The Government hopes to see grocery prices coming down before next summer after it passes legislation before Easter to abolish the controversial Groceries Order.
Yesterday's Cabinet meeting, which finally approved the abolition of the order, also approved the heads of the short Bill required to put this decision into effect.
Minister for Enterprise Micheál Martin yesterday did not rule out the publication of the legislation before Christmas. The Government's anxiety to be seen to move quickly on the issue means the Bill may be passed through the Oireachtas by Easter.
After months of deliberation and consultation, Mr Martin declared yesterday: "There really was no option available to the Government other than a decision to revoke the Order." He refused to speculate on how much grocery prices would fall as a result of the decision. However he strongly denounced the order as anti-competitive, and made clear his belief its abolition would bring prices down.
"The evidence is overwhelming that the Order has not had the impact which it was designed to achieve or which is claimed for it," he said. "It has not brought fairer competition, it has not helped independent retailers and it has not prevented the concentration of the groceries trade. However, it has helped ensure that Irish consumers pay higher prices for their groceries."
Smaller grocers and retail outlets, which had lobbied intensely to retain the order, were last night disappointed by the decision. However, their representative organisation RGDATA put a brave face on the outcome and welcomed changes in competition law proposed yesterday by the Minister.
These include measures to prevent anti-competitive practices of which large multiples are accused, including predatory pricing, the seeking of "hello money" from suppliers to their stores and the fixing of minimum retail prices by wholesalers.
Fine Gael and Labour last night demanded to know details of this legislation, saying it was impossible to judge the wisdom of the Government's move until details of these changes were known.
Mr Martin sought credit for the Government's decision to press ahead with abolition of the Groceries Order despite the powerful lobbies seeking its retention. While acknowledging the role of the Rip-Off Republic television series presented by Eddie Hobbs in raising awareness of the existence of the Order, he said the deliberative process leading to the order's abolition had begun some time before that series was screened.
"There has been considerable opposition to the removal of the Order," he told a press conference yesterday. "Opposition within the trade, opposition within industry, opposition within the parliament. We saw that recently in terms of the Oireachtas committee [ which supported the order's retention]. This has been a contentious issue."
Asked about the length of time it had taken for the Government to abolish it, he said: "The world is a much different place than it was in 1987 and indeed seven or eight years ago, and in particular the nature and structure of the market has changed significantly."
He said he expected the legislation to be dealt with "reasonably expeditiously on the basis that we have already had a significant debate on it". An Oireachtas committee had dealt with it twice. He said the legislation would come "as quickly as we possibly can - we are talking about months." He didn't expect to see price reductions the moment the legislation was passed.
"The removal of the Order will remove an instrument that has artificially kept prices high. It will be interesting to see how the market responds to this once the legislation is passed. We do anticipate a much more competitive market, and we think this decision will inject some dynamic into it."
He said evidence pointed to a connection between the Groceries Order and higher food prices. The food inflation rate in Ireland since 1996 had been three times the rate in the UK, and almost twice the EU average. There were eight countries in the EU with legislative provisions concerning below-cost selling. "Those eight countries have had the eight highest rates of food inflation in the EU in the period since 1996," Mr Martin said.