Ireland's Food & Drink Industry in Decline

About 2000 jobs have been lost in Ireland's food and drink industry since the start of this year and thousands more are currently at risk.

According to a new report, the competitive position of some firms has been "damaged by high business costs and a fall in the value of [the British] Pound Sterling against the Euro".

A key problem for the industry are massive energy costs, which are 20% higher in Ireland than the average paid anywhere across the EU. Industrial electricity prices here have increased 70% since 2001, and 36% across the EU.

More than 40% of Irish food exports go to Britain, but as the Pound Sterling has fallen in value by 30%, this reduces both turnover and profit of Ireland's food products sold to our nearest neighbour.

The report argues for new and special financial supports for Irish companies selling into the UK.

It claims that food and drink production and processing is Ireland's most important indigenous sector with 230,000 incomes directly depending on its future health and stability.

The report also points out that the top three grocery chains control more than 70% of the Irish market. Thus the bargaining power of retailers - especially the big ones - is much higher than that of suppliers.

It calls for the appointment of a 'Supermarket Ombudsman' and a code of practice to protect Irish food suppliers from what it terms as "unfair commercial practices".

Reacting to the report, Tánaiste and Minister for Enterprise, Trade & Employment Mary Coughlan (photo) said she had asked the national Competition Authority to investigate the real costs of doing business in Ireland.

That really says it all, plain and simple. She hasn't got a clue!

If she had any idea of her own department and the matter it deals with, she would well know what is going on in Ireland's shops and supermarkets.

I am no genius or minister, but I do not need to ask some faceless and unelected quango. Every time I go shopping I know within a few minutes who is making the money in Ireland and what is going on in the food industry.
Anyone can do the same, including Fianna Fáil ministers. But the problem with Mary Coughlan is that she has neither any personal interest in the matter, nor much intellectual capacity to deal with anything of importance.

Erin go broke, Paul Krugman would say (see guest column of April 23rd). But 'the Cow' Mary Coughlan never gives a damn, as long as she gets paid her high ministerial salary and is driven around the country like a fairy queen.

The rest of us are only here to pick up the bill and suffer...

The Emerald Islander

Energy Prices may remain unchanged after all

Price increases for the supply with gas and electricity, which had been expected in January, are now unlikely to go ahead. This is - after all the bad and gloomy news of this week - at last a positive turn of events.

Following significant falls in fossil fuel prices on the world markets, the Electricity Supply Board (ESB) and Bord Gáis have said that the price increases they both have sought from the Commission for Energy Regulation "may now not be necessary".

Yesterday the price for oil has reached a three-year low of $ 48.25 a barrel. Which means that crude oil is now trading at levels not seen since May 2005, and it costs almost $ 100 a barrel less than in July, when the price peaked at $ 147.27 per barrel. (A 'barrel', the old-fashioned unit of measurement still used by the US-dominated oil industry, equals 159 litres.)

Because of the global recession, the International Energy Agency (IEA) says that world oil demand will rise at its slowest pace for 23 years this year.

The price of natural gas has meanwhile fallen by 60% from the peak it reached earlier this year.

Bord Gáis sought the Energy Regulator's permission to increase its prices by 4.2% only three weeks ago, which would have added about €3 a month to the average household bill. (see my entry of November 4th)
This application for a price rise is still pending with the Regulator, who can accept or reject it. In light of the drastic price reductions on the international energy markets Bord Gáis should now withdraw the application without further delay.

The Emerald Islander

Irish Gas Prices to rise even further

Bord Gáis, Ireland's largest supplier of natural gas, is looking for a further increase of 4.2% on their gas bills from next year on.

The proposed increase is in the firm's submission document published today by the Commission for Energy Regulation (CER).

With the average domestic gas heating bill standing currently at € 910 per annum, the 4.2% increase would add another € 38 a year to the costs of home heating.

For small businesses Bord Gáis proposes a price increase of 2.8%.

The company was initially expected to ask for a rise of between 5% and 8%. However, while gas prices are still 50% higher than last year, they have fallen from recent record highs and Bord Gáis has taken the fall into account.

The company has said it will "continue to monitor gas prices in the coming weeks" and has stated that any continuing falls will be reflected in CER's final decision due out on December 1st.

These are all nice words from Bord Gáis, but the fact remains that our energy prices - already among the highest in the world - will rise even further. Every home heated with natural gas, which is by far more environmentally friendly than any other form of heating, will have to bear the brunt of the ever higher prices. In the current situation of economic recession and financial crisis this will be expecially hard for Irish families.

If the CER had even the slightest concerns for consumers, they would block this price rise, which comes on top of already two increases in gas prices this year. But the so-called 'Regulator' never does anything else but rubber-stamp more and more price hikes, for gas as well as electricity.
And both utilities are not something one can easily do without, which means that the consumers are trapped between an ever more greedy industry and a toothless 'Regulator'.

Would Bord Gáis be run and managed more efficiently, a lot of the money they want to raise now through these further price increases could be saved through ralitionalisation and better internal structuring. But that would be too much to expect from the formerly state-owned - and now partly privatised - Irish energy industry. They just muddle on as always, inefficient, arrogant and greedy, and take us - their customers - for granted.

Maybe it is time to have a mass demonstration of gas customers outside the Bord Gáis head office in Dublin, like we had several demonstrations of outraged citizens with other concerns recently outside the seat of our parliament at Leinster House.

The Emerald Islander

Reflections on the Weekend...

Having been away once more and thus unable to post entries on Friday, Saturday and Sunday, let me reflect briefly on the events that caught my attention and need a few words of comment.

Unbelievable Rise of Gas Prices

After the Electrical Supply Board (ESB), Ireland's largest supplier of electricity, announced a rise of consumer prices by 17.5% for August (see my entry from July 22nd), households and small businesses are now also facing a 20% increase in gas prices this autumn.
The 'Energy Regulator' has given the country's largest gas company Bord Gáis permission to increase their prices by one fifth from September 1st. Together with the rise of electricity prices this is an unbelievable act of daylight robbery, committed against a large number of Irish people and sanctioned quite happily by the government agency that is supposed to control the industry.

The Commission for Energy Regulation, as it is officially called, has also warned that a further increase of energy prices will be needed in January 2009, due to the sharp rise in gas prices on international markets over the past year. The regulator says that Ireland imports 90% of its gas from the UK, where the wholesale price has almost doubled in the past twelve months. The two price rises are apparently "an attempt to cushion the immediate consequences for customers".

How cynical is such a statement, at a time when prices for almost everything are spinning out of control and large companies squeeze consumers more and more, while incomes for ordinary working people are not rising in equal measure and many people are losing their jobs due to the onset of recession in Ireland.

The Society of St. Vincent de Paul says it is "very concerned at the price increase, which will impact hardest on the most vulnerable". As usual the poorest are ripped off by large and weathy companies, whose profits have risen steadily and are passed on to their shareholders, many of which are not Irish.
The society expressed the hope that Bord Gáis will not include the Standing Charge in their price increase. It also called on the Minister for Social and Family Affairs, Mary Hanafin, to tackle the issue of fuel poverty among those depending on social welfare payments.

Meanwhile Age Action has called on the government and the energy providers to "take steps to ensure that vulnerable older people are protected from rising fuel costs".
"This increase along with the recent increases in the cost of oil and electricity leaves many older people praying for a mild winter. They know if the winter is hash they will suffer", said Eamon Timmins of Age Action.

As things stand now, it is time for the government to consider active price controls for energy as well as the most basic and common food items. Otherwise we are running the risk to create in a very short time a large class of poverty-stricken people who are no longer able to afford the most basic items needed to survive and live a decent life. Apart from immense hardship this would cause for many, it would also inevitably lead to a rise in crime and disorder and all gains we have made during the 'Celtic Tiger' boom could disappear into thin air in a very short time.

The annual Climbing of Croagh Patrick

Yesterday, on Reek Sunday - the last Sunday in July - more than 25,000 Catholic pilgrims assembled in County Mayo for the annual mass climbing of Croagh Patrick, Ireland's 'holy mountain', which is situated 8 km from Westport.
Despite the drastic decline of the Catholic Church in Ireland, this traditional spectacle, which has its origins in the dark ages, still attracts large numbers of believers, and a good number of them climb the 764 metre high rocky mountain barefoot "to atone for their sins".

Under the leadership of the Catholic Archbishop of Tuam, Michael Neary, eleven Masses were celebrated on the mountain during the day, and hundreds of members of ambulance corps and mountain rescue teams were in attendance to look after people who suffered from exhaustion or injured themselves on the climb.
Thanks to their efforts there have not been any deaths for some years during the event, but in the past numerous people died during the irresponsible religious mass hysteria.

Irishman sentenced in Greece for starting a Brush Fire

Meanwhile a court on the Greek island of Crete has sentenced a 20-year-old Irishman to a suspended sentence of three months in prison for starting a fire by negligence.

The unnamed Irish tourist burned 500 square miles of brush and olive trees in Hersonissos, in the east of the island, on Friday by setting dry brush alight, the local fire department said. He was arrested by firemen soon afterwards.

Hundreds of fires have broken out in Greece this summer, many of them due to negligence and assisted by dry weather conditions. And often tourists, who don't know the country and have no understanding of the local conditions who are responsible.

Last year devastating forest fires left 77 people dead and burned 270,000 hectares of forest and agricultural land in Greece.

The Emerald Islander

Power tends to corrupt

As so often in Ireland the bad weather lasted only one day. When I went out this morning for my usual round of Jogging it was not only calm and dry, there was actually bright sunshine and a clear blue sky with not a single cloud to see. Such is always a joyful experience and makes my morning exercise even more successful.

However, there hangs a cloud of thought over this part of the world, which results from an event that made the news yesterday and continues to be discussed on the British airwaves.
On one of the coldest and most miserable days of the year, one of the largest suppliers of energy in Britain, called N-Power (these days large companies have ever more anonymous and meaningless names), announced an increase in consumer prices for electricity and gas of more than 17% on average (and up to 27% in certain areas).
This came only a few days after Britain's railway companies (all private now, after the last Conservative government broke up the well-functioning national railway group British Rail and fragmented it in the most ridiculous and shambolic way) raised the prices for their tickets by 4.8% on average (and up to 8.7% for certain fares).

Consumer groups have issued statements of protest, there are interviews on the BBC, and a couple of politicians did raise the question of need, fairness and even legality. But this is as far as such things go. No one, and certainly not the British government (always the capitalists' best friend), will stop N-Power from charging ordinary British consumers until they bleed dry. For large industrial customers there are of course the so-called "heavy user tariffs", which means that those who use a lot of energy are getting it cheap, while those who use a normal or small amount are massively overcharged for it.
This happens despite a growing general awareness of global warming, carbon footprints and energy misuse. And despite a clear statement of Britain's Prime Minister Gordon Brown that the UK would be reducing the amount of energy used, in order to make a real contribution to save the planet.

Well, maybe this is what is really behind the announcement. People are beginning to understand the environment and save energy, so big utility companies like N-Power (which is, by the way, now owned by the large German energy group RWE) make less money from selling energy. And to compensate for the losses by volume they are now raising the prices per unit.
There is absolute no proper reason or justification for such a drastic increase in energy prices, several times the rate of inflation! But who is going to stop it? These days all British utility companies are completely privatised and care a lot more for their share holders and directors than for customers. They are like the industry's private herd of cows, to be milked as much and as often as it pleases the bosses. Ordinary people have no rights, and no ways to avoid this shameless exploitation of truly Victorian dimensions.

We all need electricity, as it is practically impossible to live and function without it. So the likes of N-Power have consumers over a barrel, in particular as no politician or regulator will come to their aid. All people can do is pay and pay, and should they run out of money, the energy companies will disconnect them and - to add insult to injury - even charge a hefty extra fee for doing that!

Here in Ireland things are not much better, and the price for electricity rises and rises just as our main national supplier ESB (still partly controlled by the government, but partly in private hands now as well) pleases. Subsequently Ireland has one of the highest energy prices in Europe, which makes life for ordinary people increasingly difficult and has even already some negative influence on the growth of our national economy.

What kind of world have we created for us and our children? Is this really how we want to live in the 21st century?! Handing the control over our lives to governments, police, intelligence services and greedy private utility companies? Where are our Human and Civil Rights? And where is the Common Sense that is supposed to guide society?

Lord Acton, the great British historian and author of many well-known quotations, would be livid if he were still alive. Yesterday, when I heard of the shameless greed of N-Power, I thought immediately of one of his most famous statements, which he made 120 years ago in a letter to Bishop Creighton. It is so fitting that it could be the motto of the privatised energy industry, and especially of N-Power.
"Power tends to corrupt," Lord Acton wrote, "and absolute power corrupts absolutely."

With this I rest my case, and remain for today

The Emerald Islander