Independent grocers are paying the price for sharp practices by large supermarket chains, the Oireachtas Committee on Agriculture was told yesterday.
RGdata, which represents independent, family-owned shops, said when suppliers were put under pressure by large supermarket chains, they often sought to recoup the losses from the smaller supermarkets.
The organisation’s director, Tara Buckley, said this had the “perverse consequence” of the independent sector effectively subsidising unreasonable terms of supply which were being extracted by the largest multiples.
‘Veil of secrecy’
Ms Buckley also criticised the “veil of secrecy” that surrounded overseas retailers operating here. “Each of the large multiple retailers operating here go to inordinate lengths to conceal details of the turnover and profit generated by their activities in Ireland.”
She said they used a complex web of unlimited companies, subsidiaries of foreign-based companies and other structures designed to conceal financial information about their activities.
“This is an issue that successive governments have failed to tackle, but the public interest in learning about the profitability of these large companies must outweigh the desire to keep the operations secret,” she said.
“Until we have visibility on the level of profits generated by major retailers operating in the Irish market, this committee, producers, retailers and ultimately consumers will be in the dark about whether the efforts of retailers to squeeze suppliers is genuinely in the consumers’ interests, or more concerned with squeezing higher profits.”
She said RGdata had consistently supported the introduction of a statutory code of conduct for the grocery goods sector. “It is a fact that the relationship between suppliers and the large multiples in Ireland is unbalanced and there is a need for some independent and enforceable code around which sustainable, respectful, but commercial relations can be built.”
Ms Buckley stressed that independent, family-owned shops did not engage in practices such as demanding hello money, shelf space payments, promotional budgets or other ad hoc payments from suppliers. “However, we are very aware that the large players in the market do engage in these practices.”
Unnecessary hurdle
Frank Gleeson of Retail Ireland, which represents Irish and international supermarket groups as well as other retailers, said a code of practice would add “an unnecessary regulatory and cost hurdle that would ultimately be borne by the consumers and retailers”. The only people to benefit would be suppliers and distributors in the middle of the supply chain, “not the consumers at one end or the farmers at the other”.
Independent TD Michael Healy-Rae, who described himself as “a small shopkeeper”, said large chains were credited with creating jobs when they moved into an area “but what about the 150 jobs that they knock out?”
