The current high-levels of inflation in the grocery retail sector and resulting price increases have significantly impacted consumers, particularly those on low incomes, research has shown.
In June 2023, the Competition and Consumer Protection Commission (CCPC) conducted a 'rapid and high-level analysis' of the grocery sector in Ireland
According to the CCPC the analysis was completed following a request on 26 May from the Minister for Trade, Enterprise and Employment, Simon Coveney.
The purpose of the analysis is to outline the CCPC’s observations on competition in the grocery retail sector in Ireland in response to questions put to it by the Minister Coveney on prices being charged by major grocery retailers in Ireland and whether these prices are excessive, the group added.
In response to the questions posed, the CCPC provides the following observations on competition in the grocery retail sector and an overview of how our statutory functions related to the grocery goods sector.
In response to concerns raised in relation to recent higher grocery prices, the CCPC considers it appropriate to set out our current observations based on international experience in response to the Minister for Trade, Enterprise and Employment.
The CCPC noted that the analysis has been done in a short period using publicly available information and should be interpreted as high-level analysis.
Key CCPC Observations
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The grocery sector is a critical one for Irish consumers and recent price increases have caused real stress on many households.
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Concentration in the grocery retail sector has reduced and competition on price, quality, location and service has improved in recent years. This has resulted in more choice for consumers and they can switch easily between competitors.
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There have been significant gains in market share by some players in recent years, although some barriers to entry may remain at local level.
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Food prices remain high when compared internationally. However, over recent years food inflation in Ireland has been the lowest in the EU.
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Changes in input prices do not appear to be immediately reflected in retail prices – recent falls in input prices may take time to be passed onto consumers due, in part, to the lag effect in supplier/retailer contracts.
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The CCPC has seen no indication in this analysis to suggest market failure or “excessive pricing” as a result of an abuse of dominance at this time.
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The CCPC identified a number of price interventions internationally in relation to the grocery retail sector but have not seen any evidence that price interventions have benefitted consumers. Price interventions carry significant risk of unintended consequences and may actually harm consumers.
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Acknowledging that it is an area outside of the CCPC remit, information is also provided on the international experience in relation to price observatories and price monitoring in this area, noting there are pros and cons to these tools.
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As part of its ongoing activities and in line with our powers, the CCPC will continue to engage with the grocery sector.
Read More: CCPC Welcomes Oireachtas Approval Of Consumer Rights Bill 2022
© 2023 Checkout – your source for the latest Irish retail news. Article by Donna Ahern. For more retail news, click here. Click subscribe to sign up for the Checkout print edition.
