Food & drink sector needs fair trading proactive approach

The latest business monitor from Food Drink Ireland (FDI), the Ibec group that represents the sector, has highlighted the importance of effective and efficient enforcement of fair trading grocery regulations, aimed at addressing the major imbalance in the relationship between grocery retailers and suppliers.

FDI Director, Paul Kelly stated: “Unfair practices faced by food suppliers that impact their costs are not only bad for business and individual suppliers, but ultimately they are also bad for consumers. The new Grocery Goods Regulations, which came into effect one year ago, aimed to address these issues and the unfair demands being put on suppliers. These include a failure to respect contractual terms, de-listing threats and off-invoice deductions without sound business reasons.

“Suppliers need to have certainty in respect of the risks and costs of trading, a key principle enshrined in the legislation that established the Grocery Goods Regulations. Consumers are best served by a grocery market that is both fair and competitive, one that offers choice and convenience, and provides an outlet for new products and suppliers.
"The regulations have already made significant inroads to addressing some of these pressures and demands on suppliers. The Competition and Consumer Protection Commission must be a strong voice on these issues and ensure the spirit of the regulations is adhered to".

Other key trends from the FDI business monitor include:

Food Prices: Food prices continue to fall, decreasing by 2.5% in the year to March.

Retail Sales and Consumer Sentiment: Food retail sales are increasing but value is lagging volume growth.

Employment: Employment levels continue to increase and the labour market is tightening with unfilled vacancies at twice 2011 levels.

Sterling Exchange Rate: Sterling weakness has faded somewhat but higher imported inflation may encourage the Bank of England to raise interest rates.

Energy Prices: The rise in the wholesale price of energy products over the last year stopped in March which saw a decline in the month.

Food Commodity Indices: Prices of world food commodities declined month on month in March for the first time in almost a year.

Irish Monthly Food Trade: The slight strengthening of sterling had a positive impact on food exports to the UK which increase by over 4% in both January and February compared with the same months in 2016.

UK and France Food Retail Sales: Retail sales growth for the first quarter of 2017 compared with same period in 2016.

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