Business Opinion: Nice to see Mary Harney taking an interest in the Groceries Order. It's amazing what a difference two years can make.

It is hard to believe that the tough-talking Tánaiste of recent weeks is the same one who two years ago dodged the best opportunity in recent times to get rid of the order.

Not only did she have a recommendation from the Competition and Mergers Review Group to abolish it , but it was also the advice of her civil servants.

Documents released under the Freedom of Information Act at the time show that it was the view of the Department's competition policy sector that she should revoke the order - which bans below-cost selling and thus stymies price wars and aggressive competition between retailers.

The order was introduced in 1987 after the H Williams supermarket chain was brought to its knees by a price war. Ms Harney was the third minister to consider revoking the order, but like Ruairí Quinn and Richard Bruton before her, she chose to retain it.

She did so despite the report of the Competition and Mergers Review Group (CMRG) which came to pretty much the same conclusion as the Fair Trade Commission had when it looked at the subject in 1991.

The commission concluded: "Promotional, non-predatory, price competition, including below-cost selling, is not less desirable than other forms of promotion such as advertising, opening hours, free delivery and so on."

It also expressed scepticism about the claims made by the order's advocates that it resulted in food prices rising by less than the rate of inflation.

Some eight years later the CMRG agreed with the commission's conclusions and that "the available evidence from the period since the commission report was written, including the evidence cited in submissions, does not controvert them".

But despite having two lengthy reports recommending that the order be repealed and the support of her Department, Ms Harney decided to not repeal the order.

The reason, one suspects, is linked to the long list of groups that lobbied her to keep it. The Department files show she was pressurised by the Irish Farmers Association, IBEC, and RGDATA - which represents the smaller retailers. She was also lobbied by BWG - which owns the Spar franchise in Ireland - and the Vintners Federation of Ireland. Other parties asking her to retain the order were Musgrave Group (SuperValu and Centra) as well as IAWS (Cusine de France). They all argued one way or another that the Groceries Order kept food prices down.

Faced with this opposition and the General Election only a year or so away, it would not have been the smartest of political moves to abolish the order.

So what has changed? The answer is, of course, inflation. In the first six months of 2000, when the Tánaiste was considering the issue in earnest, the Minister for Finance, Mr McCreevy, was forecasting inflation for the year of 3 per cent and 2.5 per cent over the period of the Programme for Prosperity and Fairness.

Inflation in 2000 ended up at 5.6 per cent, and was followed by 4.9 per cent in 2001 and 4.6 per cent in 2002. It now runs at 4.3 per cent and the loss of competitiveness that this sort of inflation has helped engender is arguably the biggest economic problem facing the Government.

Its increasingly desperate search to find some tools with which to tackle this problem has presumably led the Government back to the Groceries Order and the report of the CMRG.

One conclusion must now jump out of the pages at Government. It is the CMRG's view that "there is persuasive evidence that the ban on below-cost selling has resulted in higher prices, a decrease in price competition and an increase in margins". You wouldn't need to be an economics professor to figure out that these three things are going to contribute to inflation.

It is no surprise then that the Tánaiste should announce last week that she wants to take another look at the order.

It is also no surprise that RGDATA, the Irish Farmers Association and all the other powerful groups with a vested interest in the order's retention have wasted no time making all the points they made the last time.

But these are the points which the CMRG dismissed two years because the "available evidence was inadequate to support \". So, hopefully, this time the Tánaiste will have the courage to act on foot of the best advice and not cave in to lobbying.