The State's ban on selling groceries below their wholesale price becomes history today, with the introduction of new competition legislation for the sector.
Minister for Enterprise, Trade and Employment Micheál Martin, confirmed yesterday that he had signed the order to bring into effect the new Competition (Amendment) Act from today.
The Minister said the old Groceries Order had acted against the interests of consumers for the 18 years of its existence.
"The single most important reason for getting rid of the order is that it kept prices of groceries in Ireland at an artificially high level," Mr Martin said.
The Groceries Order allowed suppliers to specify minimum prices below which products could not be sold. Under the new rules, price-fixing legislation will be strengthened with the aim of protecting smaller operators from the most aggressive policies of larger chains.
Mr Martin said it was essential for the Government to guarantee fair competition, but he claimed industry would not benefit by being protected from all competition on domestic markets.
"This is what the Groceries Order did," he said. "Our competition laws are not designed to protect competitors. They are designed to protect competition. There is a world of difference between the two."
Mr Martin said the new rules must be kept under review and enforced "vigorously".
The Minister's assurances did not satisfy Ibec division, Food and Drink Industry Ireland (FDII), which represents the food and drink industry. It campaigned for the retention of the Groceries Order. Its director, Paul Kelly, said the key issue was whether or not the Irish consumer, the food industry and retailers would now operate in a regime that allowed for fair trade.
Mr Kelly said that while the new rules were "well-intentioned", they would not work.
"It will be impossible to police; action can only be taken after the damage is done," he said.
FDII wants to work with the Government to achieve a system that would work in practice as well as in theory, Mr Kelly said.
The legislation that comes into effect today prohibits the fixing of minimum prices by suppliers, as well as unfair discrimination in the grocery trade. It also outlaws the payment of "hello money", paid to grocers to persuade them to stock a particular product.
