February 16, 2011
By Staff Reporter
By Andrew Bushe
DUBLIN — A warning that profiteering and anti-competitive activity will be firmly stamped out has been given by Taoiseach Bertie Ahern in his first speech to industry and business leaders following the publication of figures that showed that inflation is now running at 5.2 percent a year.
Ahern said that excessive profit-taking is costing about £1 billion a year, or between 1 and 2 percent of GNP.
The taoiseach said he resources were being committed to the Competition Authority to ensure consumers and businesses are protected.
"Maximizing prices because of a lack of consumer resistance is not sensible," Ahern said.
He said there was "evidence of opportunism in profit taking" in the services sector and with food and drink prices.
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"I am not going to suggest that we should seek to control inflation by stopping businesses making a fair profit," Ahern said. "But we cannot allow a situation where there is excessive profit taking, particularly in the context of anti-competitive activity.
"We rightly espouse the benefits of a vigorous market economy. We must also recognize that vigorous policies to support competition are a characteristic of the most dynamic economies, including the United States.
"Domestic inflation in previously sheltered sectors must now be targeted by competition and a regulatory regime which puts the consumer first."
The Consumer Price Index shows that major factors driving inflation upward are a 6.4 percent increase in services, 5 percent in drink charges, and 3.2 percent in food prices.
Trade unions, angry that inflation has virtually eroded the 5.5 percent pay rise in the first phase on the new partnership deal this year, will be meeting the taoiseach soon to discuss the prices crisis.
Union officials say the government has been complacent on inflation and have called for strong measures to tackle domestic generated elements of the increase.
They also want tax cuts and subsidies to offset some of the imported elements such as higher energy prices.