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Minister Bruton Rejects Calls For Ban On Below-Cost Selling

Published on May 20 2014 10:16 AM in Retail

Minister Bruton Rejects Calls For Ban On Below-Cost Selling

Enterprise Minister Richard Bruton has rejected a proposed amendment to the Consumer Protection and Competition Bill calling for a ban on below-cost selling of grocery products.

The Bill was debated at Committee Stage last Thursday, with opposition TDs Dara Calleary (FF) and Peadar Tobin (SF), tabling a number of amendments, including an amendment to prohibit retailers from selling "grocery goods at a price that is less than the net invoice price of the goods."

"The Minister has emphasised that this Bill aims to protect against abuse of the supplier relationship," said Calleary. "There is no doubt that below-cost selling is underway and that below the net invoice price selling is under way. The Minister knows well that a turnip cannot be produced for five cent."

Echoing his comments, Meath West Sinn Fein TD Tobin commented: "In my view an honest day's work deserves an honest wage and an honest product deserves an honest price. […] No matter which way this process is cut and diced, below-cost selling leads to the exploitation of sellers.

"I have been at a number of committee meetings where the cross-party general view was that with regard to alcohol and other products, below-cost selling was leading to negative outputs for society in general and for suppliers. Here we have an opportunity to resolve that and I urge the Minister to resolve it once and for all."

Minister Bruton rejected the proposed amendment, however, saying that since the abolition of the Groceries Order in 2006, "there is no statutory basis for me, as Minister for Jobs, Enterprise and Innovation, to make a minimum pricing order in any sector."

He added: "The use of aggressive pricing strategies in any business is a legitimate marketing tool and the normal outcome of the competitive process. Low-cost and below-cost selling by a retailer is not in itself an offence, unless it involves an abuse of a dominant position.

"A determination on whether a retailer is abusing a dominant marketplace position would necessitate a comprehensive investigation by the Competition Authority, the independent statutory body responsible for enforcing competition law in the State."

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