Small producers may be unwilling to complain of coerced payments, sometimes called “hello money”, because of “fear of retribution” from retailers, the chairwoman of the Competition Authority has said.
Speaking at the Joint Committee on Agriculture, Food and the Marine yesterday, Isolde Goggin said the authority had received "few substantive complaints" since the Competition (Amendment) Act 2006 was introduced.
The Act prohibits retailers from coercing payments from suppliers for the advertising or displaying of goods or compelling them to pay for providing space for grocery goods at a new outlet, often called “hello money”, but only if they have an anti-competitive effect.
Ms Goggin said smaller producers may be afraid of retribution such as delisting, which involves removing the product from the retailer’s shelves. There was a tension between what people wanted to say to the authority in confidence, and what the authority could do about it. It needed evidence to go to court, she said.
'Compliance costs'
Ms Goggin also said that in a submission to the Department of Jobs, Enterprise and Innovation, the authority had warned a proposed new Code of Practice for Grocery Goods Undertakings could impose "significant compliance costs" on businesses which were "likely to be passed on to consumers". She said there were difficulties enforcing such codes, and the authority had instead suggested the 2006 Act should be strengthened with added measures including that if the authority successfully took a case against a retailer, a supplier could get damages without having to prove the case all over again.
But, she said, if the code was introduced, the authority, which is to be amalgamated with the National Consumer Agency, would “diligently” police it.
Independent Senator Mary Ann O'Brien said listing fees were still around but retailers were using "a different language". And Deputy Pat Deering said he was aware of demands for "hello money".
Karen O’Leary, chief executive of the National Consumer Agency, told the committee the introduction of horsemeat into the food chain was driven by “greed in the supply chain”.
She said she did not accept the notion that consumers drove the scandal. Even in a market that does not have competition, there could still be fraud, she said.
Chairman of the committee Andrew Doyle said it had concluded its work on the proposed code of conduct for the grocery goods sector and would publish its report by the end of September.
