THE TAOISEACH HAS said the government is examining a windfall tax on retailers who post massive profits.
Windfall taxes have been imposed by the government on energy companies and special dividends, the funds from which Varadkar says will be used to “give back to people, to help with their electricity bills”, as well as small businesses.
As for groceries, Varadkar says the government is engaging with retailers and they “expect to see prices come down”.
“But one thing I think we probably will see, and it is important to be honest with people about this, when you have a period of inflation, what tends to happen is prices level off and maybe fall back a bit, but they never go back to where they were,” he told Virgin Media Tonight.
It follows increasing criticism of the government over its handling of inflation of food on supermarkets shelves.
Varadkar says there was a “firm commitment” from retailers to lower prices if input costs fall.
Own brand products will likely see the quickest decreases, as retailers have more control over their supply chain.
Simon Coveney has said that the government will “name and shame” retailers that are profiteering.
Retailers have promised government to reduce grocery costs when their input costs fall, it’s been easier for them to control the cost of their own-brand products.
“We have a strong body called the CCPC, they can carry out investigations if there’s any evidence of price-fixing, any cartel-like behaviour. I’m not saying that’s happening but if there’s evidence of that they can seize files.”
The law is different for traded and privately held companies, privately held retailers don’t have to disclose how much profit they made in Ireland, he says.
“But there’s no reason why any company should be making substantially bigger margins here in Ireland than would be the case in the UK or other parts of Europe.”
Varadkar said he wouldn’t rule out Labour TD’s Ged Nash’s proposal to bring in a measure like the windfall tax to retailers to curb profiteering.
“The same principle applies. There’s no reason why it could not be done, but we want to examine the evidence first and see if the evidence is there.”
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