For Oral Answer on : 08/12/2022
Question Number(s): 129 Question Reference(s): 61220/22
Department: Agriculture, Food and the Marine
Asked by: David Stanton T.D.
To ask the Minister for Agriculture; Food and the Marine if his Department has examined the potential impact of below cost selling of agricultural products in various multiples; and if he will make a statement on the matter.
The Deputy may be aware that the Restrictive Practices (Groceries) Order 1987 prohibited below invoice price selling for certain products. That Order was revoked in 2006 by the then Minister for Enterprise, Trade and Employment.
Studies have found that laws banning below-cost selling failed to safeguard the parties they aim to protect from declining market shares and often lead to higher prices for consumers.
A 2006 study on the impact of the Groceries Order found that it had failed to achieve its aims of creating a fair-trading environment, or protecting vulnerable suppliers from the buying power of the largest retailers.
Ireland exports almost 90% of the food we produce, so it is external markets in general that determine the price paid to Irish producers or food companies. In regard to the domestic food market, a below cost rule, if it made Irish produce more expensive relative to imports, could have the effect of reducing demand for domestic produce.
The Unfair Trading Practices regulations, which I introduced in April 2021, prohibit a buyer from unilaterally changing the terms of a supply agreement including the terms of payment or the price.
Therefore, an unfair trading practice would arise if the buyer does not pay the supplier the price agreed by both. Further information on unfair trading practices is available from the UTP Enforcement Authority at utp.gov.ie.
The importance of increasing availability of information about fairness and transparency in the agricultural and food supply chain is of critical importance. That is why I have ensured that the draft legislation setting up the new Agri Food Regulator will give the Regulator powers to promote fairness and transparency; to collect, analyse and regularly publish reports on price and market data concerning the agricultural and food supply chain; as well as to make recommendations in relation to policy matters or proposals for legislative change to myself as Minister.
I am pleased that the Government approved the draft Bill last week, and I look forward to introducing the Bill into the Oireachtas in the near future. This will be an office with real teeth that will work hard to protect farmers, fishers and all primary producers who are the bedrock of our great sector.