In the papers this week 6 – 12 March 2010

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Ahern rejects 'repackaged' Labour Bill on rent reviews; Code for grocery sector on way; Self-regulation of alcohol sales is working, says Ahern



12 March 2010

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Minister for Justice Dermot Ahern has rejected a Labour Party Bill containing emergency measures that would allow the Government to prohibit the application of “upward only” rent review clauses. The Minister said he could not accept the “repackaged” Land and Conveyancing Law Reform (Review of Rent in Certain Cases) (Amendment) Bill, “They are a repackaged version of a Bill introduced by the Labour Party last year, which was acknowledged by Government and by Fine Gael as being legally flawed.” He added: “We cannot accept proposals that are half-baked. They have to be duly sound. We have looked at this issue high up and low down.”

However, the Sunday Business Post reported at the start of the week, that retailers were stepping up pressure on the government to introduce a retrospective ban on upward-only rent reviews as a growing number of shops face closure. Dozens of leading retailers started an e-mail campaign to politicians last week, expressing support for a Labour Party private member’s bill which would permit downward reviews of commercial rents on existing leases. The paper also states Retail Excellence Ireland (REI) had engaged lawyers to put together a case to support its position that existing upward-only rent reviews can be banned – which it planned to put to Minister for Justice, Dermot Ahern.

An independent “eminent” person has been asked to finalise a voluntary code of practice for the grocery goods sector, according to Tánaiste Mary Coughlan. The Irish Times reports Ms Coughlan told the Dáil this week that a statutory code would be put in place if necessary to merge the Competition Authority and the National Consumer Agency.

An Tanaiste, was responding to claims by Labour enterprise spokesman Willie Penrose who said suppliers were being bullied by major supermarket retailers. He also condemned the Competition Authority as a “failure” and a “waste of space” in the grocery area because it was waiting for evidence to be brought to it, on such demands for “pay to play” money. What’s more, he insisted that “voluntary codes mean nothing to the retailers concerned”

Self-regulation by retailers of their alcohol sales is working
, according to Minister for Justice Dermot Ahern. The proof of the pudding, he said, was that more than 90% of shops surveyed by Responsible Retailers of Alcohol in Ireland were found to be in compliance with the code. The Irish Times reports that the Minister intends to make non-compliance by shop-owners with the code a statutory ground on which objections may be made to the renewal of an outlet’s licence to sell alcohol.

Musgrave recently radically restructured the defined benefit scheme it has had in place for its staff since the 1960s, reports The Irish Independent. While staff originally made no contributions to the scheme, about five years ago employees started paying 6% of salary into the scheme and the retirement benefits were scaled back. And following changes in pension legislation last year, the scheme is now fully funded, with staff receiving one-sixtieth of final salary for each year of service.

Some of Tesco’s so-called ‘great value packs’ do not represent such a strong value proposition afterall, according to The Irish Times’ Pricewatch column. An eagle-eyed reader reported that in Tesco Arcane a ‘great value’ two pack of 330g O’Hara’s Madeira cakes sells for €4 whereas a 350g single pack costs just €1.99. What’s more a 450g pack of Kellogg’s Rice Krispies, costs €2.50, which actually represents better value than buying the larger 600g box at a cost of €3.75

Food group Greencore has reported that consumer sales in the first half of the year have started to pick up. Following the announcement that the group’s shareholders had approved the sale of its malting business to Axereal Union De Cooperatives Agricoles, for €116.25 million; Greencore’s President revealed sales of €217.2m were achieved in 2009, while operating profits of more than €20m were returned. Yet the Irish Examiner reports fears are mounting that the French group will close the company’s malt division based in Athy, Co Kildare, and import its Irish malt requirements at cheaper prices from Europe and elsewhere.

The Irish Farmers Association has subsequently protested against Greencore’s plans to sell its malting business to French co-op Axereal. IFA president John Bryan said Greencore cannot axe contracts for 500 growers without redress before they sell off the business. The Irish Examiner reports the association has called on the convenience food group to address the issue immediately if new owners Axereal “are to be welcomed here and enjoy the goodwill and support of Irish farmers." However Greencore rejected claims growers had been treated disrespectfully.

Food conglomerate Glanbia has confirmed it is in talks to sell its Irish dairy operations. The Irish Times writes that the company issued a statement outlining that pre-tax profit fell 19% to €97.4 million in the year ended January 2nd, 2010. Meanwhile revenue slipped 18% to €1.8 billion over the same period. However, the company described these results as “solid” and in line with market expectations. Shareholder Glanbia Co-operative Society, which owns 54.64% of Glanbia, has also expressed an interest in acquiring Glanbia’s Dairy Ireland operations, its Irish property business, Group Business Services and related Irish joint ventures and associates.

Holidaymakers returning from trips to Europe can effectively bring back as much alcohol and cigarettes as they like, Revenue chiefs have admitted to The Irish Independent. Josephine Feehily, head of the Revenue Commissioners, said it would be extremely difficult to prove in court that cigarettes had not been brought to Ireland for an individual’s use. She added that the indicative guideline limit of 800 cigarettes was only an indication of personal use. "So people can bring in many, many thousands, legally, legitimately into the country for their own use, " she noted.

Superquinn founder Feargal Quinn stars in a new show on RTE 1,  ‘Feargal Quinn’s Retail Therapy’ on Tuesdays at 8.30pm. The Irish Times profiles the “cheerful grandfather  who is also one of the most successful businessmen Ireland has ever seen” in the wake of his new series. Much like Mary, Queen of Shops – Mary Portas’s critically acclaimed series for Channel 4 – a struggling retailer is taken in hand as they attempt to turn things around in the face of competition from large multiples, cross-border shopping and the absence of credit.

Green Party TD Ciarán Cuff is opposing a plan to create a new “district centre” on the same scale as Blackrock at Carrickmines in south Co Dublin. According to Cuff, supporters of the project “appear to have learnt nothing from the planning problems of the past 30 years and councillors are still trying to rezone even more greenfield sites.” However The Irish Times reports that his argument was countered by Fine Gael member of Dún Laoghaire-Rathdown County Council Jim O’Leary, who said blocking the plan “will cost Dún Laoghaire 800 full-time jobs, 700 construction jobs and 1,500 support/part-time jobs”.

Kerry Group’s initial offer of close to €23m for the acquisition of Newmarket Co-op has been rejected, reports The Irish Independent. If Kerry was to acquire Newmarket Co-op, it would get a state-of-the-art cheese processing plant, as well as specialised cheese-making expertise. This would prove a considerable boon for the company, as while Kerry is considered a major player in the retail cheese market, it does not have a cheese plant in Ireland. When Kerry acquired Breeo Foods from Reox Holdings (Dairygold) in 2009, it added the Mitchelstown and Calvita brands to its existing stable of Cheesestrings, Low Low, Charleville and EasiSingles. Charleville cheese is the biggest cheese brand in Ireland.



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