Louise O'Reilly (Dublin Fingal, Sinn Fein)
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157. To ask the Minister for Enterprise, Trade and Employment if he is aware of the impact of inflation on breast feeding baby formula which has increased by up to 25%; if he is also aware of reports by the European Central Bank that corporate profiteering has been one of the biggest contributors to price increases; what options are available to help parents in the face of these price hikes; and if he will make a statement on the matter. [20995/23]

Dara Calleary (Mayo, Fianna Fail)
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I am conscious that current geopolitical events including Russia’s illegal invasion of Ukraine, have led to a complex and uncertain environment that is impacting economies around the world and affecting people in their daily lives. In its reports, the European Central Bank (ECB) indicates that recent high inflation is due to increased energy prices and supply chain issues (which impact import charges), resulting in a loss of real income for both households and businesses. The ECB states that it is closely monitoring any exploitation of the uncertainty created by high and volatile inflation and supply-demand mismatches. The ECB predicts that over the coming years growth in profit margins and wages will moderate as a result of its efforts to lower inflation and that this will have a knock-on effect on product prices.

The increase in commodity prices such as oil, energy and grain has resulted in increases on the sale price of a number of core products such as milk, butter and bread. However, a recent study by consultants Kantar is showing that the rate of food inflation in Ireland has dropped slightly for the first time in two years for the period February to April. This compares to Eurostat figures for the Eurozone area which shows inflation rose to 7% in April. While this is positive news for Ireland, I know it does little to ease the concerns of people and their families who are faced with increased costs in their everyday purchases.

Traders in Ireland are free to set and change their prices for goods and services. In general, there are no limits to the prices that a trader can set and the level of profits they make. There is no legislation explicitly stating what the maximum or the minimum price for any product or service should be (the one exception is minimum unit pricing for alcohol).Such an approach aims to promote competition amongst retailers and service providers.

Sections 61 and 62 of the Consumer Protection Act 2007 provide for the setting of maximum prices for products, to be specified, for sale to consumers (not businesses). These powers date back to when Ireland ceased World War II rationing and they have not been availed of since their enactment. Such price controls are regarded as a blunt instrument which could have serious economic impacts for individual traders and Ireland as a whole. For goods or services that are imported or where domestic production has a high import content, the effect would be reduced supply. In other cases, the risk lies in the medium-term effects on competition in the marketplace and supply chains.

This government remains committed to helping protect the most vulnerable, families and businesses from the rising cost of living and introduced measures to the value of €12billion to help ease the burden of inflation being experienced by consumers and businesses. Household transfers, including electricity credits, account for around half of the overall fiscal response, with tax measures accounting for one-third and the remainder is composed of business and other expenditure supports.

On an ongoing basis, the Government responds to price increases by seeking to prevent any abuse of market power by companies. In this regard, it is illegal for competing businesses to form a cartel - that is, an agreement to fix prices - or to agree a common pricing policy or to carve up a market in order that they do not have to compete. It is also illegal for businesses to share information about their future pricing intentions. Wholesalers may not dictate the retail prices charged for their products by independent retailers. As long as businesses do not collude, however, they are free to set their own prices and may observe their competitors' prices and adjust their own prices accordingly.

The Competition and Consumer Protection Commission (CCPC) is responsible for ensuring that prices are set independently by competing businesses by enforcing laws that mean there is competitive pressure on businesses to set prices at a level that will attract customers. Where appropriate, the CCPC investigates suspected breaches of competition or consumer protection law and takes enforcement action if the investigation uncovers sufficient evidence of a breach.