Download presentation
Presentation is loading. Please wait.
1
Competition Issues in the Agri-Food Sector Monday 10 th April 2006 Declan Purcell Director, Advocacy Division The Competition Authority
2
Enforcement of EU and Irish Law Article 81/Section 4 on agreements, especially cartels Article 82/Section 5 on abuse of dominance Mergers Substantial lessening of competition in the relevant market Promotion of Competition Tackling State restrictions on competition Compliance with competition law
3
Work in Agriculture & Food Consolidation in food processing sector Animal Medicines Food Retailing – the Groceries Order Agricultural inputs, farmers as consumers Animal Medicines Veterinary Services Fuel, other professions, banking, insurance, telecoms
4
Issue 1 - Consolidation Arguments for consolidation Scale Efficiency Competition Policy and consolidation Uses an effects-based approach Protects consumers from adverse market effects Strongly supports competition and new entry
5
Consolidation - cases Beef Processing BIDS Case (and others) challenged Dawn-Galtee Merger cleared Monaghan Mushrooms (Merger) Case cleared
6
Consolidation Summary Key Issue : Market-led rationalisation vs Forced or orchestrated action Key Test : When efficiencies and effects on competition are added up, will prices to consumers rise
7
Issue 2 - Animal Medicines August 2005 proposals controversial, concerns expressed on both supply and demand side Minister’s October 2005 announcement welcome – Minister to await the outcome of EU exemption negotiations before deciding finally re who can write prescriptions In the meantime, vets to issue separate invoices for (a) prescribing, (b) dispensing Licensed merchants can supply some prescribed medicines from January 2007 Prescription life extended from 1 to 6 months
8
But still some concerns The proposed regime is still over-restrictive Concerns about confining the writing of prescriptions to vets. Shouldn’t concentrate monopoly power like this in one group of hands EU Directive doesn’t require this – in fact, specifically leaves it open to MS to allow others to prescribe Not really an answer to rely on some future, uncertain, unproven EU exemption regime
9
Other concerns Requiring vets to prescribe 2 or 3 brands not the answer – even requiring two or three brands is potentially anti-competitive why not ingredient-based ? or more generics ? Animal v. human medicines – humans – more liberal prescribing rules planned animals - more restrictive prescribing rules planned
10
Issue 3 – Food Retailing and Distribution Farm prices low and stable But prices to consumers higher than they need to be So what (or where) is the problem ? In the food distribution sector ? In food retailing ?
11
The Groceries Order Competition Authority focused on one aspect of the problem – the Groceries Order Introduced 1987 Prohibited the selling, or advertising for sale, of grocery goods below net invoice price [in other words, prohibited the passing on discounts to consumers]
12
The Groceries Order Applied to - Grocery goods for human consumption Intoxicating liquor not for consumption on the premises Household necessaries other than foodstuffs Did not apply to – Fresh fruit and vegetables Fresh and frozen meat, Fresh and frozen fish
13
Grocery prices Ireland is one of the most expensive places to buy food in the Eurozone. The cost of food in Ireland has risen while prices in other retail sectors have fallen. Higher rate of increase in the price of items covered by the Order. Farm gate prices are not to blame, they have remained relatively stable. Bottom line – Groceries Order cost average householder up to €500 a year.
14
Groceries Order now gone Repealed by the Competition (Amendment) Act 2006 But some prohibitions remain……………. …..any attempt to force resale price maintenance……. ………discriminatory treatment of suppliers…………….. …………….having to pay for advertising / display…….. ……..…………..hello money All subject to a “Competition Test” in each case.
15
Stakeholders can be pro- active Respect and use competition law – Work within competition rules to attain efficiencies – Use competition law to raise objections, e.g. mergers and dominant firms – Continue to support competition and culture of regulatory reform – Use Competition Authority to assist new consumer focus
16
Competition Issues in the Agri-Food Sector Monday 10 th April 2006 Declan Purcell Director, Advocacy Division The Competition Authority
Similar presentations
© 2025 SlidePlayer.com. Inc.
All rights reserved.