Drinks group dismisses Grocery Order savings

The Beverage Council of Ireland (BCI) has dismissed claims by the Competition Authority that the removal of the Groceries Order…

The Beverage Council of Ireland (BCI) has dismissed claims by the Competition Authority that the removal of the Groceries Order would result in a saving of €500 per year for every Irish household.

The drinks body also said warned the removal of the ban on below cost selling could lead to a "free for all" in the off-licence trade.

According to the Competition Authority, getting rid of the Groceries Order would result in a total saving to all households of €577 million. However, the BCI's executive director, Bernard Murphy,  said that such a saving would mean that a corresponding cost of a similar amount would be borne elsewhere.

"Does John Fingleton and the Competition Authority seriously believe, for example, that a supermarket group, controlling 20 per cent or 25 per cent of the Irish grocery market is going to forego €125 million to €145 million from its current margins and hand it over to consumers?" he asked.

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"Somebody has got to pay. If there is a benefit then there will be a corresponding cost."

The BCI also warned that a further side-effect of dumping the Groceries Order could be the emergence of drink promotions in the off-licence sector, which are now banned in pubs.

"At present, price promotions such as 'Happy Hours' are banned in the on-trade, but a removal of the ban on below cost selling would result in a free-for-all promotional situation in the off-licence trade," said Mr Murphy.

Business lobby group Ibec and the Irish Congress of Trade Unions (Ictu) have come out in support of the order. The State's anti-poverty charities have also warned that repealing it would put families on low incomes at greater risk of food poverty. According to the charities, removing the ban on below-cost selling would force small independent retailers out of business, which many low-income families rely on for grocery shopping.

Ciara O'Brien

Ciara O'Brien

Ciara O'Brien is an Irish Times business and technology journalist