Jerry Cowley (Mayo, Independent)
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Question 235: To ask the Minister for Enterprise, Trade and Employment when the consumer here will realistically see the promised changes from the abolition of the Groceries Order; if his Department has established a group to scrutinise same; and if he will make a statement on the matter. [30305/06]

Micheál Martin (Cork South Central, Fianna Fail)
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The Groceries Order was abolished primarily because it allowed wholesalers and suppliers to determine minimum retail prices charged to consumers, thereby seriously constraining price competition in the grocery trade. During the time the Groceries Order was in force more than 2,000 small independent retailers went out of business resulting in the grocery trade in Ireland becoming more concentrated in the hands of fewer participants.

The combined impact of these events was to create a floor under the retail price below which groceries could not be sold. This resulted in Irish consumers paying more for their groceries than would otherwise have been the case. However, there are many factors which impact on the price of groceries in our supermarkets. The lack of competition caused by the Groceries Order was only one such factor. Others would include production costs, labour costs, interest rates, overheads, international exchange rates and so on. Because of this, and despite the implication in the question, I never made any predictions as to the likely extent of price reductions resulting from the removal of the Order. I believe, however, that consumers are already seeing some early benefits with one multiple recently announcing its intention over coming months to implement reductions in the prices of thousands of products previously covered by the Groceries Order. This announcement appears to have had a positive impact on competition in the market with other significant players adopting competitive pricing strategies. I believe, however, that the real benefits will be felt over time as price competition increases at retail level thus reversing the 18 years of damage caused by the Order.

I have asked the Competition Authority to closely monitor the grocery sector, not least to ensure that the benefits of removing the Order are not thwarted by the emergence of other anti-competitive practices. That is why, for example, the Competition Act 2006 prohibits practices such as resale maintenance, which were institutionalised by the Order. It would be very damaging to consumer interests if such practices were to emerge within the grocery trade in another guise. My officials have had discussions with the Authority in this regard and will continue to meet with them as the process develops. I have also asked the Authority to report periodically on the results of their monitoring and to make any recommendations they consider appropriate in the light of their findings.