Consumers’ group demands answers as grocery prices soar at treble rate of inflation
The conclusion of a Competition and Consumer Protection Competition (CCPC) probe into supermarkets came at the same time as a breakdown of inflation figures found a surge in the cost of fish, meat, milk, butter and cheese in the last year.
Cod fillets are now almost €5 more expensive per kilogram than they were a year ago.
Food prices are surging at almost three times the rate of general inflation, according to July inflation figures from the Central Statistics Office (CSO).
Grocery prices here are up 27pc since June 2021, the competition body found.
Chairman of the voluntary Consumers’ Association of Ireland, Michael Kilcoyne said he was taken aback at the competition watchdog’s conclusion that there is no price gouging by Irish supermarkets of their customers.
“I am dismayed that that is the conclusion. If it is not supermarkets that are ripping us off, then it is up to the Competition and Consumer Protection Commission to find out who is,” Mr Kilcoyne said.
The CCPC said food price inflation was putting massive pressure on household budgets, but it found that supermarkets here are not making any higher profits than those in other countries.
CCPC experts said it was not in a position to investigate profit margins along the food supply chain, including buyer power and margins, which are part of the role for the new Agri Food Regulator.
However, the new Agri Food Regulator is seeking extra powers from the Government so it can find out which firms are making the biggest profits in the food supply chain.
Farmers have denied they are creaming off huge profits despite farm-gate cattle prices being up 50pc in the last year.
The CCPC said prices paid to farmers have shot up in the last year. They were up by 19pc in the first three months of the year, the highest rise in agricultural output prices in the EU.
A pound of butter is nearly at the €5 mark
This is compared with 2.6pc on average in the EU.
Farmers say environmental regulations, high energy prices and fuel taxes all contribute to rising food prices.
And there has been a huge fall in the size of national animal herds, despite growing demand for meat.
This, and the fact that 90pc of beef produced in this country is exported, is part of the reason for the surge in food prices, experts said.
Experts in the competition watchdog found that retailers are selling some food items at a loss out of fear that they will turn away shoppers if they charge the full increase they are being charged by food processors.
The profit margins for Irish supermarkets align closely with those observed in the UK and other parts of Europe
CCPC analysists found that the profit margins of Tesco, Aldi and Musgrave in this market are between 1pc and 4pc, considered to be modest compared with other sectors.
Dunnes Stores and Lidl do not publish financial results.
“The profit margins for Irish supermarkets align closely with those observed in the UK and other parts of Europe,” the report stated.
Both Sainsbury’s and Asda reported profit margins of approximately 3pc for the 2023/2024 period, the CCPC said.
The profit margins for Irish supermarkets are much lower than those of some producers within the market.
CCPC experts found that Unilever – whose brands include Dove, Hellmann’s, Knorr, Lipton and Sunlight – reported a profit margin of 18.4pc last year.
Profit margins of Tesco are between 1pc and 4pc, considered to be modest compared with other sectors
Kerry Group, an international leader in taste and nutrition products, maintained a margin of 11.2pc in 2024.
Glanbia, whose brands include energy bars, dairy products and dairy-free products, had a profit margin of 14.4pc last year.
Separate CSO inflation figures show cod fillets now cost €25.26 per kg. This is up by €4.89 in the past year, a rise of 24pc.
Diced beef prices have jumped by a similar percentage. It now costs €13.39 per kg, a rise of €2.62 when compared with the price in supermarkets and butchers a year ago.
Butter is now €1.08 a pound more expensive than last year. A pound of butter is now €4.87, fast-approaching the €5 mark.
Milk is also up in price, as farm-gate prices have surged in the last year.
Two litres of full-fat milk now costs €2.47, a rise of 28c since July last year. This is a 13pc rise.
Cheddar cheese has shot up by 24pc in cost.
Buying a kilogram of cheddar now costs €11.19, a rise of 70c per kg.
Overall inflation was recorded at 1.7pc for July, down from 1.8pc in June.
But food and non-alcoholic beverages was the category to record the largest increase in the 12 months to July, up by 4.7pc over the 12-month period, putting massive pressure on family budgets.
This article was amended on August 8 at 9.50am to clarify factors behind rising food prices
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