The Government is preparing to strengthen the powers of the Competition Authority to police the retail sector as part of a package of measures to revoke the Groceries Order.
Minister for Enterprise, Trade and Employment Micheál Martin has asked the Attorney General, Rory Brady SC, to examine whether the authority can be given new powers to impose heavy fines on retailers found to engage in predatory pricing and persistent below-cost selling.
Such activities typically involve retailers sustaining uneconomic losses for as long as it takes to drive a rival from business. They then increase prices.
Mr Martin has been advised by officials in his Department to revoke the Groceries Order, which prohibits the below-cost selling of packaged goods. He is preparing to seek Cabinet approval for such a move within the next fortnight.
The officials found in their review that the order was anti-competitive and a "disproportionate response to the threat of predatory pricing". They also dismissed the argument that its removal would enable the biggest supermarkets to put small grocers out of business, creating urban "ghost towns" in which there was no retail activity.
By giving increased powers to the Competition Authority, Mr Martin would be able to say he is acting to defend the interests of small grocers where bigger operators threaten their viability with extreme price measures.
Mr Brady's examination of the authority's powers centres on the parts of the 2002 Competition Act that deal with anti-competitive agreements, decisions and concerted practices, and abuse of dominant position in a market.
The authority might also be given new enforcement powers to penalise retailers that ask suppliers for an illegal upfront payment known as "hello money" as a condition of doing business.
The Government's examination of the order follows detailed scrutiny of the rise in retail prices by the Consumer Strategy Group, which called for its removal. The Competition Authority followed that study with a report that said the measure was costing households almost €500 a year in forgone savings.
The interim National Consumer Agency, appointed by Mr Martin to defend consumer interests, claimed later that three-quarters of all goods in a typical shopping basket may be more expensive as a result of the order.
Those resisting moves to revoke the order include the big business lobby Ibec, the small grocer lobby RGDATA, and the Irish Congress of Trade Unions.
