Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

The food sector falls within the remit of the Minister for Agriculture, Food and the Marine, and his Department keeps in close contact with the relevant actors in that sector. Fairness and transparency in the food sector are essential, as is ensuring that consumers have access to sufficient and accurate information before making a purchase. That is why the Minister, Deputy McConalogue, is establishing the new agrifood regulator under the Agricultural and Food Supply Chain Bill 2022. Price development along the food supply chain will form part of the remit of the new regulator. It will have two functions in this regard: a price and market analysis and reporting function and a regulatory enforcement function concerning the enforcement of prohibited unfair trading practices.

In terms of my own remit in relation to competition, I wrote to the CCPC in May requesting an assessment of competition in the grocery retail sector and whether there is evidence of excessive pricing on the part of retailers. In its report, the CCPC states that it has not seen any indications of any market failure or excessive pricing taking place in the grocery retail market. In addition, the CCPC states that there is evidence that competition has improved in recent years on the basis of price, quality, location and service and notes that this has resulted in greater choice for consumers. Of course, it is true that food prices in Ireland remain high when compared internationally. This is based on a number of factors. These relate to Ireland being a small island nation with inevitably higher costs for transport, our small market size, staffing costs and the fact that we are a significant importer of energy and food produce. As a small, open trading economy, Ireland is exposed to global inflationary pressures, including fluctuations on international markets for food, commodities and energy.

However, it is a welcome development that food inflation in Ireland is declining and as of May was at 5.4% which is below the EU average of 7.1% and the euro area average of 6.1%. Despite our high price position, Ireland remains a competitive economy. Ireland was recently ranked as the second most competitive economy in the globe under the IMD world competitiveness rankings. Having said all that, I think we need to continue to monitor the food retail market closely. We need to understand in more detail why we continue to be a country that has higher food retail prices than most other countries in the EU, even though there are some factors that explain that. I have made it very clear to the sector that we will follow it closely. Of course, we will also work with the new regulator in its new remit.

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