Trevor Sargent (Dublin North, Green Party)

The Department of Enterprise, Trade and Employment consulted closely with my Department in preparing the consultation paper for the public consultation process, which was launched last August. Her Department is currently assessing some 28 submissions received from a range of interests. It is my intention to work in close consultation with the Tánaiste in developing a code on the lines of our programme for government .

The proposed introduction of a code of practice for grocery goods undertakings follows public debate on grocery prices and price differentials. The consultation in August was undertaken to address concerns raised about the nature of the relationships between grocery goods businesses and, in particular, in the relationships between suppliers and retailers of grocery goods. The questions asked of stakeholders, including consumers included whether any such code of practice should be voluntary or statutory in nature; how it might best be enforced; whether a separate Ombudsman's office should be established; whether there should be a threshold to limit its application, and what impact application of such a code might have on consumer choice and prices.

Underlying the debate is the increasing concentration of retail power in the hands of a few large supermarket chains. This is an international phenomenon, which has fundamentally changed the balance of market negotiating power in the food chain. It is one factor, although not the only one, contributing to the declining share of the retail price received by producers. Although there is, of course, always potential for some tension in any market relationship, there has been a noticeable trend recently towards greater tension, and even allegations of sharp practice.

At the Council of Ministers I raised the issue of the need for balance in the food supply chain and colleagues in the Council also expressed strong views on this matter. In January there was a discussion on a road map to improve the functioning of the food supply chain. I said then that competition alone cannot act as a sole mechanism to maintain efficient markets. The careful and sensitive use of market management measures can help to maintain balance on the market when appropriate and the use of such mechanisms can assist in the provision of fair returns to producers.

At EU level there is a need to give urgent thought to ensuring that markets function well and that unfair practices are prevented. The agri-food industry is hugely important to Ireland and the EU. The EU needs to safeguard its production base so that it can meet the future demand of its population for food, feed and bio-energy. It is my firm view that retailers must strike a reasonable balance between granting value for consumers and giving to suppliers and producers. Balance between all stakeholders, including suppliers, producers, retailers and consumers may well be difficult to achieve but the Tánaiste and I are committed to working towards mechanisms at EU level.

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