Press conference: Minister for Enterprise Micheál Martin said yesterday that provisions in the Groceries Order were "absurd and unjustifiable", but he would not accept that the Government should have moved sooner to repeal it.
Speaking at a press conference in Dublin, Mr Martin said that the Bill to remove the order and strengthen the Competition Act would be ready "within months". He said he wanted the legislation passed "as quickly as we possibly can" within the lifetime of the Coalition.
Asked why the Government did not previously act to remove the Order since it came to office in 1997, Mr Martin said the issue was very contentious and that the structure of the retail market had changed fundamentally in recent times.
"This Government has been the first government in 50-odd years to fundamentally get rid of the Order.
"The Order has been there in different manifestations since the 50s and it depends what way you look at it. I would argue that the Government has taken a radical and fundamental decision in a unanimous manner."
While the Minister was confident that the strengthened legislation would guarantee fair competition in the grocery trade, he declined to predict the extent of savings that consumers would gain as a result of its repeal.
"I'm not speculating. I'm not going to make a prediction on that because I think there are many variables to prices. But what I am clear about is that the removal of the Order will remove an instrument that has artificially kept prices high."
Mr Martin said the Order helped ensure that Irish consumers paid higher prices for their groceries and said that consumers were prohibited from gaining any of the benefit from the off-invoice discounts that suppliers gave retailers.
"The evidence is overwhelming that the Order has not had the impact which it was designed to achieve or which is claimed for it.
"It has not brought fairer competition, it has not helped independent retailers and it has not prevented the concentration of the groceries trade."
He said that retailers could take advantage of their buying power by demanding off-invoice discounts from suppliers, but pointed out that the Order prevented retailers from passing the discounts on to their customers.
Off-invoice discounts were paid "in a secretive, arbitrary and discriminatory manner", he said. "By removing the Groceries Order we will remove the legislative authority for such practices."
He said the decision to revoke the Order was balanced and reasonable and promoted the interest of Irish consumers and fairer competition. Consumers were attracted to convenience stores simply because they were convenient, he said.
There was no evidence to suggest that truly independent grocers - who did not trade under convenience brands - were being protected from their competitors by the Order. "All the evidence points to the fact that they operate in a different market and are not competing directly with multiple outlets."
