The Irish Government has overturned 18-year-old legislation that allowed manufacturers to fix the minimum resale prices charged for their products, replacing it with a new Competition Act.

The old Groceries Order, Caitríona Halpin at the Department of Enterprise, Trade and Employment told just-food, was designed to protect producers: “The idea was that certain food stuffs, basics like bread and milk, would not be allowed to be sold below the cost of production.”

However, the consequence of the legislation in the modern market has been to keep the price of groceries artificially high by allowing suppliers to dictate the minimum price that their products could be sold at, the Minister for Enterprise, Trade & Employment Micheál Martin said.

The new Competition Act builds on the provisions of the 2002 Competition Act by specifically prohibiting the fixing of minimum retail prices by suppliers, unfair discrimination in the grocery trade, and the payment of advertising allowances and “hello money”.

Announcing the new legislation, Martin said: “The reality is that for industry to survive and prosper in a global economy, it must be able to compete with the best. It is essential that we guarantee fair competition. However, we will not do industry any favours by continuing to protect it from all competition on domestic markets. That is what the Groceries Order did. Our competition laws are not designed to protect competitors. They are designed to protect competition.”

The minister, just-food has learnt, expects to see changes to the retail price of consumer products within a matter of weeks.