While there has been little sign of lower supermarket prices since the Groceries Order was scrapped three months ago, the Minister for Enterprise Micheál Martin says expectations of short-term reductions were "unrealistic" and insists that the order's abolition will ultimately deliver "real benefits" to Irish consumers.
But not yet. On March 20th, the day the order was scrapped, PriceWatch went shopping on both the Tesco and Superquinn websites. In Tesco the bill for 20 everyday items came to €58.42, while in Superquinn a broadly similar basket cost €56.59. Last week, however, the same 20 products cost €58.25 in Tesco, just 17 cent less than in March, while in Superquinn the same basket of food is now selling for €57.27 - 67 cent more.
Only three items in our Tesco basket - milk, crisps and yoghurt - had fallen in price since the order was rescinded, while two items - bacon and eggs - had climbed in price. Meanwhile, in Superquinn, only a bag of Tayto chipsticks cost less today than before the abolition of the Groceries Order, while milk and bacon had increased in price.
While no comparative shop was done in Dunnes Stores, figures from other sources suggest that prices have remained similarly static for the same everyday items in that chain. Our findings echoed a survey by independent website ShoppingBill.com at the beginning of May which suggested that prices on a basket of goods from Tesco, Dunnes and Superquinn had risen since the abolition of the order.
Following the publication of the ShoppingBill.com price survey, consumers bombarded Tesco and Dunnes Stores with e-mails demanding to know why they had yet to experience much-promised lower prices. Tesco responded with an undertaking to cut prices on all products previously controlled by the Groceries Order "over the coming months".
But, despite increasing disquiet from consumers, there is no cause for alarm, insists the Minister. "It is only three months since the Groceries Order was abolished," Martin told PriceWatch last week. "The Order was in place for 18 years from 1987 and over that time it eliminated all vestiges of price competition from the Irish grocery trade. The removal of the Order should not be seen as some sort of short-term pain relief but rather as a long-term cure."
He promised "real benefits" would be delivered as real competition emerged. He said the Competition Authority would monitor the process to ensure "the benefits of removing the Order are not thwarted by the emergence of other anti-competitive practices".
He said that while critics of his decision to scrap the Groceries Order had argued that its abolition would see prices fall to predatory levels, "resulting in the closure of many small retailers", they are now saying that the removal of the Order was a mistake because prices have not decreased. "No doubt if prices do decrease in coming months they will revert to their earlier arguments. They can't have it both ways."
When contacted last week, a spokesman for Tesco Ireland told PriceWatch the store had cut the price of more than 1,000 products this year, "and we stand by our commitment to reduce the prices of all products previously controlled by the Groceries Order - a pledge no other retailer has made" .
He said the store aimed to lower prices "in a sustainable way" and pointed out that while the price decrease shown in our shopping basket was slight, it bucked inflationary trends which show food prices rising at an annualised rate of 2.7 per cent.
Figures from the Central Statistics Office (CSO) show that the principal increases have been on fresh meat, fruit and vegetables - products that were never covered by the groceries Order.
We contacted Superquinn but the store declined to comment on the impact the abolition of the Order has had so far on its prices.
Martin's upbeat assessment of the positive impact the Groceries Order's abolition will have is not shared by all. Writing in this paper last month, Paul Kelly, the director of Food and Drink Industry Ireland, which is part of the Irish Business and Employers Confederation (IBEC), said it was "now clear to any honest observer that the abolition of the Groceries Order will not deliver lower consumer prices. The State took advice from the Competition Authority - whose analysis was subsequently shown to be selective and questionable. It was nonsense to suggest the abolition of a single piece of 1987 legislation was the magic formula by which we could have 1980s food prices, but pay 2006 wages, energy and other costs."
In response the chairman of the Competition Authority, William Prasifka said that any suggestion "that removing the Groceries Order has been a failure is both hypocritical and illogical". He said that those who opposed the removal of the Groceries Order had claimed that their opposition was justified because prices have risen since the law was removed. "This is illogical. . . because there is no substantive information on food prices since the removal of the Groceries Order."
No substantive information just yet, perhaps, but the anecdotal evidence suggesting that supermarket prices are not falling as fast or as far as consumers had hoped is certainly growing.
