Oireachtas Joint and Select Committees

Tuesday, 26 March 2013

Joint Oireachtas Committee on Agriculture, Food and the Marine

Groceries Sector: Discussion with Musgrave Group and Tesco

5:00 pm

Photo of Pat DeeringPat Deering (Carlow-Kilkenny, Fine Gael) | Oireachtas source

I welcome the deputation from Tesco. I seek more detail on Tesco's relationship with its suppliers. If I want to supply vegetables to Tesco tomorrow, how do I go about it? Do I need to pay money upfront? Do I need to get onto a list and if so will that cost me substantially? The presentation mentioned Food Harvest 2020, which is a very ambitious plan to improve our production over a number of years. If, as has been suggested in the past rightly or wrongly, suppliers have made substantial payments to get their products on Tesco's shelves, would that not have a detrimental effect on what money might be available to primary producers to develop their own systems in order to try to achieve the Food Harvest 2020 targets?

Deputy Pringle asked about the payment procedures to Tesco's suppliers. During the Superquinn crisis a number of years ago, some suppliers had not been paid for 120 days or more. There has been speculation that there may have been disputes involving some of Tesco's suppliers over a small portion of an invoice involving perhaps €100 leading to a delay in payment of a €100,000 invoice. I ask the witnesses to comment on the matter.

Groceries in Ireland cost on average 18% more than in our European competitors. Why is that the case? Does Tesco have any policies to try to reduce the price of groceries while at the same time maintaining quality, which is obviously crucial? Education should play an important part in that. Obviously Tesco is under no obligation to declare its own finances and so forth. On 3 November 2010 The Irish Times reported that Tesco made more profit in Ireland than in any other part of the globe, bar South Korea. That is a big statement and we are a small country. It would suggest that Ireland is being continually squeezed to Tesco's benefit. Even though there is no obligation to do so, from a transparency point of view would it not be appropriate for it to declare the profits it makes in this country?

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