Minister Bruton Must Move Quickly on Retailer Code of Practice

IFA President John Bryan has urged Enterprise Minister Richard Bruton to press ahead with an effective Statutory Code of Practice for the retail sector without delay. He made his comments as part of the submission this week by the Irish Farmers’ Association to Minister Bruton on the draft Code of Practice for Grocery Goods.

John Bryan said, “The recent experience of suppliers to Superquinn underlines the importance of securing equity in the food supply chain. The imbalance that exists led to suppliers being squeezed out by the receivership process and without payment, threatening their viability and jobs. IFA is insisting that the Code of Practice addresses the credit terms that retailers impose on suppliers and reduces the current levels to 21 days. There must also be a provision for ‘Retention of Title’; this should be automatic until goods delivered are paid for in full.”

“The Code must address the imbalance of power in the supermarket/supplier /producer relationship and ensure retailers’ actions do not impact unfairly on primary producers through their pricing and purchasing decisions. The Code must also prevent below cost selling and predatory pricing practices.”

The IFA President said the retail sector has become concentrated further following the sale of Superquinn. “Assuming the Musgrave offer is approved, the three main players will control nearly 80% of the market. This level of ownership among a small number of retailers could exacerbate the difficulties for the primary producer. Effective legislation, which is properly enforced, could help to allay the concerns of everybody else in the food chain.”

Mr Bryan said the main focus of the Code should be on the supermarket multiples operating in the Republic of Ireland. However, since a number of those are foreign owned, the provisions of the UK Code whereby suppliers from outside the State are also bound by the regulations should be incorporated into the Code.

He said, “It is clear from the engagement between the retailers and the facilitator John Travers that the multiples want to block any attempt to rebalance the food supply chain. Minister Bruton must not be deflected from the commitment in the Programme for Government to introduce effective legislation.”