Groceries Order, should it be changed or scrapped. [Merged]

ishmael whale

The Muppet wrote:

Supermarkets can already undercut the small retailers so if price was the only factor in the equation these small retailers would be gone already.

I think this point pretty much says it all. If price was the only factor then Aldi and Lidl would hoover away all competition - be it corner shop or supermarket - even with the groceries order in place. We here a lot from industry about the need to abolish irrelevant regulation. This looks like a prime example.

spanner

i think we definately need to be careful not to end up like the USA and malmart were the drive to have dirt cheap consumer goods drove american owned businesses out of business. now malmart, if was a country would be the 8th largest importer of chinese goods. last christmas american toy companies were giving special discounts to toysrus because malmart had priced every other company out of the market.

i know everyone is giving out how much everything is in ireland but we are getting the best wages as well

gandalf

Threads merged.

MorningStar

Meh wrote:

Small corner shops don't compete on price anyway, they compete on convenience. A liter of milk in my local Londis already costs 50% more than in a supermarket (65c vs. ~€1), and they clearly haven't been priced out of the market yet.

People can reason out a certain amount of extra money for the convenience. The problem is if that increases more people won't and will always avoid the corner store. The other problem is modern petrol stations charge the extra margin yet are also benifiting form the economy of scale making supernormal profits while corner shops scrape a living.

**************IMPORTANT NOTE**********************

Something I only heard yesterday and was unaware of and has altered my view. The law only applies to Irish produce! So if you import a product you can sell it below cost. This is a bigger risk to Irish business than corner shops. Tesco can start importing milk and bread which could easily destroy indiginous businesses. Anybody know more about the actual law?

ishmael whale

spanner wrote:

i think we definately need to be careful not to end up like the USA and malmart were the drive to have dirt cheap consumer goods drove american owned businesses out of business. now malmart, if was a country would be the 8th largest importer of chinese goods. .....

But we tend to import our consumer goods anyway, and we tend to export what we produce, so the concept of pushing Irish businesses under doesn't really arise. Where there might be an Irish interest - say milk suppliers - they already have that great advantage that we're an island with a small domestic market so potential competitors have a natural barrier to entry. However, most Irish agricultural produce is destined for export anyway, so the idea that we have some vital interest at stake in protecting our small domestic market hardly bears scrutiny.

In any case its far more important for Irish firms to have access to international markets than to keep international firms out of the Irish market.

Xterminator

MorningStar wrote:

1. Tescos coming into Ireland has not really just given us competion.
2. The selction in a Tesco store is my opinion is definitly less than that of Quinnsworth. (Go in and try to buy a frozzen pizza in Tesco it either a Goodfellas or Tesco's own no other option).
3. They have also reduced the Irish products on their shelves causing the closure of long established businesses.
.

1. Untrue.
Tesco bought an existing (relatively struggling) chain, so they were not a new player so to speak. They renovated the existing stores and then went on to open new stores. They drove their market share up to number one, by providing decent stores with decent prices.They have since introduced online ordering, 24 hr shopping, Low cost selling of of clothes, dvds, music, electrical items etc to the retail supermarket here. Since the Lidl and Aldi stores started opening, Tesco have worked hard reducing the prices of groceries, and managed to lower both own brand and branded product prices!

They have raised the bar, and to me thats making others compete, and increasing competition.

2. Untrue. Not counting the fresh types, they stock

Tesco own brand
Tesco value brand
Goodfellas
Chicago
Gino Ginnelli
Green Isle (Gigantic)
Birds eye (pizzinis)
Heinz

Tesco stores have at least comparable, and usually bigger than superqinns freezer sections as a % of store space! When compared neither would compare to say Iceland! I put this down to store ethos!

Another thing about tesco, is you can ask online or in person to have a brand stocked, and they will consder it, so .. I think they provide what most customer want, or have demanded as long as its viable.

3. Untrue

From Tesco.ie

"Tesco now buys over É1.5 billion worth of goods per annum from some 800 Irish companies, over 80% of which are small to medium sized enterprises. Consequently, Tesco is the largest buyer of Irish food in the world. We have worked closely with many Irish companies, helping them to develop their export capability and business, selling their products to Tesco in Britain and elsewhere. Over É400 million-worth of Irish products per annum are now supplied to Tesco in Britain as exports.

Supplier companies have created 1,025 new jobs as a result of increased business from Tesco since 1998."


On your tesco receipt it is very easy to see whats irish and whats not!

PS I dont work for or have any connection to Tesco!


X

MrPudding

I heard the woman from the competition authority on the radio. She pointed out that the "below cost" selling ban only applied to a limited number of items. Most other things sold in the supermarkets are not covered by the restriction and so are free to be sold below cost. If the supermarkets want to give the consumer a good deal why don't they sell these items below cost?

I think what she was getting at was this. The supermarkets are being a little underhanded. They shout that they want to be able to sell stuff below cost price to give consumers a good deal. The majority of people, I was one of them until I heard this segment, think the ban applies to everything in the supermarket. They then think they are being ripped of and side with the supermarkets, then everyone tries to force the abolition of the rule and then the supermarkets fcuk everyone. In reality they can sell almost everything on their shelves below cost but mostly choose not to. This does give the indication that they are being less than honest with their reasons for wanting the ban lifted.

MrP

ishmael whale

MrPudding wrote:

I heard the woman from the competition authority on the radio. She pointed out that the "below cost" selling ban only applied to a limited number of items.

Just to clarify for purposes of the debate. It looks like the Order prohibits the below cost selling of any groceries apart from fresh fruit and veg, and fresh and frozen meat and fish. It applies to own brand goods. I assume the point that it doesn’t apply to, say, Tesco products sourced centrally in the UK is simply recognising the reality that the remit of the Irish legal system doesn’t extend outside the state.

http://www.odca.ie/cfmdocs/b_query/groc.cfm
‘One of the main provisions of the Restrictive Practices (Groceries) Order, 1987 is to prohibit the selling, or advertising for sale, of grocery goods (including alcoholic beverages) below the net invoice price or the net invoice price plus carriage, insurance or other costs if these are not on the invoice. Any discounts or rebates given by the supplier to the retailer cannot be taken into account unless they are on the invoice in cash terms. The Order also requires that written terms and conditions including supplementary terms, if any, be prepared and maintained by suppliers and that suppliers supply on these terms. The Order also prohibits the payment or receipt of "Hello Money".’

http://www.irishstatutebook.ie/ZZSI142Y1987.html
‘"grocery goods" means grocery goods for human consumption (excluding fresh fruit, fresh vegetables, fresh and frozen meat, fresh fish and frozen fish which has undergone no processing other than freezing with or without the addition of preservatives) and intoxicating liquors not for consumption on the premises and such household necessaries (other than foodstuffs) as are ordinarily sold in grocery shops, and includes grocery goods designated as "own label", "generic" or other similar description;’

MorningStar

Xterminator wrote:

1. Untrue.
Tesco bought an existing (relatively struggling) chain, so they were not a new player so to speak. They renovated the existing stores and then went on to open new stores. They drove their market share up to number one, by providing decent stores with decent prices.They have since introduced online ordering, 24 hr shopping, Low cost selling of of clothes, dvds, music, electrical items etc to the retail supermarket here. Since the Lidl and Aldi stores started opening, Tesco have worked hard reducing the prices of groceries, and managed to lower both own brand and branded product prices!

They have raised the bar, and to me thats making others compete, and increasing competition.

I didn't put it into point form so you have kind of altered the meaning but not too radically. First off Quinnsworth was not failing AFAIK. Tesco did not make Quinnsworth number one but bought an initial investment and kept pumping money into the new company. They got TAX breaks on capital investement as a venture so this gave them a big advantage. Tesco work hard at making a profit not reducing prices for the consumer.

Xterminator wrote:

2. Untrue. Not counting the fresh types, they stock

Tesco own brand
Tesco value brand
Goodfellas
Chicago
Gino Ginnelli
Green Isle (Gigantic)
Birds eye (pizzinis)
Heinz

Tesco stores have at least comparable, and usually bigger than superqinns freezer sections as a % of store space! When compared neither would compare to say Iceland! I put this down to store ethos!

Another thing about tesco, is you can ask online or in person to have a brand stocked, and they will consder it, so .. I think they provide what most customer want, or have demanded as long as its viable.

In fairness I did only take more local Tesco as an example. They only have two types of Frozzen pizza on the shelves. (they may also have had Weight Watchers ones too). If you looked on-line they may have it listed but they might not provide it. They also sell thier product spacing. End of isle placing is great for sell your products so the charge a rent to the producer. Don't confuse lip service with the reality of product on shelf. Your request will not make it to a buyer unless there are 10000 of you.

Xterminator wrote:

3. Untrue

From Tesco.ie

"Tesco now buys over É1.5 billion worth of goods per annum from some 800 Irish companies, over 80% of which are small to medium sized enterprises. Consequently, Tesco is the largest buyer of Irish food in the world. We have worked closely with many Irish companies, helping them to develop their export capability and business, selling their products to Tesco in Britain and elsewhere. Over É400 million-worth of Irish products per annum are now supplied to Tesco in Britain as exports.

Supplier companies have created 1,025 new jobs as a result of increased business from Tesco since 1998."

Now tesco facts won't have any bias at all. :rolleyes: What they don't tell you is they manner they deal with their suppliers and the effects on suppliers. Businesses have closed as a result of Tesco entry to Ireland. You could argue then they weren't healthy businesses anyway but they set suppliers against each other. Some businesses provided (still are) stock below their cost to keep the business alive. Some of the export goods to Britain are from these companies. As for hiring more staff people where did the staff come from ?

Xterminator wrote:

On your tesco receipt it is very easy to see whats irish and whats not!

PS I dont work for or have any connection to Tesco!


X

I don't work for any retail company or supplier but deal closely with many differernt types of retailers providing services (mostly in the UK). I get to read a lot of retail trade mags and this lets me to see the retail trends. I watch buyers at work. If you ever get the chance to see the BBC documentry about Mange Tou (sp?) you would be completly shocked. Workers on the farm believe Tesco is Heaven (actually said not implied).
Overall it is my opinion based on material i have read and seen, I don't have fact at had to point this all out but if you search about it on the net you will probably find the facts rather than go to Tesco as they will give you only their view. The anti-globablisation crowd are also a suspect but between the two you will be better informed.
Also note my view on the price restriction has changed slightly as there is a question about the law.