VFI welcomes CAI report on supermarket prices

“Hard-pressed shoppers are being conned by the big supermarkets that are luring them in with the promise of cheap alcohol” – VFI President Gerry Rafter.
“Hard-pressed shoppers are being conned by the big supermarkets that are luring them in with the promise of cheap alcohol” – VFI President Gerry Rafter.

The Vintners Federation of Ireland has welcomed this week’s report in Consumer Choice, the magazine of the Consumers’ Association of Ireland, on price hikes and perceived price matching by the country’s biggest supermarkets.



13 February 2013

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The report showed the price for a basket of goods up 12% when compared to June 2011 or €870 per annum per household. It backs-up VFI claims over the past number of years that the practice of selling cheap alcohol is anything but consumer-friendly as the increases are necessary to cover supermarkets selling alcohol at unsustainable loss-leading prices.

“We have been watching the supermarkets closely and it’s obvious that they’ve been increasing the price of everyday household goods by stealth and there are strong indications of widespread price matching,” claimed VFI President Gerry Raftery, “Bread, milk, butter, sugar and other prices have increased by up to 15-20% in some cases over the last 18 months. We’re convinced this is to compensate supermarkets for selling alcohol below cost as a loss leader to get consumers in the doors in order to rip them off on other essential items. Supermarkets are selling alcohol below the cost publicans can buy it from wholesalers or manufacturers.

“What’s happening is totally irresponsible and a disgrace,” he continued, “Hard-pressed shoppers are being conned by the big supermarkets that are luring them in with the promise of cheap alcohol. Drink is being sold, promoted and marketed in a totally irresponsible manner in order to get customers to fork out hundreds of €uro extra each year on essential food items. This report proves beyond any doubt that cheap alcohol does not make the supermarkets consumer champions. Quite the contrary, as the CAI states, consumers are spending more money for a poorer return despite having less money to spend.”

However Retail Ireland, the IBEC group that represents the retail sector, has called the survey “nonsense” and pointed out that food inflation remains very low in Ireland as the price of food and non-alcoholic beverages has actually fallen since 2008 according to official CSO stats.

Retail Ireland Director Stephen Lynam commented, “There’s very modest inflation in the Irish economy. Official figures from the Central Statistics Office’s Consumer Price Index which surveys over 50,000 prices taken on 632 item headings shows that food and non-alcoholic beverage prices have fallen by 6.3% since 2008.

“The EU Harmonised Indices of Consumer Prices, which allow for international comparisons, shows that the price of food and non-alcoholic prices increased by only 0.6% last year, lower than any other country in the European Union. This 0.6% increase is compared to an EU average increase of 3.0% and increases of 3.2% in the UK.

Stephen Lynam told Drinks Industry Ireland, “This survey is nonsense. The CSO surveys hundreds of goods every month and they show, without a shadow of a doubt, that food and drink prices are down in recent years.

“The ‘survey’ only examined 19 items out a typical basket of many more items and excludes discounters, independents and every other store than four stores referred to,” he added, “It also completely ignored ‘own-brand’ products which make up such a large share of grocery spend.

“Further, it’s rubbish to suggest that so-called ‘price matching’ is an example of an uncompetitive market – when retailer A drops their prices, retailer B, C and D must do otherwise. If they don’t, they go out of business.”



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