February 16, 2011
By Staff Reporter
By Andrew Bushe
DUBLIN — Millionaire senator and supermarket boss Fergal Quinn is at the center of a storm about "support" payments his Superquinn chain has sought for a new Dundalk shop that many of his suppliers regard as "hello" money in another guise.
Hello money was banned under the Groceries Order Act by former Taoiseach Albert Reynolds when he was industry minister in 1987. It was made an offense to seek a discount or allowance "in consideration of the opening of a new retail outlet."
Quinn’s "support" payments, which have ranged from £500 to £5,000, are now under investigation by the director of consumer affairs.
Quinn argues that his family-owned Superquinn chain has stayed within the law because the payments were being made to another company, Retail Logistics, which then paid management fees to Superquinn.
Anyone found guilty of charging hello money faces a maximum fine of £1,500 or six months imprisonment.
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When suppliers complained about Quinn’s demands, he strongly defended the practice. The author of a business bestseller, "Crowning the Customer," and the smiling face of Irish retailing, Quinn insists he has done nothing illegal. He claims the money will be used to keep prices down in his shops and that other retail chains also engaged in similar practices.
He also says the Groceries Order Act is a bad law and should be abolished and claims that if hello money is sought from a British supplier for special offers in a British-owned store in Ireland, they would not be breaking the law.
"I feel that is so totally unfair against Irish suppliers, Irish retailers and Irish consumers," Quinn said. "We have got to find a way to stay in business in competition with foreigners who are in here whose headquarters are based in Britain and who can do it because there is no law against it".
Michael Campbell, director general of RGDATA, the organization representing 6,000 independent family grocery shops, has attacked Quinn’s "support" money.
In a statement, Campbell said that having shot himself in one foot Quinn was taking aim at his other foot by claiming that the law was not applicable to foreign-owned multiples.
He said the Groceries Order law does not threaten Irish business and, contrary to what Quinn said, it can be used to move against companies even if they are based outside the country.
"I would call on Senator Quinn to stop defending the indefensible," he said.
One newspaper letter-writer offered to switch all his purchases to a nearby Superquinn branch if Quinn entered into a "mutually beneficial" arrangement by agreeing to give him a goodwill payment of £1,500.