In the papers this week 12 – 18 Sept 2009

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The cost of living increased 0.4% in August; The Commission on Taxation recommends a review of excise on alcohol; nine retailers face prosecution for fake tobacco



17 September 2009

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The Irish Times reported deflation turned to inflation once again in August, as the summer sales ended and prices rose for the first time in almost a year, according to the latest figures from the Central Statistics Office (CSO). Deflation in the Irish economy has remained deep however, with prices falling 5.9% over the past 12 months.

Likewise, The Examiner reported that the cost of living increased by 0.4% in August, citing increases in the cost of clothing and footwear, mortgage costs, petrol and diesel, and airlines prices as the main drivers of the monthly. There were falls in private rents and most food items, however.

The Examiner also reported one of the more positive responses to the recession; Dunnes Stores has opened a new flagship store in Cork’s St Patrick’s Street. The paper described the move as "a €30 million expression of confidence in the future" by Margaret Heffernan, who said the development would succeed and that the 200 people employed there would have secure jobs.

In the Irish Independent Shane Ross and Nick Webb interviewed "the big guns of Irish business" to get their views on NAMA. Mugrave’s chief executive Chris Martin was among the panel, commenting: "I fully support NAMA but I believe that safeguards need to be put in place that protect the public interest and ensure that neither the banks nor the developers benefit at the taxpayers’ expense….we need to have credible and realistic valuations of the assets that Nama takes over and we need a mechanism for risk sharing so that, if there is a problem, the taxpayer is not exposed."


The Commission on Taxation has thrown the drinks industry a lifeline with the proposal to review excise duty on alcohol, The Tribune reported. Earlier this month, Irish Distillers revealed that the Irish spirits market had shrunk by 20% between January and June, and wine sales fell by almost 7.5% in the year to June. According to the paper, the revelation came weeks after Diageo and Heineken indicated beer sales had fallen by between 3% and 4% during the same period, with Heineken warning that the outlook for its Irish operation was "weak and unclear".


Meanwhile, Musgrave has lobbied the Commission on Taxation on tax rules relating to the passing on of shares from generation to generation in family-owned businesses. Set up in 1894, the Musgrave group is currently in its fifth generation and going into its sixth. However, The Tribune reports business relief on families passing on shares stops at the third generation in Ireland.

Also in the Tribune this week, the Revenue Commissioners has confirmed that nine Irish retailers caught selling counterfeit tobacco will face prosecution. The commission is to introduce a new tax stamp as part of a "massive crackdown" on the growing black market. The stamps will have several "overt and covert security features" to inhibt counterfeiting and allow customs officers to readily detect fake products.


ADM Londis is to source up to 10% of its goods from Nisa Today, The Sunday Business Post reported. The group has secured the future wholesaling rights in the Republic of Ireland for a range of Nisa-Today’s branded product lines, according to a deal signed late last week following a trial period with a number of Londis stores.

The Examiner reported that possible forthcoming cuts ‘will undermine agriculture,’ following the Agricultural Science Association annual conference in Dublin. A national strategy must be put in place for the Irish agri-food industry "before it goes the way of the coal miners in Britain," it was revealed at the forum. The conference also heard that farming cuts imposed by the Government and proposed by ‘An Bord Snip’ will seriously undermine the positive contribution of agriculture to the economy and will lead to 12,000 job losses in rural areas.

The National Consumer Association has published new guidelines for retailers on advertising and promotions, it was revealed on The guidelines are intended to facilitate the retail sector in complying with the requirements of the Consumer Protection Act 2007 in relation to "a variety of misleading practices."

A new organisation called Retailers Against Smuggling (RAS) has called for an end to cigarette price hikes as it only benefits smugglers, The Irish Times reported. The group, which includes independents and larger chains, claims contraband cigarettes cost nearly half a billion euros in lost sales last year. The Government has increased the excise on cigarettes by more than €1 in the last three budgets.


Cadbury has relaunched Wispa Gold, the caramel version of the popular Wispa chocolate bar, with a new consumer focused campaign. The Irish Independent reports Wispa fans are being asked to submit would-be billboard messages online at and the confectioner will then display the best of these on €450,000 worth of billboard space.

Half of Ireland’s shopping centres have started to grant rent reductions to tenants, reports the Sunday Business Post. A survey of Retail Excellence Ireland (REI) members suggested that, of 58 centres around the country, 29 had given reductions in some form. However, the research, which is based on anecdotal feedback, indicated that many shopping centre owners were still refusing to negotiate with retailers seeking lower payments.


In a potent example of tensions surrounding commercial rents, staff found themselves locked out of an upmarket ladies fashion retailer in Dublin city centre this week. The  landlord of Monica John, also removed stock from the store off Grafton Street. However store director John Murphy told The Irish Times the current rent was negotiated four years ago, at the height of the property boom. Meanwhile, Minister for Justice Dermot Ahern has said that legislation providing for downward rent reviews on commercial properties for the first time would be introduced in December at the earliest.


The Irish Times examines the phenomenon of half price wines, stating while there may be "a few genuine half-price wines on the shelves from time to time, the vast majority have been artificially priced upwards with the sole aim of discounting later." The paper advises consumers: "margins on wine are generally about 30%, so a retailer is losing money on a genuine half-price wine."


Bord Bia launched National Organic Week this Monday, The Irish Times reported. Irish organic food sales have increased 13.2% YOY to €124 million, and last year reached €104 million in the year ending July 2008. The food board said it expects sales to continue growing.


To mark the occasion, Lidl has slashed the price of its organic food. Its organic carrots are €0.85 a kilo compared with a normal price of €1.66 while dozens of other items are selling at half price in the store for the rest of the week. Aldi and Tesco are also both selling "cheap as chips organic vegetables," according to The Irish Times while The Organic Supermarket in Blackrock, Co. Dublin, uniquely offers "lettuce picked at 6am in Wicklow and on our shelves at 8am."


PepsiCo has said it will increase its presence substantially in Ireland over the coming years, reports The Irish Examiner. PepsiCo Ireland was first established in 1974 and now employs over 500. Since 2002, PepsiCo has invested over €100m in its Cork operations.


Drinks distribution firm Barry & Fitzwilliam saw pre-tax profit rise 6% to €3.4 million last year but has said 2009 is proving tougher. Company director, Michael Barry, has attributed much of this year’s growth to strong Corona sales. The Irish Examiner states volume sales of Corona surged 50% compared with the same month last year.


American health experts have demanded a sugar tax on sweetened carbonated drinks and fruit juices. The Irish Independent reports a group led by academics from Yale and Harvard universities has proposed a "cola war", with a 1 cent tax per fluid ounce on sweetened beverages, raising the price of the average can of cola by 15 to 20%. They claim say this would cut calorie consumption from drinks by 10% (enough to prompt weight loss) and contribute almost $15bn towards the health costs of obesity.




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