Friday, December 8, 2023
9.9 C
HomeFarming NewsLocal food retailers ‘on the brink of failure’ due to skyrocketing costs
Catherina Cunnane
Catherina Cunnane
Catherina Cunnane hails from a sixth-generation drystock and specialised pedigree suckler enterprise in Co. Mayo. She currently holds the positions of editor and general manager at That's Farming, having joined the firm during its start-up phase in 2015.
Reading Time: 3 minutes

Local food retailers ‘on the brink of failure’ due to skyrocketing costs

The government must intervene with a “vital” financial aid package for local food retailers to keep doors open in indigenous food retail stores.

That is according to Rural Independent TD, Michael Collins, who warned that many of Ireland’s family-owned supermarkets are “on the brink of failure” due to skyrocketing energy bills and inflationary pressures.

These shops, he says, are “the heart and soul” of every rural Irish village and town and can no longer be abandoned.

He adds that energy is the second highest bill for food retailers, after staff costs, because of the perishable nature of product lines that require refrigeration, freezers or cold storage, 24 hours a day all year long.

Local food retailers

The deputy warns that without rapid intervention, many of these family-owned local businesses will no longer be in a position to retain employment, continue to support local sports and charitable organisations, and service their local communities.

“That is why, we are demanding a dedicated package to protect livelihoods and jobs in local communities and ensure local food retailers, who have provided Irish families with access to food for generations, can continue to operate,” he says.

- Advertisement -

“Many small food retailers, who have engaged with us, have highlighted the paralyzing financial pressures they are now facing just to keep their doors open due to skyrocketing energy costs. This is pushing many to the edge of collapse.”

“For example, many food retailers have explained that their average energy bill is expected to triple or even quadruple by next month, surpassing 2021 costs.”

“In reality, this means an annual average store energy bill of up to €200,000 in September (almost €4,000 a week). This is up from approximately €50,000 in 2021.”

“One smaller West-Cork food retailer saw his monthly bill jump from €5,000/month in 2021 to over €10,000 in recent months. This is expected to jump significantly higher from next month onward.”

As such, he says surging energy costs are creating a deepening crisis that smaller supermarkets cannot sustain or pass on to their customers, given the “low” margins within which they operate.

Aid package in budget

That is why the group is calling on the government to provide a tailored aid package in next month’s budget.

The group fully endorses and supports calls from retailers for such a package.

He says it must:

  • Incorporate a dedicated energy rate cap for the sector;
  • Suspend commercial rates;
  • Capital allowance super-deduction to aid with investment;
  • VAT warehousing;
  • Include food retailers in all existing and future state-support schemes.
Current supports

Currently, he says that all family-owned retailers are “blocked” from all such government schemes.

These include the €55 million ‘Green Transition’ fund to help businesses veer from fossil fuels and SEAI energy efficiency schemes.

He stresses that it is “no longer a tenable position” for the government to remain idle, while many of these retail outlets are forced out of business through no fault of their own.

“All rural communities are highly dependent on the local shop. Thus, we cannot allow a situation to emerge where, once again, the government stands idle, as they did when banks and post offices closed nationwide,” he claims.

Other news articles on That’s Farming:

‘Banning the sale of new petrol and diesel cars is another attack on the Irish way of life’

- Advertisment -

Most Popular