A Code of Practice for Grocery Goods Undertakings and An Ombudsman: How To Do A Lot of Harm By Trying To Do A Little Good. WP320. October 2009

The Department of Enterprise, Trade and Employment in its August 2009 Consultation Paper, Code of Practice for Grocery Goods Undertakings, argues that a Code governing grocery supplier/retailer relations, enforced by an Ombudsman, should be introduced. The Code constrains the behaviour of the retailer with respect to certain practices that, for example, shift risk from the retailer to the supplier as well as those result in unexpected costs to suppliers. The rationale for the Code appears to be that due to the devaluation of sterling, combined with the recession, retailers are able to put increased pressure on local suppliers for lower prices, which in turn squeezes suppliers’ margins. The paper argues that the Consultation Paper does not present a sound rationale for the Code, in reality the Code is a form of protectionism occasioned by the inflow of lower priced imports. Local suppliers should adapt through developing better products and becoming more efficient, rather than seeking shelter from market forces. The impact of the Code will likely be to lead to: higher consumer prices lowering consumer welfare and thus inconsistent with the declared aim of the Code; increased costs of doing business with local suppliers thus leading to an incentive for retailers to use more imports; and, perhaps, a less competitive grocery sector. It is argued that the Consultation Paper should be withdrawn and reissued, but in a manner consistent with the government’s better regulation agenda which is currently ignored. To the extent that the issue of concern is excessive buyer power of retailers then that should be addressed directly: by liberalising the Retail Planning Guidelines as the Competition Authority has been arguing for sometime; and/or sponsoring entry of new retailers; and/or amending competition law, if a problem exists and can be demonstrated to exist, but retain the competition test. The answer, based on the evidence presented in the Consultation Paper, is not the Code

THE RECESSION, BUDGETS, COMPETITION, AND REGULATION: SHOULD THE STATE SUPPLY BESPOKE PROTECTION? RESEARCH SERIES NUMBER 12 OCTOBER 2009

Recessions are harsh. Demand declines. Firms shed labour, reduce output or file for bankruptcy. Pressure mounts to reduce prices and increase productivity. Returns decline; margins are squeezed; dividends are suspended. Unemployment increases. Firms seek to delay payments to suppliers, while simultaneously demanding suppliers reduce input prices and extend credit. Carefully assembled workforce teams are broken up. New products and innovations are put on hold. Competition is characterised as cut-throat, destructive and excessive. Faith in markets begins to be questioned

A Code of Practice for Grocery Goods Undertakings and an Ombudsman: How to Do a Lot of Harm by Trying to Do a Little Good

The Department of Enterprise, Trade and Employment in its August 2009 Consultation Paper, Code of Practice for Grocery Goods Undertakings, argues that a Code governing grocery supplier/retailer relations, enforced by an Ombudsman, should be introduced. The Code constrains the behaviour of the retailer with respect to certain practices that, for example, shift risk from the retailer to the supplier as well as those that result in unexpected costs to suppliers. The rationale for the Code appears to be that due to the devaluation of sterling, combined with the recession, retailers are able to put increased pressure on local suppliers for lower prices, which in turn squeezes suppliers’ margins. The paper argues that the Consultation Paper does not present a sound rationale for the Code, in reality the Code is a form of protectionism occasioned by the inflow of lower priced imports. Local suppliers should adapt through developing better products and becoming more efficient, rather than seeking shelter from market forces. The impact of the Code will likely be to lead to: higher consumer prices lowering consumer welfare and thus inconsistent with the declared aim of the Code; increased costs of doing business with local suppliers thus leading to an incentive for retailers to use more imports; and, perhaps, a less competitive grocery sector. It is argued that the Consultation Paper should be withdrawn and reissued, but in a manner consistent with the government’s better regulation agenda which is currently ignored. To the extent that the issue of concern is excessive buyer power of retailers then that should be addressed directly: by liberalising the Retail Planning Guidelines as the Competition Authority has been arguing for sometime; and/or sponsoring entry of new retailers; and/or amending competition law, if a problem exists and can be demonstrated to exist, but retain the competition test. The answer, based on the evidence presented in the Consultation Paper, is not the Code.

Economic Regulation: Recentralisation of Power or Improved Quality of Regulation?

The October 2009 Government Statement on Economic Regulation proposes a number of sensible reforms that are likely to improve regulatory performance in energy, airports, telecommunications, postal services and transport. However, the Government Statement also proposes to reduce the independence of regulators by holding them to account through a whole series of additional mechanisms, some of which are informal and lack transparency, while at the same time instructing regulators to take into account evolving/current – possible transient – priorities. There are good reasons for preserving and strengthening rather than undermining regulatory independence. For example, it facilitates investment in long-lived assets with a large element of sunk or irrecoverable investment, a common characteristic of network sectors. The Government Statement’s unexplained move to reduce regulators’ independence finds no support in either the government commissioned background report prepared by the Economic Intelligence Unit, Review of the Regulatory Environment in Ireland, or recent European Union legislation on energy and telecommunications regulation. Indeed, these sources are strongly in favour of regulatory independence. Two, not necessarily mutually exclusive explanations, for reducing regulatory independence are discussed: to remove an anomaly in the Irish political system; and, to assist in the delivery of social partnership. The paper concludes by arguing that some thought might be given to public consultation of the reforms in the Government Statement prior to further implementation.

How impact fees and local planning regulation can influence deployment of telecoms infrastructure

This paper examines how local government planning regulations and charges affect the deployment of telecommunications infrastructure. We explore the economic rationale for local government regulation of such infrastructure, which we suggest should be based on managing negative externalities. Using data from Ireland, we find that the observed geographical pattern of impact fees is inconsistent with the economic rationale for them. A simple econometric model of the number of telecoms masts in each country also suggests that the level of impact fees is negatively associated with mast deployment. This paper also examines other regulatory factors that affect the provision of new infrastructure. We find wide regional variation in these regulations but are unableto quantify their impact on infrastructure provision. Such regulatory complexity places extra compliance burdens on private operators, which may in turn distort the level and regional pattern of network investment. We suggest further regional harmonisation of development policy towards telecoms infrastructure to avoid exacerbating regional disparities in rollout of services. --Land use regulation,telecommunications infrastructure investment,impact fees

The Irish Banking Crisis: Regulatory and Financial Stability Policy

This report to the Irish Minister for Finance by the Governor of the Central Bank describes the the performance of the respective functions of the Central Bank and Financial Regulator in the period 2003-8 in order to arrive at a fuller understanding of the root causes of the systemic failures that led to the need for extraordinary support from the State to the Irish banking system.Ireland banking crisis; financial crises; financial stability policy

Guaranteeing Input Tracking For Constrained Systems: Theory and Application to Demand Response

A method for certifying exact input trackability for constrained discrete time linear systems is introduced in this paper. A signal is assumed to be drawn from a reference set and the system must track this signal with a linear combination of its inputs. Using methods inspired from robust model predictive control, the proposed approach certifies the ability of a system to track any reference drawn from a polytopic set on a finite time horizon by solving a linear program. Optimization over a parameterization of the set of reference signals is discussed, and particular instances of parameterization of this set that result in a convex program are identified, allowing one to find the largest set of trackable signals of some class. Infinite horizon feasibility of the methods proposed is obtained through use of invariant sets, and an implicit description of such an invariant set is proposed. These results are tailored for the application of power consumption tracking for loads, where the operator of the load needs to certify in advance his ability to fulfill some requirement set by the network operator. An example of a building heating system illustrates the results.Comment: Technical Not

Revising merger guidelines: Lessons from the Irish experience

Competition authorities typically issue Merger Guidelines setting out the framework within which merger assessment is conducted. Ireland is no exception. The Competition Authority is currently in the process of revising its 2002 Guidelines. In this paper we not only comment on the procedure that is being used to revise these Guidelines as well as the substance of the proposed revisions to the Guidelines, but also draw some wider lessons that might be of assistance to other competition authorities, particularly smaller competition authorities, in revising their Guidelines. The lessons include: carefully distinguishing between proposals for revising the Guidelines that incorporate existing merger assessment custom and proposals that mark a significant departure from current Guidelines as well as existing custom and practice. Proposals for revising the Guidelines, particularly when referring to existing custom and practice, should be specific rather than general; and, if multijurisdictional mergers are important particular attention should be paid to the Guidelines in jurisdictions that are commonly included in such multijurisdictional mergers

The Impact of Free GP Care on the Utilisation of GP Services in Ireland: An Evaluation of Different Approaches. ESRI Working Paper No. 534, June 2016

The successful implementation of free GP care for all private patients in Ireland requires an estimate of the likely change in the number of GP visits occasioned by this policy so as: (i) to set the capitation fee; and (ii) to ensure adequate supply of GPs is in place. The paper examines two methodologies to derive such estimates: retrospective patient self-reporting or recall (e.g. Growing Up in Ireland, The Irish Longitudinal Study on Ageing); and, GP practice records. Estimates based on six GP practices by Behan (2013, 2014) substantial overestimate of the likely impact of free GP care. McGovern’s (2015) more recent estimates for the HSE, based on patient recall, used in forecasting future demand for GPs to 2025 also appear to be biased upward. The underlying studies, assumptions and papers are not, however, cited. This should be corrected. A proper debate and discussion can then take place concerning the optimal phasing in of free GP care

IS A CODE OF PRACTICE NEEDED FOR THE GROCERY TRADE? ESRI Research Bulletin 2010/1/2

The introduction of a Code governing grocery supplier/retailer relations, enforced by an Ombudsman, is favoured by the Department of Enterprise, Trade and Employment in its Consultation Paper, Code of Practice for Grocery Goods Undertakings (August 2009). A recent analysis of the issues† questions the need for a Code, and suggests that the issues which have prompted calls for such a Code would be better dealt with in the context of the government’s “better regulation” agenda and the provisions of the Competition Act as amended in 2006