“The retailers job is to sell what customers want – not to incubate small businesses.”

Understandably, the Multiples prefer to be offered solutions as opposed to problems. They don’t have the time, resources or even expertise to take a small “start-up” company, in whatever field, through the minefield of becoming a successful enterprise – nor should they be expected to; after all, their core activity is retailing. There are plenty of bodies that can and should brush-up on their ‘here & now’ knowledge of retailers’ expectations and support Irish SMEs and start-ups.

I recently came across the case of a group of individual growers (not manufacturers, but the same rules and challenges apply) that grew non- competing and complimentary products. They were astounded that certain retailers were not interested in talking to them seriously, as individuals. The solution was obvious. Firstly, they needed to come together and speak as one – their already fragmented position mitigated against their success. They then needed to create a consistent supply; despite the seasonality of their products, they needed to demonstrate to the retailers that the stores would have permanent, year-round access to product. Empty shelves help no-one and is among the quickest ways of getting delisted. Further, the growers needed to address their logistics and back-office expertise. For example, EDI (Electronic Data Interchange) is a prerequisite in order capture and record sales and is therefore a must in dealing with supermarkets.

It makes sense that if one should offer a supermarket a solution, to what the retailer could be convinced is a “gap” in the market, the retailer will take the supplier seriously. (And if they don’t recognise it as an opportunity, it’s down to the supplier to provide a compelling case as to why it is an opportunity – the “win-win-win” scenario. The third “win” being for the consumer…lest he/she be forgotten).

The retailer’s obligation to the local economy

Retailers have an obligation to support Irish growers, producers, processors and manufacturers. This does not mean supplying exclusively Irish products (Ireland has been proud of its position as part of the “Global Economy” and I don’t think that position should shift greatly as we would still like the opportunity to sell our unique products into other markets]. But it does mean supporting a higher percentage of Irish products than they do currently. They should do so willingly in acknowledgement of the privilege afforded to them of participating in that particular economy – take a minute to think that one through … is it not too much to ask that retailers respect the country they are operating? They would do so in Tokyo or Tehran, so why not in Dublin?

The retailer’s obligation is clear. But Irish food businesses must play their part in making it easier for the retailers to meet that obligation.

It has been widely said that Irish consumers should buy Irish food – some consumers suspect that it’s a desperate attempt by some unscrupulous peddlers to wrap themselves in a (national) flag of convenience. Supporting Irish primary producers (Irish farmers) should be the first point in motivational purchasing decisions from every Irish manufacturer’s perspective. However, the primary producer should be producing foods of the highest quality whilst embracing best practice. This is fundamental. If Irish food manufacturers fail to source locally, then why should consumers bother to buy from them? The only argument for Irish manufacturers sourcing outside this jurisdiction should be on the grounds of unavailability; price alone should not be a barrier and superior quality should be a prerequisite.

The Power of the Consumer:

If there is a broad acceptance of these principles of trading internally and trading fairly, the Irish consumer must exercise their influence – engaging more with Irish manufacturers and becoming more vocal at supermarket level by insisting on products that meet the following simple criteria:

- Irish manufactured
- Primary ingredient is Irish
- Best quality

If the product does not tick all boxes, then the question should be asked, “Why not?”

As consumers, we have the power to effect real change: the recently launched Love Irish Food campaign calculates that if just one third of Irish households spent only €1.67 more on Irish purchases each week, an additional €35 million would be generated for the Irish economy.

“Casualties of the collapse are not simply statistics; they are our mothers, fathers, sons, daughters, partners. Not only is their loss of income a personal catastrophe; it’s a national issue.”

The Price Issue:

Undoubtedly price is a factor in influencing the consumer’s purchasing habits and this is how it should be. Now more than ever, producers and manufacturers cannot rely on the consumer’s sense of patriotism alone. It is incumbent on all those involved in food production to keep prices keen and this includes farmers, manufacturers, retailers and government. But buying Irish has advantages for the whole population. Simply put, it’s in our economic interest to support home produced goods. Not to prop up farmers and food manufacturers but to secure jobs for all of us. If the property bubble has taught us anything, it’s the way in which we are all connected and the far reaching consequences of the collapse of a single sector within our economy. (It’s not just builders who have lost their jobs recently – it’s estate agents, solicitors, mortgage brokers, printers, alarm installers, plumbers, electricians, carpenters, advertisers, publishers, retailers, materials manufacturers and all of the thousands of people they employ). These casualties of the collapse are not simply statistics. They are our mothers, fathers, sons, daughters, partners. Not only is their loss of income a personal catastrophe; it’s a national issue by way of a further drain on the state’s already depleted resources via an increase in the social welfare bill.

Why is it important to support Irish Farmers?

If a country supports their local farmers, not only will it retain finances in the country but it is the first step to adding efficiencies to the country. Coming from a population base of circa 4.2 million, the Republic of Ireland lacks the population base to gain efficiencies that all other European countries have (apart possibly from Luxembourg) and indigenous manufacturers are therefore more dependent of the Irish consumer over indexing (purchasing a higher percentage) of Irish produced foods. Lack of population mass adds considerable cost to every kg of food sold in the Republic and in order to attempt to offset these unique costs, Irish manufacturers must do what they have to do to maintain the loyalty of their Irish consumer. Without the consumer’s support, Irish food manufacturers will become unviable and ultimately insolvent. Needless to say that Ireland would lose on many fronts, The primary producer would lose an option for route to market, the staff of the manufacturer would lose their jobs (instead of being a positive on the exchequer the numbers would shift to being a further drain on Exchequer funds through social welfare payments), the Irish Consumer would lose further future food security, the country would lose future potential exports (every company in my opinion, has an obligation to export and draw in necessary “foreign capital”). Ireland would end up worse than Greece, insofar as we would be overly dependent on our neighbour for not only our food but also for our food security.

The trickle up effect…

Rural towns thrive on a prosperous agricultural hinterland. Geographical larger centres thrive on a flow of money into them from rural towns. The larger centres feed the capital – it’s all the trickle-up effect. Many would be dismissive of the argument that when farmers stop spending money, then the country grinds to a halt. In recent times the impact of farmers on the economy as a whole was considered by some as negligible, as there were bigger and more lucrative avenues to be pursued, i.e. property and all things related. Property is off the agenda for the next decade. So we need to improve what we have, dust ourselves down and reboot the economy. We need a vibrant internal market – I accept based on a population of 4.2million that this is not wholly achievable but we have to make the best of what we have and a start needs to be made somewhere. Rather than farmers are not spending money because they too have little or no confidence in their immediate future viability. The majority of farmers have also taken a beating on their income and earning potential of their farming units, the money has stopped flowing upwards.

Irish Food Manufacturers need to trade fairly with their Irish farming suppliers. Farmers must undertake to not only adhere to the best possible standards of food production but to surpass them in a manner that should do so in as efficient a manner as possible. Irish farmers should be producers of all of our country’s power (electrical needs). If the Farm Organisations want to champion the Irish Farmer, they should likewise attempt to champion the Irish Consumer. The Farm organisations should therefore establish a communication forum and consumer panel to listen to Irish Consumers and their needs.

For the few that have oil, i.e. those few countries that sit on massive reserves of the black stuff, it does not always lead to nirvana – show me a Garden of Eden story based on the proceeds of oil, where the wealth generated has flown into Government coffers and has in turn, been reasonably distributed or allowed to filter down– none? For the rest of us, oil will continue to burden consumers, industry, agriculture and governments alike. Certainly, continued sales of oil leads to increased taxation flowing into the Department of Finance/Exchequer but this only serves to fuel (pun intended) an artificial distortion of trade, as those that by and large sell us the oil, purchase little of what it is we make in return (most oil seems to be discovered in remote and lowly populated areas in the World – think desert!). We must therefore wean ourselves off the addiction that is oil. Every spike in oil prices (notice at how the cost of crude oil jumps at every piece of positive economic data emanating from the US in particular?) leads to unprecedented levels of global inflation. If oil and the cost of a tank of fuel was the only product impacted then disaster could be mitigated, but all sectors of society are also so heavily dependent on oil, including industry, food production and transportation. Society (and by that I mean individuals) need to accept this fundamental point in order for meaningful change to occur.

It’s not scaremongering to say that climate warming and climate shifts (adverse weather patterns as more rain and storms occur in specific areas, and more droughts in others) and spiralling population growth will become common newspaper headlines for the years to come. Behind these headlines will be ever increasing energy costs coupled with (or in most cases driven by) escalating oil prices. The result will be uncertainty and higher levels of personal expenditure in developed countries (an inconvenience) but starvation for those in third world countries as they are priced out of the market (genocide through economics).

“Ask any heroine dealer the meaning of ‘its true worth’ and not only will he tell you how under-supply increases demand, but how the end-consumers’ willingness to pay more increases.”

The Value of Oil/ The Cost of Oil:

Oil is currently trading behind what markets consider “its true worth”. Ask any heroine dealer the meaning of “its true worth” and not only will he/she tell you how under-supply increases demand, but how his/her end-consumers’ ability and willingness to continue to pay more and more to feed their addiction increases – even “ability” doesn’t cut it for an addict that wants and needs more – they will often pay above what they can, this in turn generally leads to higher crime rates.

The Solutions: Government Policies that can effect real change:

Our governments should focus much of their attention to natural resources/sustainable energy, which although in its infancy (we have yet to figure out a direct way to harness Nature’s most consistent and free energy force, i.e. gravity) offers more economic opportunity.

Sustainable energies will continue to need considerable resources and investments poured into them. Someone needs to take a big lead on this. Our Government should aspire to a multi-generational energy policy. A policy that does not include the burning of fossil fuels as a means to generate energy. It’s a tall order but once started, successive future Governments can contribute to the overall policy with a “continuous improvement policy”. The current Government/Administration can lay the foundation through policy, tax incentives (and disincentives to encourage those that remain addicted to oil wean themselves off – the dreaded but necessary carbon taxes) can be devised to encourage business (new and existing) to develop the ways and means. Once initial targets are met, prices will fall. Industry and consumers will follow (based on sound economical purchasing decisions) – this process of falling prices and increasing business and consumer demand has already begun.  With such Government policies in place there should be no future reason that we should tolerate significant energy related inflation; in fact as new entrants arrive and as new technologies emerge, consumers should see a prolonged period of continued deflation in energy price – unless of course our reluctance as a society to wean ourselves off fossil fuels prevails.

Governments should also encourage transportation that is not oil dependent – taxing that sector that is, to subsidise the sector that is not. Ireland should be proud of the motorway infrastructure that we have completed over the past decade, after being so far behind the rest of the developed world. Rather than calling for motorways to be made redundant by attempting to move all to Public Transport (the infrastructures need to be put in place firstly), we should “clean them up” by making the vehicles that use them Green. Current thinking is that all small cars will be electric within the next 15years and all larger cars and commercial transporters will be run from Hydrogen. So for starters, how about the government abolishing toll charges for electric cars! Think what it would do for those citizens that live within a mile of the M50, etc. This could be upped to a congestion free charge on all electric vehicles (the M50/Eastlink and others should be incentive enough to get consumers thinking green).  Again an opportunity for Ireland to utilise its expertise (tax incentives) in attracting the brightest and best new emerging next generation companies  through encouraging research and development (how about a Tax Free moratorium for businesses involved in R&D purposes only for an initial 5 years, with a further 5years added for actually manufacturing the vehicles here?)

Needless to say we need to take our dependence away from oil and by default we will lead the world in GHG reduction (or at least be up there with the best for a change).