Government publishes Competition and Consumer Protection Bill 2014
Minister Bruton says legal requirements for record-keeping, the inclusion of certain terms in written contracts and strong enforcement powers, will ensure relationships between suppliers and retailers in the grocery sector are ‘fair and sustainable'
31 March 2014
Minister for Jobs, Enterprise and Innovation, Richard Bruton, has published the Competition and Consumer Protection Bill 2014 and introduced it to the Oireachtas, after securing government agreement on the text of the legislation last week.
The new legislation has three main components. Firstly, it will merge the National Consumer Agency (NCA) and Competition Authority, which together with improvements in competition law, will create what the department describes as a "watchdog with real teeth". This forms part of a broader reform agenda within the Department of Jobs Enterprise and Innovation which will see the number of agencies reduced by 41 over the coming months.
Regulating certain practices in grocery sector
Secondly, the bill will "regulate certain practices in the grocery goods sector aimed at ensuring balance and fairness between the various players in the sector – suppliers, retailers and consumers".
Finally, the department states it "will update and modernise the law on media mergers to take account of international best practice and technological developments".
Commenting on the implications of the bill for the grocery sector, Minister Bruton said relationships between suppliers and retailers "will continue to be based on commerce and prices will continue to be set by hard negotiations – this is in the interests of consumers. However new legal requirements for record-keeping and the inclusion of certain terms in written contracts together with strong enforcement powers will ensure that these relationships are fair and sustainable."
Provision to allow for statutory code
Food and Drink Industry Ireland (FDII) has welcomed the publication of the new bill and its provision to allow for a statutory code of conduct in the grocery goods sector.
FDII director Paul Kelly said: "A statutory code is critical if the food industry is to continue to provide high-quality Irish products, choice and convenience to Irish consumers at a fair price.
"Unfair practices faced by food companies include a failure to respect contractual terms, de-listing threats and unilateral deductions off-invoice without sound business reasons. In the short-term these demands impact on individual suppliers, but ultimately they are also bad for consumers."
He added that the government had said legislation to introduce an Irish code would be published in the final quarter of 2012, so it is "critical that the provisions in the bill to implement a code are undertaken urgently."
‘Nothing to fear from sensible legislation’
However Retail Ireland adopted a more cautious stance. Director Stephen Lynam said: "Retail Ireland has always been supportive of fair practices in the food supply chain and we are committed to the provisions of the recently introduced European voluntary code of practice in this area. Our position has always been that retailers have nothing to fear from sensible regulation. As such, we welcome the fact that the bill does not provide for an expensive, cumbersome and bureaucratic code of conduct.
"While we continue to study the contents of the bill, and its impact on retailers, we urge the minister to ensure that all decisions ultimately made under the bill are reasonable and proportionate. Given the very narrow margins retailers are operating under, any move that would increase business costs would likely lead to increased prices for consumers."