Multiples in the Irish Republic have been accused of “behaving like characters from the Sopranos” in their treatment of producers and suppliers.
According to the leader of the Irish Labour Party, Eamon Gilmore, “powerful, dominant players such as Tesco are extorting huge sums of money from suppliers in exchange for the privilege of getting their products on to supermarket shelves”. Gilmore slammed the behaviour as “outrageous” and “the kind of thing you would expect to see in the TV drama, The Sopranos”.
Gilmore, whose party is tipped to share power in the next Irish government, claimed that such demands were creating problems for stakeholders in the retail sector. “It’s bad for suppliers, including farmers, who cannot get their produce on to the shelves of major supermarkets,” he said. “It’s bad for consumers, whose choice is reduced. It must stop, although I’m not convinced that the code of practice being proposed by the department of enterprise is sufficient to stop it.”
The Labour leader said that his party’s insistence on controlling the behaviour of supermarket multiples did not mean it was against the existence of large-scale
players. “For many consumers, large supermarkets can provide value and convenience, with economies of scale allowing them to provide cheaper prices, and the best of luck to them,” he said.
Gilmore acknowledged that with agriculture and food, the free market could be good for producers and consumers. But he warned: “Left to do what it pleases, the free market can be bad for both. Business ceases to be sustainable when it begins to suck the life out of farm families and rural communities.”
Tesco, which has been accused of demanding payments of up to €500,000 (£449,000) from Irish suppliers to stock their products, declined to respond to the Gilmore broadside. His criticism followed publication of a report by a parliamentary committee that also accused multiples of using their market power to impose unfair conditions on suppliers and producers.
The report, backed by members of the three main parties - Fianna Fail, Fine Gael and Labour - maintained that demands for ‘hello money’ and other secret payments from suppliers are “common practice”, and that multiples in the Irish market are making up to three times the profits that they make elsewhere.
The report called for legislative action by government to ensure “transparency, fairness and equality” in the sector.
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