Ms Tara Buckley:

I will briefly talk through the four issues we were asked to address. The first concerns the proposed code of conduct for the grocery goods sector. RGDATA is supportive of a statutory code of conduct for the grocery goods sector and rejects the contention by some of the larger retailers operating in Ireland that no code can be introduced to the retail grocery sector in Ireland before any EU wide initiatives. This is an open market that has seen significant penetration from international retailers in recent years and we believe there is no legal or practical reason a code should not be introduced to specifically govern relations between international retailers and Irish-based suppliers with regard to the supply of grocery goods for sale in the Irish market. We note the United Kingdom has appointed an adjudicator of its grocery code. We could examine that model here.

The relationship between suppliers and the large multiples in Ireland is unbalanced and there is a need for some independent, enforceable code around which sustainable, respectful and commercial relations can be built. In a sector where the largest players impose unreasonable and unfair terms on suppliers, all too often the suppliers seek to recoup the losses or the cost of promotions by changing the terms of those least able to resist change. This is one of our issues of contention. Many of our smaller members are paying the cost for some of the ways the larger players in the market operate. This has perverse consequences, with the independent sector effectively subsidising or indirectly funding unreasonable terms of supply extracted by the largest multiples. This is not sustainable. We would like to clarify that independent, family-owned shops do not engage in practices such as demanding hello money, shelf space payments, promotional budgets or other ad hoc payments from suppliers. However, the large players in the market do engage in these practices.

We are also aware that larger suppliers have behaved unreasonably towards independent retailers and smaller players. This includes larger suppliers that have delisted independent retailers or issued legal threats to shopkeepers who have sought to source identical products from other markets in circumstances where they can be secured on more favourable terms. In a number of instances, retailers have been delisted by suppliers as a mechanism to ensure they purchase the entire stock of a branded product from a supplier or distributor, rather than sourcing the product on more advantageous terms from third parties. This has a knock-on impact on the price offering that independent retailers can provide to customers for certain branded products.

Five objectives should be adhered to regarding any regulatory or legislative measure that touches on the relationships between suppliers, distributors and retailers in the retail grocery trade. The regulatory system should be effective, responsive and respected. The regulatory structure should attack practices that should be illegal and that distort the competitive landscape for retailing food in Ireland. It should ensure an indigenous Irish supply base is maintained and encouraged and not subject to the ad hoc vagaries of large retail concerns. Any code of practice should facilitate retailers that are independent of the multiple chains to compete on a fair and equal basis with larger retail competitors. The independent sector should not have to carry the can for excesses practised by large multiples in their trading relationships with suppliers or wholesalers. A code of practice should prevent discriminatory practices by brand holders that are large monopoly or duopoly suppliers and that prevent independent retailers from getting goods on competitive terms for their customers.

The committee asked us to address the impact of pricing on primary and secondary suppliers. Members of the committee are aware that significant price pressure is put on primary and secondary suppliers by the large multiples which try to justify this by claiming they are doing it in the interests of consumers. They fly themselves as the consumer champion to excuse what could be unacceptable behaviour. The problem with all the major retail multiples operating in Ireland is caused by the veil of secrecy under which they operate. We strongly advocate the committee pursues the issue as a matter of importance. The large multiple retailers go to inordinate lengths to conceal details of turnover and profits generated by their activities in Ireland. They have a complex web of unlimited companies, subsidiaries of foreign-based companies and other structures designed to conceal financial information about their activities. This should be addressed and we should seek to lift the veil and make them reveal their profits and turnover in Ireland. Successive Governments have failed to tackle the issue and, in the public interest, learning about the profitability of these companies should outweigh the desire to keep these operations secret. Until we have visibility on the level of profits generated by major retailers operating in the Irish market, the committee, producers, retailers and ultimately consumers will be in the dark about whether the efforts of retailers to squeeze suppliers is genuinely in consumers' interests or more concerned with squeezing higher profits.

The committee also asked about support for local producers. The independent retail grocery sector in Ireland is the biggest supporter of local Irish producers. Significant efforts are made by the independent retail sector to source goods from new and emerging producers to give them a foothold in the market. It makes sense, as a local retailer based within the community will always try to source locally made products from the community if the price and quality are at least comparable with imported products. They will also support local producers where the quality is clearly higher than imported products even if the price is higher. International retailers operating in Ireland go to great lengths to highlight their commitment to Irish producers and suppliers. Independent retailers are the biggest supporters of local Irish suppliers but we do not have the resources of the global giants to make the same song and dance about it.

We want to highlight one key difference. When consumers purchase Irish goods in an Irish-owned shop, they are making a far more significant contribution to their local economy. The key difference is that they are supporting the independent retail grocery sector and local suppliers. When they spend the money in our members' shops it is worth four times more to the local community than when they spend that money on Irish goods in a global retailer. A study done by Jim Power shows that €100 spent in the locally-owned shop is worth €250 to the local economy. This is significant for local economies when we need to be investing in our local communities. Supporting local shops that support local suppliers provides the optimum benefit for Irish consumers and society in general.

Food labelling is a significant issue and an area of contention for RGDATA members and their customers. Irish people like to buy Irish sourced and supplied foodstuffs. Sadly, the labelling regulations have facilitated the creation of confusion for consumers as to whether the food they are buying is actually sourced from Irish ingredients and produced in Ireland. We are constantly informed the Government has limited options to change the way food is labelled given EU regulations but we believe that, with a bit of imagination, the Department of Agriculture, Food and the Marine could support the creation of some mark that helps to provide consumers with clear information about the source of genuinely Irish produced foodstuffs. We acknowledge the good work done by Bord Bia, Guaranteed Irish, Love Irish Food and Think Irish but it must be a priority that any Irish consumer genuinely seeking to buy Irish produced food should not be misled by clever labelling tactics on the part of some producers. It is also critical that existing penalties for mislabelling of foodstuffs are reviewed to ensure the deterrents that exist for negligently or wrongfully describing food are sufficiently severe to act as a deterrent. However, we also appeal to the committee to ensure the responsibility for mislabelling should be directed at the source of the problem and not visited on the independent retailer.

The independent retail grocery sector is a strong supporter of the Irish food industry. We may not be able to afford the big advertising fanfare or the glossy newspaper inserts but RGDATA, the Retail Grocery Dairy and Allied Trades Association, members are dedicated to Irish food and demonstrate this daily in their shops. We support a regulatory environment for the supply and sale of food to consumers that will assist independent retailers to be competitive and sustainable. Lifting the veil on the profits made by the largest players in the market will provide much-needed transparency and will allow suppliers, the Government and consumers to test claims by large retailers that their actions in squeezing suppliers and producers are always driven by a constant focus on the well-being and betterment of consumers.