In the papers this week 10 – 16 October 2009

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Competition Authority dismisses Tánaiste's grocery code proposals; two thirds of retailers predict further sales drop; Oireachtas committee calls on Tesco to renew DMG contract



15 October 2009

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The Competition Authority has dismissed proposals for a grocery code of conduct put forward by Tánaiste Mary Coughlan.

Responding to calls for submissions on the Minister’s proposals, the authority "questions the rationale" for modelling the Irish code of practice on the UK’s approach.

It also argues the proposed code limits the "natural tension between retailers and suppliers" and so may "slow or indeed stall" price adjustments.



Shopping at Tesco in ROI costs on average 18% more than in the north, according to a survey by Consumer Choice magazine. The Irish Times reveals Tesco has accepted prices are higher in ROI due to higher business costs, but said the average gap across thousands of goods was 12%. While this represents a considerable drop compared with pre-price war surveys, which showed a 30% differential, Paul Cullen writes that the revelation could still "give renewed impetus to cross-Border shopping".


The Oireachtas Joint Committee on Enterprise, Trade and Employment has called on Tesco Ireland to reverse its decision to withdraw business from Dublin Meath Growers (DMG). Business and reports the committee wants Tesco to support local enterprise and use this "excellent facility in north Co Dublin" because it sees "no economic sense in transporting perishable produce over 100km for processing and then shipping it back the same 100km for sale in the same county in which it was grown in the first place."


Nearly two-thirds (62%) of retailers are expecting sales to decrease between now and the end of November, according to a survey by Ibec group, Retail Ireland. Of 99 retailers questioned, only 19% are anticipating a rise in sales, and prospects for employees in the sector have also fallen, with 54% saying staff numbers would decrease and only 4% predicting an increase. Almost a third said they were expecting to bring in compulsory redundancies by the end of November.


The Donegal Democrat reports that there are fears the county’s retail sector is "plummeting into freefall." Three more businesses, including independent supermarket Gallagher’s in Killybegs, have closed, further knocking the confidence of local businesses.


The Sunday Business Post examines Dunnes Stores’ belated signing of the sale and display of alcohol code, which was first launched in May. While the Responsible Retailing of Alcohol in Ireland (RRAI) group had previously objected in the courts to the renewal of licences for off-licences at certain Dunnes outlets, those objections have now been dropped.


Glanbia has cut 20c off a two litre pack of milk, giving CMP, Snowcream, Premier, and Avonmore packs a standard price of €1.79 in the multiples and €1.99 in convenience stores. However, The Irish Examiner reports that while consumers may be happy, the Irish Farmers’ Association and the Irish Creamery Milk Suppliers’ Association have both called for an end to the price cuts, which bring pay levels below the cost of production.


Tesco chief executive Sir Terry Leahy has criticised educational standards in the UK for failing to prepare teenagers for the workplace. The supermarket boss is unhappy Tesco has to train recruits in basic numeracy and "communications skills," including writing, as a result of schools’ "woefully low" education standards. Asda chief operating officer Andy Clarke was also quoted in The Times (UK): "No one can deny that Britain has spawned a generation of young people who struggle to read, write or do simple maths. That’s why we’re finding packs of nappies discarded in the booze aisle, as the last few pounds are spent on alcohol rather than childcare."


Ireland will not follow the UK’s lead by banning tobacco vending machines in pubs and clubs, as part of its proposed tobacco display ban, reports The Irish Examiner. Health Minister Mary Harney has said the rules surrounding vending machines here are sufficiently "robust" because pubs can only allow access to machines with tokens and once they are in sight of staff. Meanwhile, retailers in the North of Ireland have already begun complaining about the ban in stores, saying they face bills of up to £15,000 (€16,000) next year to comply.


Irish shop-fitting firm Kleerex made an operating profit of €3.4 million last year as revenues rose by 12% to €76 million. The Sunday Business Post reports the low-key Dublin firm has been strongly profitable in recent years, making a €3.9 million operating profit on revenues of €68 million in 2007.


Legislation to increase the plastic bag levy will be "flexible" and take account of the consumer price index, claims Environment Minister John Gormley in The Irish Times. Last month he announced this would double from 22c to 44c, faced with rising plastic bag usage. New legislation for the charge, which was not designed "to generate revenue but to change consumer behaviour," will be published this month and enacted by the end of the year.


The Irish Times takes a look at how the widespread disappearance from shelves of longstanding product Royal Baking Powder reflects on the country’s food distribution networks. Owner Kraft has "denied absolutely" any plans to discontinue Royal Baking Powder altogether at the end of this year, but claims when it bought the brand from Danone two and a half years ago, it inherited a complex distribution chain which had recently broken down.


Retailers are gearing up for a rush of applications for seasonal jobs in the run-up to Christmas, claims The Sunday Business Post. According to Barry Whelan, MD of Excel Recruitment, the market is "very different" compared to pre-recession days, and "at the moment, if you run a small amount of advertising, you can get a huge amount of applications." Torlach Denihan, director of Retail Ireland also confirmed some bigger retailers will "take in as many temps as they have full-time staff."


More than 50 printing staff downing tools at Johnston Press’s Kilkenny facility from Friday will have "no impact" on publications. Head of the group’s Irish division Barry Brennan, insisted the action arising from 46 staff being given redundancy notice in September – with jobs moving to other plants in Limerick and Portadown – wouldn’t affect newspapers, including ‘The Kilkenny People’, ‘The Tipperary Star’ and Clonmel-based ‘The Nationalist’, because contingency plans are in place.


A television advert for the pro-biotic yoghurt drink Actimel has been banned for suggesting it protects children against falling ill. The Daily Mail (UK) reports the Advertising Standards Authority (ASA) has ruled the advert was ‘misleading’ and its claim that the drink was ‘scientifically proven to help support your kids’ defences’ had not been proved categorically. Unfortunately for the pro-biotic sector, the news came just weeks after the EU rejected a number of health claims linked to similar products.


Despite previously stepping back from an online shop because of the huge costs involved in setting up the distribution network, it looks like M&S could be preparing to offer the online service, reports The Daily Mail (UK). While the exact details of the venture are as yet unknown, the paper reports the supermarket chain is also looking at selling major brands, such as Kellogg’s corn flakes, Heinz beans and Coca-Cola, which would allow customers to carry out their full weekly shop using the M&S service.


Bord Bia has launched an intensified drive to boost the food industry’s exports, valued at €8.2 billion last year. The Irish Examiner reports it is co-ordinating the participation of 30 Irish companies at Anuga 2009, the world’s top food and drink fair, which opened at Cologne in Germany last weekend, and hopes several eurozone markets could offer new retail opportunities for Irish produce.



More than 130 Roscommon farmers vented their anger at recent agricultural cuts, by driving in cavalcade through Roscommon town at lunchtime on Monday. The Roscommon Champion reports IFA regional development officer, Adrian Leddy claimed local retailers were "very supportive" of the demonstration because farming sector cuts meant "the spending power to local businesses."






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