Enterprise Minister Simon Coveney has said that a new study has found "no evidence of excessive pricing" in the Irish grocery retail market.
The report was published the evening before Minister of State Neale Richmond is due to meet with retailers for the Retail Forum. The Consumer and Competition Protection Commission (CCPC) carried out the study following concerns that there was price gouging in some supermarkets. Taoiseach Leo Varadkar was one of the people who suggested that there was evidence of price gouging.
The report states that the inflation associated with food and non-alcoholic beverages increased by 13.1 per cent in the year to April 2023. This reflected a rise in prices across a range of products such as sugar (38.9 per cent), frozen fish (29.9 per cent), fresh whole milk (24.1 per cent), butter (18.9 per cent), and eggs (18.3 per cent) compared with April 2022.
The CCPC concluded that it had "not seen any indications to suggest that ‘excessive pricing’ is occurring in the grocery retail sector as a result of an abuse of dominance". It noted that Irish consumers have "historically experienced relatively high grocery prices" and prices are 19 per cent above the European average.
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"Downward and upward changes in input prices do not appear to be immediately reflected in retail prices," the report reads.
"The recent fall in some commodity and input prices may take time to pass through to consumers due in part to the lag effect in supplier/retailer contracts.
"The data available on profit margins is limited and no public data from full audited accounts is available on 2023 margins.
"The figures that are available do not suggest that margins are notably high when compared with similar traders internationally or compared to different sectors although any conclusions on margins should be treated with caution."
In his letter to Minister Coveney, Patrick Kavanagh, interim chairperson of the CCPC, also noted that there is no evidence that interventions on prices work and they "carry a significant risk of unintended consequences and may actually harm consumers".
Minister Coveney welcomed the fact that the CCPC has found no evidence of "excessive pricing".
He said: "Their analysis has also found that competition on price, quality and location has improved in recent years resulting in more choice for consumers.
"I’m very conscious that food prices remain high when compared internationally. This report however finds that food inflation in Ireland has been the lowest in the EU in recent years and that changes in input costs may take time to be passed on to consumers."
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