Rip off Ireland debate rages once again
Fionnuala Carolan examines how a lack of transparency by Ireland's major supermarkets is fanning the flames of the 'Rip off Republic' debate
Print13 July 2010
A Eurostat Survey about European Food Prices caused an awful furore this month when it was revealed that food prices in Ireland were 29% higher than the EU average. Retail Ireland director Torlach Denihan claimed that the survey was out of date as food prices had fallen by over 6% in Ireland over the past two years.
However Irish consumers are now so price sensitive that a survey like this triggers much debate on the reasons for the disparities in food prices across Europe. Everyone wants to get to the bottom of why we are so expensive. The most obvious reason is that the cost of doing business in Ireland is expensive. A 2008 Forfas survey has proved that it’s actually 25% dearer to do business in Dublin than Belfast. This is due to issues like the upward only rent review clause, commercial property rates, refuse costs, energy costs and of course wage costs. When all these come together it means that a retailer needs to charge a little more for the goods to make a margin.
A valid point made by Paul Kelly, director of Food and Drink Industry Ireland in reaction to this issue was that the figures are also a little misleading as we are being surveyed against all of the Eastern European countries where they only earn a fraction of the wages we earn here.
Retailers often complain about the huge amount of time spent with dealing with bureaucracy. John Foy, president of RGDATA, said that between all the licenses, forms, inspections and health and safety procedures he needs to employ an extra staff member to undertake these tasks. It’s not a popular choice to defend the cost of food in Ireland but there are reasons for it. It’s also important to take into account the quality of our stores. Our retail sector is extremely advanced if you consider the level of design, the convenient locations, long opening hours and the high quality of the food. In most c-stores you can purchase hot food from early morning to late at night and many retailers are employing qualified chefs in order to ensure the quality of the food is top notch.
Yet the lack of transparency by the retailers has not helped. The farmers claim to be struggling and have released figures on what prices they receive for their commodities. The producers and the suppliers say they are being constantly squeezed on prices so the finger of blame will of course land on the heads of retailers. Considering Tesco incorporate its Irish accounts in with its English ones means we can’t review its profits. The same applies to Dunnes stores who never publish its results. Labour leader, Eamon Gilmore, has succeeded in convincing the Government to re-examine legal loopholes that allow major retailers to keep their accounts secret. If the laws are changed and they are forced to reveal end of year accounts, there will be finally be complete accountability in the food supply chain.
Gillian Hamill’s feature (page 17) on independent retailers is a nice reminder that there are some truly inspirational people working in the retail industry and while all around them conform to one model, they are winning business due to their points of difference.
And finally our GRAMs winners are featured this month. The judges of the competition said that the entrants were of an extremely high standard this year. You can read all about the successful candidates on page 20.
Fionnuala Carolan
Editor
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