The Irish Competition and Consumer Protection agency is primarily focused on protecting and enhancing consumer interests. There is an element where the food and grocery sector now comes under its remit but this is mainly in banning certain practices such as “hello money” to secure a place on supermarket shelves.

There is nothing to recognise the fact that food at retail level now represents about 10% of the average consumer’s spend, compared to 30% in the not so distant past. The amount of the consumers’ euro that gets back to the actual farmer is tiny. But still the essential consumer-focused remit remains. It’s time for a re-examination of what the mandate of a competition authority should mean.

In the UK, the proposed merger of Sainsbury’s and Asda is coming under real official scrutiny. The organisation in the UK is called the Competition and Markets Authority which gives a useful indication of the wider scope it has. In the grocery merger of the two retail giants, it will be looking to see if the merged entities’ increased buying power could be used to “squeeze suppliers”. Not surprisingly, the UK National Farmers Union has expressed similar fears.

The core question for legislators here and in Europe is to attempt to put in place a legislative framework that protects suppliers’ interests. As markets become more concentrated, this becomes more urgent.

We can see this in several commodity areas in Ireland – whether it’s malting barley or beef. The beef case is particularly relevant where private, unlimited companies with no obligation to publish their accounts have access to raw material which has no other real available market except their meat plants. The indications of super normal profitability in the sector are very clear.

Suppliers

Nobody pretends that these are easy issues to deal with but at a minimum, the legislation surrounding competition law should be extended to take into account the interests of suppliers. EU Commissioner for Agriculture Phil Hogan has recognised the issue, but even within the Commission he has faced opposition in attempting to propose fundamental change.

From an Irish farmer perspective, a detailed paper needs to be prepared with the IFA presumably taking the lead, and presented to Government.

Read more

Why farmers should be worried about Sainsbury Asda merger