Madam, - The Groceries Order of 1987 introduced a semblance of order into the retail market for groceries. But now the Government has decided to abolish it.
The long-term social and environmental effects of this decision have not been addressed. With intense trading pressures there will be growing insolvencies among smaller suppliers as well as retailers.
Coinciding with Ireland's decision to introduce below-cost selling, the United Kingdom is considering a review of retail trading and a possible ban on below-cost selling as one supermarket Tesco exceeds a 30 per cent share of the market. Last week the Polish government stated that hypermarkets were not welcome because "they destroy city centres and drive out small shops".
It is understood that the Department's own internal report neither supports nor explains the claim by the Competition Authority that each household will save €500 a year, equal to €577 million nationally. This figure looks excessive: it would be equal to more than 10 per cent of the total expenditure of €5.6 billion on all food in 2004 and would exceed the industry's entire profits from retailing. But even if achieved, these savings would result in a once-off reduction of just 1 per cent in the overall rate of inflation.
And what else will we be left with? Towns and villages without traditional shops and even worse traffic jams to out-of-town shopping centres.
It was the Groceries Order that made the development of the symbol groups possible. These have been a great advantage to shoppers. We already have plenty of competition. We have the largest UK multiple without a dominant share of the market and we have growing low-cost, low-price European discounters, and the well developed European symbol groups and local convenience stores.
Why risk everything, especially on such flimsy grounds and with unseen hazards ahead including the implications for the domestic food industry?
This topic is contentious in other EU countries and should have been the subject of a Government Green Paper, together with a report from a leading social economist, such as the ERSI. Is it too much to hope that some explanation of the overall rationale for this important decision will be included with the forthcoming enabling legislation?
We all need to know why we are now going back to the mayhem of the 1980s, how the promised legislation against predatory pricing will work in practice and why we are going against recent trends and thinking in Europe. - Yours, etc,
DAVID DILLON, Carysfort Avenue, Blackrock, Co Dublin.