Celebrity economist Eddie Hobbs has weighed in on the debate over a statutory Code of Practice for the grocery industry, describing the Oireachtas Committee's recommendations as 'daft'.
Speaking to Newstalk, Hobbs said that should a statutory Code be introduced it would lead to "increased prices for the consumer", as well as an increase in the amount of food the multiples purchase from outside Ireland, "which would not be bound by such red tape."
"We are now in a situation where a Committee, which is chaired by a Fine Gael farmer, and which has three other farmers sitting on it, have come to the conclusion that the government needs to interfere in the market and diminish the power of the multiples, while increasing the power of the producers. The only result of that will be increased prices.
"Despite all of these recommendations that have been made, nobody has looked into how this process will increase prices for the consumer."
Hobbs noted that while Irish grocery prices were, on average, 38% more expensive than their European counterparts up until 2008, the events of the last few years have seen that differential drop significantly.
"We're currently about 17% or 18% more expensive than continental prices," he said. "However, I find it obnoxious that just as progress is being made in this regard, we're on the verge of introducing rule changes that will reverse the reduction in the cost of an Irish grocery basket relative to a continental grocery basket.
"We will be the only country in Europe with that red tape - and consequently the multiples will increase the amount of food they import into Ireland, which will not be bound by red tape, rather than continue to purchase from Irish producers."
Hobbs also noted that producer lobbying to fix a minimum price for milk "is straight out of a 4am dream by the Irish Farmers Association."
© 2013 - Checkout Magazine by Stephen Wynne-Jones