In the papers this week 28 Nov – 4 Dec 2009
Upward only rent clauses banned; one retail job lost for every 150 shoppers spending in the North; nine out of 10 retailers have cut pay in the last 18 months
4 December 2009
The Government has banned lease clauses which provide for ‘upward only’ rent reviews. The Irish Times reveals Minister for Justice Dermot Ahern signed a banning order earlier this week which is due to come into operation on 28 February, 2010. However while Retail Ireland welcomed the move, the Irish Auctioneers and Valuers Institute (IAVI) claimed the ban had been imposed without full knowledge of how the market operates.
A retail job is lost here for every 150 shoppers who spend in the North, Retail Ireland has claimed. Considering 1,700 workers could lose their jobs this month alone, The Irish Examiner reports that director Torlach Denihan has called on the Government to implement remedial action in the upcoming budget – including reducing excise, VAT, commercial rates and employer’s PRSI. He added that while those at risk of losing their jobs this month earn €63m, that the cost to the State in lost income tax lost and social welfare payments will be €34m.
Retail analysts at the University of Ulster have predicted that by the end of 2009 the loss of revenue to the Irish economy from cross-border shopping could exceed €1bn; a figure even higher than the Government’s estimate of €810m. Asda’s Strabane manager Eugene Teague told The Irish Independent meanwhile that at least 50% out of 45,000 weekly transactions at his store just across the border from Lifford in Co Donegal, were allegedly coming from the Republic, with customers "maintaining they can save 30% by shopping here."
Research by Retail Excellence Ireland (REI) has found almost nine out of ten retailers have cut employees’ pay in the past 18 months. The Sunday Business Post reports the average pay cut for retail staff was around 11%, but some companies cut wage levels by more than 20%. REI has warned that 30,000 retail jobs could go in the next 12 months, and is therefore also urging the government to introduce a temporary ban on increases in commercial rents and reduce VAT.
With the euro growing 25% against sterling since autumn 2006, The Sunday Tribune writes this should be reflected in huge price cuts across goods sourced in the UK. However price cuts have instead allegedly "been meagre and in some cases do not exist." The paper asked the Central Statistics Office (CSO) to analyse 55 categories of foodstuffs, and found the 2.4% rise since autumn 2006 in all foods masks huge price increases in specific foods. Bread and cereals together, for example, have risen 8.3%.
The Co Wexford recycling company at the centre of the animal feed contamination scare which forced an Irish pork recall, is suing its oil supplier. According to The Irish Times, Millstream Recycling Ltd is itself being sued for €32 million by various parties for supplying animal feed containing harmful dioxins. It will now pursue Gerard Tierney and Newtown Lodge Ltd for €36 million to cover its own €4 million losses plus the €32 million claims – on the grounds that the firm is unlicensed to deal in mineral oil and supplied recycled 40-year-old fuel which caused contamination.
Prof Ivan Perry of UCC has claimed some food products specifically targeted at children contain such junk that we would "not feed them to animals in captivity". The Irish Times reports that Prof Perry claimed at a conference on obesity in Sligo last weekend, that a huge proportion of foodstuffs on the supermarket shelves were high in fat, sugar and salt and "not meeting any need in terms of nutrition".
Irish food group Total Produce has bought UK-based exotic fruit importer Utopia from its administrator. The Irish Times reveals that the fruit, vegetable and flower distributor, which was spun out from Fyffes in 2006, will call its new business Total Exotics. Utopia which is an importer and supplier of 60 exotic and tropical products from 40 countries, is set to add sales in excess of £25 million (€27.5 million) to Total Produce’s turnover.
Drinks group C&C witnessed its shares jump 9% to €2.80 earlier this week, following the news it had purchased the cider assets of UK company Constellation Brands for £45m (€49m). The Irish Independent reports the deal also included the purchase of a cider production facility based in Somerset and a distribution warehouse in Bristol, and is set to almost treble C&C’s output of cider. Newly acquired cider brands include Blackthorn, Olde English and Gaymers.
Meanwhile, with cider sales in Ireland down 5.5% in the past year, the chairman of the Irish Cider Association (ICA), Aidan Murphy, has also called on the Government to cut taxes in next week’s Budget to protect jobs. In a press statement published on Fxcentre.com, Murphy said that despite cider being a major domestic success story in recent years, with 86% of cider consumed in Ireland being manufactured here, that it had nevertheless declined dramatically over the last 18 months.
US chocolate giant Hershey has lined up more than £4 billion in financing to launch a bid for Dairy Milk maker Cadbury, The Irish Independent reported this week. Loans from JP Morgan and Bank of America have allegedly already been lined up to fund to fund a £10.3 billion offer for the British confectioner – which would spark a full-blown bid battle against Kraft’s previous offer of £9.8 billion.
Hundreds of rural petrol stations in the UK could be put out of business by substantial hikes in business rates coming into force next April, a retailers group has claimed. The Irish Independent reports that the RMI Independent Petrol Retailers Association (RMI Petrol) is planning to fight against proposed rate increases, which it claims are up 200% in some cases.
The Irish Times takes a look at the demise of the commercial property market over the past year. The paper reports that the newly completed €120m Ferrybank shopping centre in Kilkenny remains "mysteriously vacant." While Dunnes is contracted as the anchor tenant at the 6,968 sq m (75,000 sq ft) scheme owned by Deerland Construction Ltd, the Irish multiple has yet to give any indication that it intends to move in.
The midland counties have shown the sharpest decline in VAT returns, even more so than border counties, local paper The Offaly Express reports. According to Donegal North-East Fine Gael TD Joe McHugh, while there was a national fall of 10% in VAT last year compared to 2007, Westmeath had the worst drop, at 19%, This was followed by Longford at 17%, while Offaly and Carlow were both at 14%. Meanwhile returns in Louth and Monaghan were down by 13%, and Donegal and Cavan only 9%.
Almost three-quarters (73%) of Irish consumers will spend the same or more on Christmas gifts this year compared to previous years, a study conducted by the Rikon Research Group on behalf of AllGifts.ie, has discovered. Business World reports 63% of those surveyed also indicated they will wait until December to do their Christmas shopping, while gourmet food hampers were found to be the seventh most popular Christmas gift.