Why won’t Bruton budge?

ShelfLife publisher, John McDonald
ShelfLife publisher, John McDonald

John McDonald asks why the government is dragging its heels in introducing a long-overdue grocery code of conduct.



15 March 2013

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Where is the long awaited and much needed "Code of Practice for Grocery Goods Undertakings"? Why has it not been finalised and adopted? What has dampened the enthusiasm within Minister Bruton’s department to bring this long "almost ready" piece of work over the line?

The objective of the code is to "foster and promote a sustainable and efficient grocery supply chain in Ireland to the benefit of consumers and the wider economy". Is this suddenly no longer important to the Minister, or are there forces at play that are holding the government back from doing what is clearly in the interests of the consumer, the Irish producers and the retail sector?

There has been much talk but no action by Minister Bruton. The current government has celebrated two years in power, and despite the grocery code of practice being on the agenda and with a clear commitment in the Programme for Government for a code, developments for implementation have clearly stalled.

How much of an impact will it have on suppliers, local entrepreneurial retailers and the wealthy multiples? It is interesting that the Competition Authority, back in September 2011, put its finger clearly on the key issue. It pointed to the elephant in the room and said: "One of the main reasons for the lack of complaints under such codes and unfair trading laws – including complaints to the Competition Authority – is that suppliers are reluctant to bring actions or make complaints out of fear of being delisted by retailers in retaliation".

The Competition Authority doesn’t mean that small individual retailers or groups are coercing suppliers into giving discounts or making payments that do not make commercial sense. It is pointing the finger clearly and decisively at the international multiples and the very large players in the market. What we should be asking is, is this small group of wealthy companies holding the Department of Jobs, Enterprise and Innovation to ransom?

In this edition of ShelfLife, Damien Carolan, head buyer for nearly 30 years at Superquinn, bemoans what he sees is a lack of skills among the current buying community. Carolan’s view is that any initiative that brings in additional revenue to the retailer from the supplier network is to be welcomed. Buyers are surely impressed with a UK multiple’s initiative, the so-called "Project COIN". It stands for "commercial income" and has quickly become a serious management agenda item as the giant company looks for bottom-line improving payments from the supply chain in the run up to its year end. 

Some of the questions to be asked, as practices of this nature are embedded into the culture of the Irish grocery industry, are who will the first Irish casualty be, under what circumstances is this money being collected and accounted for and where exactly should the line be drawn?

Maybe the key block to the code is that Minister Bruton is personally not committed to it and actually believes that the market should regulate itself. In opposition he showed a commitment to the free market and is an advocate of bigger is better. He was a cheerleader for the multiples on the abolition of the Groceries Order and as an economist by background is completely committed to laissez faire economics – the markets should regulate themselves without any interference by government. So perhaps it is time to call on Minister Simon Coveney to take up this fight instead given that Minister Bruton has shown that it is not a priority for him during his tenure?

On behalf of the grocery trade, we call on the government to act and bring forward the "Code of Practice for Grocery Goods Undertakings" and put an end to unfair practices sooner rather than later.

John McDonald,
ShelfLife publisher



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