Food and Drink Industry Ireland (FDII), the Ibec group that represents the Irish food sector, has welcomed the grocery regulations signed into law by Minister for Jobs, Enterprise and Innovation Richard Bruton on Monday.

The new regulations state that contracts for the supply of food and drink must be in writing and cannot be varied or terminated except with the express consent of both parties.

Retailers or wholesalers must pay for those goods within 30 days and suppliers can require them to provide forecast of the goods that will be needed. The new regulations will prohibit marketing charges – except where under contract.

Major Imbalance

The FDII, which has long campaigned for these regulations, says they will help address the major imbalance in the relationship between major grocery retailers and suppliers. The industry group added that only last week the problem of imbalance between retailers and suppliers was highlighted by the grocery market watchdog in the UK and the European Commission.

Paul Kelly, director of FDII, said consumers are best served by a fair and competitive grocery market.

Ireland has been slow to act, but the new rules will help to address some of the unfair pressures currently put on suppliers by major retailers

“Unfair practices faced by food companies include a failure to respect contractual terms, de-listing threats and unilateral deductions off-invoice without sound business reasons. In the short-term these demands impact on individual suppliers, but ultimately they are also bad for consumers,” he said.

“Consumers are best served by a grocery market that offers choice and convenience, and provides an outlet for new products and suppliers. Ireland has been slow to act, but the new rules will help to address some of the unfair pressures currently put on suppliers by major retailers,” he added.

The regulations will be enforced by the Competition and Consumer Protection Commission and non-compliance will be punishable by fines ranging from €6,000 to €100,000 and up to two years in prison.

Suppliers will also have an option to sue retailers and wholesalers for damages if they abuse their position in the food chain.

“The regulations present a unique opportunity to create a fair trading environment in the Irish grocery sector and it is now up to the Competition and Consumer Protection Commission to effectively and efficiently enforce the rules,” said Kelly.

Read more

IFA: absence of ban on below-cost selling 'serious weakness' in new grocery laws