In the early stages of the horsemeat scandal, the Government announced that a statutory code of conduct to regulate the retail sector and eliminate practices such as “hello money” would be published within six weeks. While the legislation is awaited, government representatives have indicated that publication is imminent. A Parliamentary Committee recently met with significant retailers in Ireland to discuss the perceived lack of a level playing pitch for smaller suppliers.

This legislation has been long awaited following earlier public consultation processes which led to the publication of draft codes in 2009 and 2011.

The code of conduct is expected to include:

  • The appointment of an ombudsman to arbitrate in disputes between consumers, retailers and suppliers
  • The abolition of so-called ‘hello money’ in the industry
  • Measures to ensure greater transparency in the area of food labelling, in particular in light of the recent horsemeat scandal

Ireland trails behind the UK in this area, where an adjudicator for the groceries code has been appointed with responsibility for investigating alleged breaches of the code and power to fine retailers found guilty of breaches.

The proposed legislation will be widely welcomed by farmers and suppliers who have been calling for a code of practice and an ombudsman for supermarkets for several years, claiming that supermarket chains are driving down prices and are asking producers for payments to put or keep their produce on shelves or to contribute to the opening of new outlets.

However, many retailers argue that a statutory code would result in retailers sourcing more of their stock overseas, extra costs being imposed, and could lead to job losses in the retail and wholesale sectors. They argue further that there is a risk that the new rules and regulations would act as barriers to new suppliers entering the market.

It is clear that the Minister will face a delicate balancing exercise in marrying the competing interests of the retailers, suppliers and consumers within the parameters of the new code.