Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

I propose to take Questions Nos. 8 and 35 together.

The CAI survey showed that comparing 16 items across four different multiples found less than 2% price differential between them. This has also been a feature in surveys by the National Consumer Agency. The CAI suggests that special offers appear to be available rather than price differences to win new customers.

It should be said that price matching in itself is not a breach of competition law. The Competition Authority of Ireland has conducted a number of studies of competition in the grocery sector. The long-term trend has seen a decline in the number of independent retailers and growth in the number of multiples. The authority has found relatively weak competition at the wholesale and retail levels of the Irish grocery supply chain. Frequently, competition has been by way of special offers rather than by price. The Irish distribution system has been found to be inefficient compared to Britain. That said, there has been quite an amount of change in the distribution channels that have brought savings but these savings have not been uniform across the sector. The key recommendations made by the Competition Authority of Ireland were to relax the planning guidelines to make it easier for new retailers to contest the market. The Minister for the Environment, Community and Local Government has introduced new retail guidelines which are designed to reduce barriers to entry.

The entry of discount retailers has undoubtedly introduced greater competition into the market. These stores do not typically carry the branded products surveyed by the CAI and were not included in its survey.

As regards food prices, figures published by the Central Statistics Office show that food prices in Ireland increased by over 2.5% over the 20 month period coinciding with the CAI survey which showed that the price of 19 branded grocery items in four major multiples had increased by over 12%. The CSO harmonised indices of consumer prices, which is the accepted measure for comparing price trends across the EU, shows that food prices in Ireland increased by 1.6% in the 12 months to December 2012 as compared with an increase of 3.4% in the EU and 3% for the Euro area for the same period. The harmonised indices also show that food prices in Britain increased by 3.8% in that period.

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