Price caps for retailers mooted if grocery prices are not reduced

Supermarkets are to come under pressure from the Government to reduce grocery prices or face the possible use of consumer protection powers that allows for the setting of price caps. It comes as retailers have begun reducing the price of some dairy products in recent days.

Taoiseach Leo Varadkar told a private meeting of Fine Gael’s parliamentary party meeting on Wednesday night that the message to the retail sector is that “grocery prices must come down if their input costs come down”.

Mr Varadkar said he has asked junior minister for enterprise Neale Richmond to bring forward the next meeting of the Retail Forum – which includes representative organisations and some major supermarkets – “to ensure price reductions are passed on to consumers”.

The forum was not due to meet again until June 22nd, but it is now to be convened “as soon as possible”, perhaps within the next week.

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The Irish Times understands that retailers are to be warned about the possibility of price caps if reduced costs are not passed on to customers. The Consumer Protection Act 2007 allows the government to set maximum prices for certain products in emergency situations.

Mr Varadkar told the meeting that it seems inflation peaked at about 10 per cent, is now at about 6 per cent and may average at 5 per cent this year.

[ Consumer watchdog urged to investigate ‘price gouging’ by supermarkets ]

Last week, Mr Richmond told the Dáil that the impact of inflation on the price of groceries is a “huge concern”. He said he intended to raise the issue at the next Retail Forum meeting.

Mr Richmond added: “It’s been made quite clear to retailers that whilst we know they are struggling, serious supports have been provided... if there are instances of gouging this Government won’t be found wanting in terms of utilising the Consumer Protection Act of 2007. But hopefully we should have no reason to do that.”

Separately on Wednesday the State’s consumer watchdog has been urged to investigate alleged “price gouging” by supermarkets amid the “extortionate” cost of groceries.

The cost of groceries last month was up 16.6 per cent on the same period last year, according to retail expert Kantar. The group’s data this year has consistently indicated consumers are paying in the region of an extra €1,000 per year on their shopping.

Speaking in the Dáil on Wednesday, Labour TD Ged Nash said the Government and the Competition and Consumer Protection Commission (CCPC) must work together to “stamp out greedflation” from major supermarket chains.

Tesco, Aldi, SuperValu and Lidl have all announced a reduction in the price of milk and butter in recent days, but Mr Nash described this as a “cynical move” taken to quell calls for investigation by the watchdog.

A spokeswoman for the CCPC said the group has received 32 “contacts” from the public in relation to increased prices in supermarkets this year up to April 14th. “Businesses are required to act independently in setting their prices,” she said. “The CCPC takes action against traders where we find evidence that a business or businesses have co-ordinated and not acted independently in setting their prices.”

The call for an investigation comes as new research from trade union Unite shows the “real median wage” in Ireland has fallen by €76 since the first quarter of 2021, from €976 per week to €900 per week. The data suggests workers have seen an average 4.2 per cent annual drop in real pay in the past year.

It also suggests the price of solid fuels such as coal has risen by nearly a third, and electricity by nearly two-thirds. Compared with prices a year ago, gas prices are now 86 per cent higher.