AN OIREACHTAS committee which spent three years investigating the retail sector has said it never even discussed the issue of excessively high retail rents, despite admitting it was one of the biggest threats facing retailers and could ultimately cost tens of thousands of jobs.
At the launch of the final report of the current Oireachtas yesterday, chairman of the Oireachtas Committee on Enterprise, Trade and Innovation Willie Penrose accepted that the issue of upward-only rent reviews was a serious problem but claimed the committee had “run out of time” to discuss it.
He said intransigence among landlords who were charging excessively high rents was “causing serious problems for retailers and causing some of them to close” but he claimed that the committee had not discussed the issue formally because “we did not anticipate that the report would have to come out so quickly”.
He said the issue was legally complex and the election meant it had run out of time before it could properly examine the issue.
Fellow committee member Donie Cassidy agreed that it was “a major problem” facing retailers and said it could “decimate the entire industry”. He said the retail sector was “on its knees” and warned that tens of thousands of jobs were at risk.
Retail Excellence Ireland warned last week that the rules which prohibit leaseholders negotiating lower rents were artificially inflating prices and meant it would be impossible for many businesses to remain open.
It pleaded with any new government to take immediate steps to save the retail sector. The Labour Party has said it will abolish upward-only rent reviews should it form part of the next government.
Mr Penrose said the key recommendations among the nine contained in the final report included the creation of a statutory code of practice for the retail sector which would be monitored by an independent arbiter who would investigate complaints and prevent retailers passing excessive risks and unexpected costs to suppliers.
The report also calls for the current planning restrictions on retailers’ floor space to be kept.
Committee member and retiring TD Ned O’Keeffe warned that if hypermarkets were allowed to open on the outskirts of towns, “we will have no shops left in Irish towns. There is a real threat here.
“We have seen what can happen in Northern Ireland and when town centres die, they become ghettoes.”
Sinn Féin’s Arthur Morgan agreed and said British towns were “littered with town centres which had become wastelands and we can’t allow that to happen here”.
Mr Penrose said the report highlighted price differentials between the Republic and other jurisdictions. While many reasons had been given for the price differences, they could not be verified or substantiated “while the situation remains that Irish subsidiaries of multinational retail chains do not publish their Ireland-only accounts”.
He claimed this was a “difficult issue” which needed consultation at EU level and said this was why the committee had stopped short of calling for legislation which would force multinational retailers to be more upfront about their Irish profits.
The committee sat for more than three years and heard from most of the major players in Irish retailing. One retailer which did not appear before it was Dunnes Stores.
Mr Penrose said Dunnes, the second-largest retailer in the State, had “refused continuously over the last 10 years” to appear before any Oireachtas committee.
Mr O’Keeffe went a step further in his condemnation of the retailer and said that suppliers and producers who did business with Dunnes Stores “were afraid to give evidence before the committee in case they were delisted”.
