retailing sectors must deliver an efficient grocery goods sector.

“We will engage in the consultation process to ensure that a new code allows producers, suppliers and retailers to get a fair reward for delivering quality products to consumers.”

Musgrave also acknowledged the publication of the report.

It released a statement saying that it looked forward to participating in the forthcoming consultation process and said that the company had consistently supported the establishment of a voluntary code to eliminate out of contract, unfair and unsustainable business practices targeted at SMEs.

Other retailers have been against the code in the past stating that it will just serve to cost retailers money and push the overall cost of goods up.



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