Dáil Éireann - Volume 657 - 19 June, 2008
Written Answers. - Food Prices.
Deputy Eamon Gilmore Deputy Eamon Gilmore
Deputy Eamon Gilmore asked the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to the results of a number of surveys showing that reductions in the cost of goods imported from outside the euro area, which should have followed on from the increase in the value of the euro, particularly against sterling and the dollar, are not being passed on to consumers; the action she will take to ensure that such savings are passed on; if she will provide additional statutory powers for the National Consumer Agency to deal with this problem; and if she will make a statement on the matter. [23924/08]
Deputy Bernard J. Durkan Deputy Bernard J. Durkan
Deputy Bernard J. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment if food prices here reflect the strength of the euro; and if she will make a statement on the matter. [24226/08]
Deputy Mary Coughlan Deputy Mary Coughlan
Deputy Mary Coughlan: I propose to take Questions Nos. 14 and 123 together.
I am aware of the concerns raised in the Deputies’ questions and in a number of surveys that consumers may not be experiencing the benefits of the Euro’s appreciation in value, particularly against the dollar and sterling and I too share those concerns.
Indeed the latest survey published by the National Consumer Agency yesterday comparing the price of a basket of grocery items in supermarkets north and south of the border show that the supermarkets concerned are charging customers in their stores in the Republic significantly more than what they are charging customers in their stores in Northern Ireland for the same basket of goods. The survey shows for instance that in the case of branded goods, the price charged to customers south of the border ranged from 28% to 31% higher than the price for the same goods north of the border. It is my strong view that retailers have a duty to their customers and to the economies in which they operate to explain why there are such price differentials between their stores in the two jurisdictions. I am not satisfied that we have as yet received adequate explanations for these price differentials.
The Deputies may be aware that prior to carrying out its survey, the National Consumer Agency had, in bilateral discussions with retailers, raised its concerns that the benefits of the Euro’s appreciation against the dollar and sterling were not being passed on to consumers. In the course of those discussions, retailers have advised that the benefits of recent exchange rate movements may not be fully reflected in their prices as in many instances they are tied into long term hedging arrangements, which do not make it possible for them to respond to short-term exchange rate fluctuations.
Notwithstanding such considerations, the National Consumer Agency was of the view that in some instances the price charged by retailers reflects a price level that the retailer anticipates the Irish market will bear, and this may or may not take into account movements in exchange rates. The Agency’s North/South survey illustrates the reality of the price differential between the two jurisdictions. I welcome the fact that the Agency will, in addition to its regular national Price Comparison Surveys, also conduct further cross border surveys of this nature. The find ings of these surveys will help to show as to how competitive the retail marketplace is in the Republic. In addition, the publication of more regular and more comprehensive price information by the National Consumer Agency, and a willingness by consumers to act on that information, can play a key role in the development of a more competitive marketplace.
Aside from the work of the National Consumer Agency, I also initiated an engagement with the retail sector to make it aware of the Government’s serious concerns on this mater. In this regard, in the past number of weeks I have met separately with the Irish Business and Employers Confederation and leading members of Retail Ireland, and have also written to major individual retailers. I was advised at those meetings that, while the retail price of goods imported from the UK had lagged exchange rate movements due to factors such as the forward purchase of goods and currency, there had already been reductions in the price of some goods and further reductions were in the pipeline. Whilst the Consumer Price Index data for the month to May 2008 show that there have been some reductions in the price of a number of goods such as breakfast cereals and biscuits known to have a significant UK import content, there is still a considerable way to go as these modest reductions do not reflect the scale of the currency movements between the Euro and Sterling.
It is my intention to continue to constructively engage with the retail sector in the period ahead on this issue. I am determined to pursue the serious questions raised by surveys such as that carried out by the National Consumer Agency with a view to securing a satisfactory outcome for Irish consumers.
Dáil Éireann 657 Written Answers. Food Prices.