Mr. Arnold Dillon:

Retail Ireland thanks the committee for the opportunity to present the views of retailers as part of the pre-legislative scrutiny process of the general scheme of the agricultural and food supply chain Bill 2022. Retail Ireland is the representative body for the entire retail sector in Ireland. Our members include Ireland’s main retail brands, including a wide range of grocery retailers, department stores, DIY, electrical retailers, clothing and fashion retailers, symbol groups, forecourts, and independent stores.

Retail is Ireland's largest private sector employer, with a presence in every city, town and village across the country. The sector directly employs over 300,000 people and supports many thousands more jobs throughout the supply chain, often in small, family run businesses. Unlike many other sectors, retail jobs are evenly spread across the country. In every region, it is either the largest or second largest employer, with its share of employment typically ranging from 12% to 15.5%. However, the positive impact of retail goes far beyond the economic benefits of the jobs it creates. Retail plays a crucial role in developing its people and improving the local communities in which it operates. It contributes to the vibrancy and prosperity of localities, and plays a major role in supporting sport clubs, community groups and charities. The grocery sector supports a vibrant and dynamic food supply chain and works with its suppliers to sustain hundreds of thousands of jobs, and provide quality, choice, and value to Irish consumers.

There is a long history of Irish law to ensure fairness in how the supply chain operates. In recent years, retailers worked closely with the Competition and Consumer Protection Commission and their suppliers to embed the grocery goods regulations introduced in 2016. More recently again, we have actively worked with the interim Unfair Trading Practice Enforcement Authority to ensure members are fully aware of their obligations under the recently introduced regulations. This has involved various briefing sessions with the enforcement authority and the provision of training on unfair trading practice, UTP, rules, in addition to the direct engagement that individual companies have with the authority. As such, retailers have done extensive work to comply with the UTP rules and prepare for the introduction of this legislation. This includes large retailers, but also many smaller grocery retailers, that are subject to the rules due to the relatively low turnover threshold.

Retail Ireland and its members recognise and appreciate the need to ensure fairness and sustainability in the agrifood supply chain. It is also important to note, particularly given the context of rising inflation and increases to the cost of living, that robust competition throughout the food supply chain is vital in delivering value for money, choice and quality to Irish consumers. Working with partners across the supply chain, the retail sector has demonstrated its ability to do this over the last decade. It is crucial that nothing is done to undermine its ability to do the same over the course of the next ten years.

Our submission sets out some specific observations regarding the legislation currently under consideration. These include a range of issues, first among which is the collection of market information. Recently, Retail Ireland has engaged with the Department of Agriculture, Food and the Marine over separate EU market transparency requirements to report on the price paid for mince and butter. In particular, to overcome issues around the sharing and management of market sensitive data and the need to ensure the collection of comparable information from different market participants. It is important that the new office for fairness and transparency engages with the retail sector on these issues into the future.

The second issue is the balance on the board. To represent all parts of the supply chain fairly and ensure balance, it is important that the board of the new office has experienced representatives from a diverse range of backgrounds. We suggest that a representative of the retail sector should constitute at least one of the ordinary members of the board. It is also important that the voice of the consumer is represented. There is strong precedent for this proposal in other State-appointed boards. In addition, to ensure balance, we would suggest that a quorum should need to include at least one independent member. In other words, the chairperson and two primary producers should not constitute a quorum.

The third issue is the turnover threshold. The purpose of the UTPs and the associated enforcement authorities is to afford greater protections to smaller suppliers and primary producers, not larger multinational corporations that have significant bargaining power in the market. As such, we believe there is no justification to increase the qualifying supplier turnover thresholds beyond the current €350 million level.

The fourth issue is the definition of grey and black UTPs and the prospect of future changes. It is important to note that the UTP rules are still relatively new having only come into force in April of last year and, as highlighted in the research presented to the UTP seminar hosted by the Department of Agriculture, Food and the Marine on 5 April, awareness of them is low. Only 50% of primary producers are aware of the existence of UTP rules and only 14% are familiar with the 16 UTPs. This rises to only 19% when all business-to-business suppliers are included in the results. Given this context, it is vital that current UTP obligations are afforded the necessary time to bed in and that this is done in a way that is not too onerous for smaller retail businesses with limited resources. If there is to be any consideration given to changing the UTP list in the future, this should be done only when it can be fully informed by an appraisal of the effectiveness of the established regulatory obligations and with adequate time for a full consultation with all relevant stakeholders. It was encouraging to hear the Minister last week confirm that the plan is not to change the current list of UTPs at this time but rather to implement and assess the effectiveness of the current system in the first instance.

Before concluding, I want to stress that the general observations of the retail sector are limited to the substance of the Bill as presented. Retail Ireland and its members take their obligations under competition rules very seriously and as such, Retail Ireland does not engage with members, or facilitate engagement between members, on matters that are in any way commercially sensitive. Members of Retail Ireland do not discuss, communicate, or exchange any market-sensitive information, including non-public information relating to prices; marketing and advertising strategies; costs and revenues; trading terms and conditions with third parties, including purchasing strategy; terms of supply; trade programmes; or distribution strategies. In this context, Retail Ireland as an association does not have an insight, and as such does not have a position, on many pricing and wider commercial issues relating to the food supply chain.

In conclusion, I would again thank the committee again for the opportunity to share the view of retailers on this piece of legislation. I am happy to take any questions on this position and if there are any areas where I do not have the relevant information to hand, I am happy to follow up afterwards.