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Retailers under pressure from proposed EU supplier trading law RETAILERS are concerned that attempts to introduce new legislation around the retailersupplier relationship may add extra layers of bureaucracy and cost. Michael Creed TD, Minister for Agriculture, Food and the Marine, recently announced the launch of a public consultation process on incorporating the EU’s Unfair Trading Practices (UTP) Directive into Irish law. According to the Minister, the directive is “one of a number of initiatives at EU level aimed at improving the transparency and fairness of the food supply chain”, which aims to “protect weaker suppliers against UTPs by stronger buyers in the food supply chain”. However, Irish retailers contend that fair trading is already covered under the Consumer Protection Act 2007 (Grocery Goods Undertakings) Regulations 2016, which is also known as the Grocery Goods Regulations. The current regulations only apply to retailers and wholesalers of food and drink in Ireland with a worldwide turnover in excess of €50m. “Under UTP, suddenly the net will extend to every shop that has a turnover of €2m,” Tara Buckley, RGDATA’s Director General, told Retail News. “The vast majority of our members buy most of their goods through one of the three big wholesale groups, which are all caught by the Grocery Goods Regulations. It seems bizarre to us that we are going to end up with a set of regulations that will extend out and apply to very small players in the market, and create a potentially huge burden of regulation at a huge cost.” Under the current regulations, which were introduced “to bring transparency and fairness into the trade relationships between grocery goods suppliers and wholesalers and retailers”, according to the CCPC, grocers must keep records, provide information and contracts. The CCPC has been carrying RGDATA Director General, Tara out compliance checks of Buckley. retailers and wholesalers that fall under its remit. The UTP directive includes these criteria, but will require additional compliance. “Suddenly we’re going to need inspection, regulation, and more paperwork, for a tiny percentage of the market,” added Buckley. “If our members have to pay new staff to handle the additional regulation, where do they get that money? Do they put their prices up?” Earlier this month, the Oireachtas Joint Committee on Agriculture, Food and the Marine, met with Christine Tacon, the UK’s Groceries Code Adjudicator (GCA) who uncovered incidences in which Tesco delayed payments to suppliers

between 2013 and 2015. Committee members called for stricter regulation to be imposed on retailers at the event. “If [UTP] came in this evening, it wouldn’t come in quick enough into this country,” said Labour TD Willie Penrose. “We’re eager that it should be widened into this country. The impact of unfair trading practices here in Ireland on the primary producer is very serious. The primary producer gets an average of 21% of the cost of a product. The retailer gets 51%.” Pat Deering, a Fine Gael TD, echoed this accusation, saying: “someone is making money off the process, other than the primary producer”. Penrose cited “evidence” of retail cartels Michael Creed TD, Minister operating in Ireland. “There of Agriculture, Food and the has been lot of unrest here Marine. in the last decade and a half. We have one industry in which there are four or five big players… It’s easy when there’s a small cohort of individuals controlling the industry, where the casualties are the primary producers.” Yet there has been no recorded evidence of ‘hello money’, the practice whereby a retailer charges producers for shelf placement, in Ireland. Tacon, who referred to the practice as “listing fees”, said it was not a common occurrence in the UK either. “On the whole, listing fees have tended to disappear,” she told the committee. The Irish Farming Association (IFA) has stated its distrust

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Retail News November 2019  

Retail News, is Ireland’s longest established FMCG B2B magazine. It has been around for over 60 years, from the birth of the supermarket, th...

Retail News November 2019  

Retail News, is Ireland’s longest established FMCG B2B magazine. It has been around for over 60 years, from the birth of the supermarket, th...

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