Oireachtas Joint and Select Committees

Tuesday, 5 November 2019

Joint Oireachtas Committee on Agriculture, Food and the Marine

Unfair Trading Practices: Discussion

Ms Christine Tacon:

To clarify, the remit covers anybody who is a direct supplier to a retailer. There are some very large primary producers in the UK, particularly horticultural producers of strawberries, lettuce or potatoes, that are the primary producers supplying the retailer. There are a fair number of primary producers that are included, but clearly beef and dairy are not. There are a lot of primary producers in horticulture that are covered, and I see and hear from them quite a lot.

The code actually provides that a supplier must not be required to predominantly fund a promotion. Nobody has ever spoken to me about that because promotional programmes are mostly determined at the beginning of the year. Although a supplier may predominantly fund a promotion during the promotional period, that supplier will have agreed at the beginning of the year to supply a retailer this year, during which time one promotion of this type of and two promotions of that type will be run. It has been agreed at the beginning. I get involved if the retailer starts to ask for further or deeper promotions than have been agreed at the outset. That generally comes under the rubric of variations to agreement. Generally I have said to suppliers that if they do not want to do those things they should push back against retailers. They can decline to vary an agreement. However, if sales have not been hitting targets it is probably as much in the suppliers' interest as those of the retailers to work with them. The issue of who predominantly funds a promotion has not been raised, but the practice of varying the agreement and trying to change what was already agreed at the beginning of the year has come up on quite a few occasions.

For hello money, which I would refer to as "listing fees", to be charged a product has to have been in less than 25% of stores within the last 365 days.

It therefore really has to be a new product, but it is very clear in the code that it must represent the risk to the retailer in stopping that promotion. I have held retailers to account in cases in which they have tried to charge for the cost of putting this product on display in every one of their stores. I have asked them to tell me how that is code-compliant as it is very clearly without the risk to them. Where I have heard about listing fees I have generally said the businesses involved must demonstrate that such fees are a proper representation of the risk to the business in taking them on. On the whole, listing fees have tended to disappear or go very much lower. They have not been raised as an issue for quite a long time. I think 12% of people who have not raised this with me have raised it as an issue in the survey. I hear things about both these issues and I have been tackling them as they come along. My role came from the Competition and Markets Authority - or the Competition Commission, as it was then - trying to ensure that so much risk was not being passed by the retailer to the supplier that small suppliers went out of business, large businesses stopped innovating and there was then less consumer choice. However, all the Competition Commission did was give me the tools of the code and the designated retailers, so I do not get involved beyond overseeing that those designated retailers adhere to the code. I do not go and check that consumers are getting choice and so on. That is still very much the remit of the Competition and Markets Authority.

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