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Repeal of Groceries Order designed to eliminate competition, not increase it - Crowe

6 September, 2006


Reacting to the revelation that since the lifting of the Groceries Order prices in supermarkets have either remained the same or increased, Sinn Féin Social Affairs spokesperson Seán Crowe TD expressed his surprise at how shocked commentators seemed to be. Pointing out that the repeal of the ban on below-cost selling has been proven to eliminate competition, and not increase it, he described as ‘deeply naïve’ those who believed supermarkets would pass savings onto consumers instead of maximising profits at the expense of producers.

 

The Dublin South-West TD said: “The only surprising thing about the so-called revelation that the lifting of the Groceries Order has failed to lead to a reduction in supermarket prices is that there is any real surprise at all. The notion that the major retailers would find themselves passing savings onto the consumer instead of maximising their own profits was deeply naïve.

 

“Sinn Féin opposed the lifting of the Groceries Order because far from being designed to stimulate competition, it is in fact designed to eliminate it, driving independent retailers and small businesses to the wall while the larger supermarkets take up an increasing share of the market. It enables supermarkets to lower prices on certain high-profile items to be used as loss-leaders to attract customers, while other goods are priced the same, or even higher than independent retailers.

 

“Between 1995 and 2000, roughly one fifth of local shops and services were wiped out in Britainbecause of predatory pricing by supermarkets. Over 30,000 corner shops, grocers, banks, post offices, pubs and hardware stores disappeared from urban and rural communities across the country. 42% of towns and villages have no shopping facilities. It was estimated that by 2005, another 28,000 may have vanished.

 

“Under pressure from consumer advocacy groups there will no doubt be a reduction in the cost of some items in supermarkets, but it will be a cosmetic exercise at best to attract people into the store and it will not be the supermarkets that pay for it, but farm producers who receive a constantly reducing proportion of the final cost of items.”

 

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