Dáil Éireann debate -
Tuesday, 24 May 1932

Vol. 41 No. 17

In Committee on Finance. - Cocoa Preparations.

Mr. Lemass

I move:

That the Customs Duties (Cocoa Preparations) (Provisional Variation) Order, 1932, which was made on the 2nd day of May, 1932, by the Executive Council under Section 1 of the Customs Duties (Provisional Imposition) Act, 1931 (No. 38 of 1931), and a copy of which was laid on the table of Dáil Eireann on the 4th day of May, 1932, be approved with and subject to the modification that the said Order shall not apply to cocoa powder imported before the 3rd day of November, 1932.

The duty imposed was, as Deputies are aware, a prohibitive one and applied to cocoa preparations, that is chocolate confectionery and other things of that kind. There are a number of firms engaged in the production of these goods in this country and it is considered that they are a class of goods which we are quite capable of making for ourselves. The importation of such confectionery in the past year was value almost for £300,000 and very considerable additional employment would be afforded by the imposition of this duty. The price and quality of the products of the home factories compare very favourably with the price and quality of the products imported. There can be no question that we are in a position to supply from our own factories cocoa preparations just as good and just as cheap as they can be imported, but because of trade connections over a long number of years, credit facilities and things of that kind, certain English and other firms have been able to maintain a substantial foothold in our market despite the duty imposed and maintained by the late administration.

Deputies will have noticed that it is intended for a period of six months to vary the duty imposed by the original Order by removing it from cocoa powder. That variation is made while examination is being given to certain proposals for the erection of new factories here and is designed merely to ensure that the position will not be changed to any considerable extent until that examination is completed or until any consequences of the examination have been realised, but cocoa powder imported in consequence of this modification will of course be subject, if imported in tins, to the new package duty. If it becomes noticeable that abnormal quantities are being brought in, that is quantities over and above those imported on the average of previous years, it may be necessary to vary the duty again. It is not anticipated that such will happen. I cannot imagine what case can be made for allowing foreign workers to make our requirements in chocolate confectionery for us. Therefore, I presume, the motion for imposing the prohibitive duty will have the unanimous consent of the Dáil.

Mr. McGilligan

This again is an anti-dumping Order, and it is an anti-dumping Order which has had to be varied since the 4th May.

Mr. Lemass

No.

Mr. McGilligan

And it is going to be varied further according to the Minister if he sees that in the meantime there are any abnormal importations. What is the evidence of abnormal importations to date? What did the Minister report to the Executive Council this time on which he got satisfaction that the Order was necessary? Can the Minister give us the imports for any one month of the four, five or six months before the Order?

Mr. Lemass

The Deputy can get them for himself.

Mr. McGilligan

If there are items in the case which has been made up and if they can be put forward by the person responsible for making the case and if they have not been put forward, I am entitled to call for them. As a matter of fact, the chocolate industry is going to have an increased protection by the difference between 6 3/5d. and 3/-, the full rate, or 5½d. and 2/-, the preferential rate. In regard to that whole industry, I must say that it is the least satisfactory of all the industries on which tariffs were put in 1924, 1925, and 1926. The excuse for these tariffs changes, of course. Sometimes it is dumping. Sometimes it is what the Minister so vehemently declaimed against the last time, a spirit of prejudice on the part of retailers. Now we are given prejudice on the part of the consumer, added to that the contention that there are better terms given by the English manufacturers, and finally you have got it down to this, that shop girls have more interest in pushing English chocolates on consumers who were indifferent in the beginning as to what chocolates they would buy, in such a way that the sale of foreign chocolates goes up. Analysing the situation, we find the case emerging in this way: that the lower grade chocolate of home manufacture has collared most of the market, but that in the case of the higher grade chocolate, the home chocolate does not appear to shine. Then you get the contention further made that some people who normally would buy the lower grade chocolate seem to prefer to eat the higher grade English chocolate than buy the cheaper low-grade Irish chocolate. Why that should be so, I do not know. There is one explanation that leaks out—and it is almost unpatriotic to say it—that the quality of the stuff made at home may not be as good, and people who buy chocolate, as they sometimes do in a benevolent way in theatres and other places, prefer to pay an extra sixpence or a shilling and get good stuff rather than be patriotic at the expense of a pleasant life. I do not understand why chocolates should not be made in this country when you have the main firm engaged with not merely protection at the back of it but also the accumulation of every benefit that a manufacturer could ever have. Yet that particular firm does not appear to be able to get ahead. There was the Trades Loan Act, there was the old tariff, there were premises which were certainly given at less than what could have been obtained in the open market. There was a changing backward and forward of the Trades Loan Guarantee conditions according to that man's own scheme. There was the fact that he got compensation for loss of his previous office, the fact that he has since got compensation as a distressed Loyalist, added to the fact that he is a director of the "Irish Press."

Mr. Lemass

Is it in order for a Deputy to make an attack upon an individual who is not here?

Mr. McGilligan

I am giving a statement of fact.

Mr. Lemass

It is an attack upon an individual who is not here—a low, mean, scurrilous attack, in my opinion.

An Leas-Cheann Comhairle

There should be no indication given in this place as to who a particular person referred to is. I said that on another occasion, that this place should not be used to make that kind of attack on anybody. There should be no indication given.

Mr. McGilligan

I am mentioning a firm. I say there is all that accumulation of benefits in the hands of that particular firm and yet they cannot make chocolates, except of a lower grade, in competition with the chocolates that come in from outside. Why is it? I never heard here any question of sweated conditions outside. I never heard anything except these intangible matters put up from time to time, the question sometimes as to the preference which is a thing I think the consumer has a right to have. The question of the retailers' prejudice will always occur. It was not alleged with any show of reason and there was no argument put forward about it, that it was a retailers' prejudice which brought about the sale of English chocolates. The only thing I ever heard in that regard, when scrutinised, turned out to be something in the nature of the fact that when a big consignment of English chocolates was ordered there was a bigger discount given on it but it had to be a big order—such an order that nobody outside a Dublin retailer could avail himself of the discount.

I understand again that the chocolate business is to a great extent a Dublin business. Dublin is the greatest consumer of chocolates in the country. Cork is a very poor second, and the rest of the country comes almost nowhere. Dublin firms can sometimes avail themselves of the conditions that are offered by English manufacturers, but that will not hold with regard to these other consumers throughout the country. Yet we have the same position apparently holding there. I do not know what case there is for the increased duty. We are told that it does not seem to be the right thing that our chocolates cannot be made at home. Prima facie that is so. Why are they not being made at home? Is it that there is something in the way of technical capacity required on the manufacturing side to produce a better type of chocolate than we have got here? Is it that there is not a proper appreciation that the public taste is something to cater for? What attention is going to be paid to that end of the business if you raise the duty from something about 6½d. to 3/-? If there is a slovenly manufacturer, in the sense of not making a proper attempt to cater for the ordinary taste of the public, taste which the public have a right to have, what is the likelihood of any proper attempt being made to cater for that taste when you increase the tariff by adding the difference between 6½d. and 3/-?

Again I say that this is an anti-dumping Order. It is founded on the statement that "Whereas the Executive Council is satisfied on the report of the Minister for Industry and Commerce that the immediate variation in the manner hereinafter appearing of the Customs duty chargeable under Section 9 of the Finance Act, 1931, is necessary to prevent an expected dumping of articles liable to that duty arising out of financial or other events in other countries and occuring in circumstances which would occasion industrial injury." Let us have some indication of the dumping that ever took place or was apprehended leading to the imposition of the Order.

Mr. Lemass

The information as to whatever dumping took place will probably be available to the Deputy when the Trade and Shipping Statistics for the month of April are available.

Mr. McGilligan

Have you got them?

Mr. Lemass

I was satisfied that abnormal importation—I prefer to use that phrase rather than the word "dumping" although dumping means the same thing—I was satisfied that certain importations in the sense of the word used by the Deputy had taken place, were taking place and would have taken place if the Order was not made. I made representations to the Executive Council to that effect, and the Executive Council, on my advice, made the Emergency Order which the Dáil is now asked to approve of. We have had Deputy Hogan talking to-day about the honest, hard-working Englishman and the lazy, thriftless Irishman and we also have had Deputy McGilligan talking about the foreign chocolate, the good stuff, and the Irish chocolate, the low-grade as if the terms were synonymous. It is not so. Not merely is it true that grade for grade the Irish chocolate is, in many cases, much better than the imported chocolate, but it is also true that in the case of one line of chocolate in which a very world-famous firm specialises, an Irish factory has beaten it here out of the home market on quality alone. It is true, of course, that in the higher grades of chocolate because of the fact that the duty imposed by the late Government was a flat rate and not an ad valorem rate, and that therefore the degree of protection diminished as the quality increased—it is true that because of that fact the Irish firms have not been able to establish themselves in the market to the same extent that they have been able to with regard to the cheaper lines. But they are going to do it now, and in fact they are doing it now. They are in a position and always have been in a position to supply the requirements of the trade in the higher classes of goods if the demand were available. But the fact is that because of habit and because of the long association of the trade with the products of one or two particular firms, the Irish firms were not given the orders in the higher-grade lines which would enable them to go in for production in respect of these higher lines to any substantial extent. They are doing it now, and additional plant, additional equipment is being installed to ensure that the factories will be adequately equipped with the most up-to-date machinery to enable the production of these goods to be undertaken. I do not think really that there is any other point that I need meet. It seems to me that the essential question that we should ask ourselves is that which I proposed to the Dáil originally: Are we competent or are we not to supply our own requirements in chocolates, and should we not, if necessary, be prepared to do without certain well advertised brands of chocolates in order that Irish firms may get into that end of the business, and that employment may be given to Irish people? I think the answer to that question is so obvious that it is difficult to see how anybody except a doctrinaire free trader could bring himself into the position of saying that this duty is one which should not be imposed. No hardship has been inflicted on anybody, no increase in the cost of living is likely to arise in consequence of it, the additional employment which it will give is very considerable indeed, and there is no question of the competency of the Irish firms to supply in quantity and in quality all our requirements. These are the main considerations that anyone should care about in considering a question of this kind, and consequently I recommend the Resolution to the Dáil. It is not true that the Resolution had to be amended as the Deputy suggests. When the original Order was made it was made deliberately and with the intention of maintaining it, but subsequent to the making of it certain representations were made and certain proposals were submitted for the establishment of factories here, which proposals must be considered. The modification is intended to give time for the proper consideration of these proposals and to ensure that in respect of certain classes of goods the position would be left unchanged until the examination is completed.

Mr. McGilligan

I have only said what the Minister has said, that there has been modifications of the Order.

Mr. Lemass

The Deputy said there would be a modification.

Mr. McGilligan

If there had not been why is it here?

Mr. Lemass

Because it was decided——

Mr. McGilligan

You had decided on something you had not decided on before, you had better information than you had previously, because your second thoughts were better than your first. In fact, if you took a little time to think over these things you would arrive at a better decision than when you rush them.

A Deputy

The gentle art of misrepresentation.

Mr. McGilligan

People do not usually make up their minds in this way, that further modifications in tariffs are necessary if certain other things occur, and the psychological effect of confidence in business is a thing that may be destroyed in the light of the chopping and changing that takes place. I wish to protest here against the gentle art of misrepresentation. Deputy Hogan did not talk about the lazy or thriftless Irish. He did talk about Irish people who were so hard-working that certain tender-hearted people described them as being sweated. The Minister will find himself driven deeper and deeper into the mire if he talks in that way of sweated conditions in industry, if he takes upon himself the task of being the great trade union organiser and leader in the country and talks of the value of trade union conditions in industry. If I said anything about low-grade Irish chocolates—the two terms of low-grade and Irish being looked upon as synonymous—I have said exactly what was the representation of the chocolate manufacturers in this country during many years. That is, in the low-grade end of chocolates— and you have to describe chocolates in some categories,—the high-grade, the lower high-grade and something lower, and then even in the second standard they said they had got the better part of the business. That is all I ever said. I do say that they represented to me very recently that on high-grade chocolates they had not been able to capture the market.

It went to the point that on one occasion when they were asked for a certain written proposal, their belief was that if that written proposal was accepted with regard to certain grades of chocolates the result would be that certain people would be driven out of the low-grade chocolates and would have to go off to the dearer end and it was hoped that to that extent they would get rid of that much competition. That was their own contention. The Minister's line is "Are we competent to manufacture chocolate or should we try to manufacture chocolates?" I put the other side of that question. In the years in which this tariff has been on, have we shown ourselves competent after trial under favourable circumstances to make certain grades of chocolates in the country? We have got no answer to that question.

He tells us that very considerable added employment can be got. I suppose statistics on that will have to be got somewhere else, but I would like to know when the Minister says considerable employment, how much does this amount to—what is the amount of this added employment? Surely it is an item that should be announced to us by the responsible person in the Government who is making the case for a tariff. What were the abnormal importations that were actually threatened before the Minister was induced to put on this tariff? I put the Minister already another question as to statutory rings.

There never was a more brazen proposal put up by any group of manufacturers than the proposal for a statutory ring put up by a certain group of manufacturers in this country. They had not the case that could be alleged in the case of the furniture manufacturers. They have not the same ground for the statement as to sweated conditions or that their competitors were small firms working under unhygienic conditions. They simply said this: "We have reached the saturation point and gone beyond it." The only way out of the difficulty put up to me was to pass legislation saying that nobody would be allowed to take up the manufacture of these chocolates unless they got a licence from a certain committee, that certain committee being a self-selected group of manufacturers. They did not intend even to give licences to all the manufacturers in the trade even though some who would be put out were nationals of this country. They could carry on their trade if they were given that privilege. So they could, if the consumers were driven to eat what they produced. They could carry on for a while, but probably not for very long.

These were the conditions that were put forward. There are much better conditions for statutory rings in this country when the duty has been raised in the way it has been raised. We shall hear about that later. Before even these preliminaries or the early stage of this Resolution is passed, we should hear from the Minister what were the imports of an abnormal type threatened or what imports had actually taken place prior to this Order going on, or what was the very considerable added employment that was going to come in the country by reason of this.

Mr. Lemass

I am not in a position to give anything like an accurate estimate in the matter of employment, first, because, or mainly because, the method of production is changing in the country and new machines are being installed. The change in the machinery involves less labour than heretofore. There have been, in fact, some reductions recently in the industry in the matter of labour of that kind.

The position is roughly this: that the chocolate imports in 1931 were valued at £300,000. The output of the various Irish factories for that year was £167,000. The output in 1929 was valued at £167,000. I do not want the Deputies to draw any wrong conclusions from these figures. The output of the Irish factories was mainly of the cheaper grade of chocolate. The imports were of the higher grade of chocolate, so I assume from the point of view of employment that the number of persons might be increased by from 50 per cent. to 75 per cent. These figures will depend on the type of equipment used in the production of chocolates under the new circumstances in the Irish factories. On the question of abnormal imports I have only this to say: that such abnormal imports were taking place and were likely to have taken place in much greater quantities if the Order was not imposed. Having satisfied myself of that, and having succeeded in satisfying the Executive Council on the matter, the Order was made. That Order now goes before the Dáil for approval, and if approved it becomes a permanent duty in operation.

Mr. McGilligan

Would the Minister not state some round number in the way of additional employment in this trade?

Mr. Lemass

No.

Mr. Cosgrave

Will the Minister state what is the price per pound of the superior chocolate to which he refers?

Mr. Lemass

Which grade?

Mr. Cosgrave

The high grade.

Mr. Lemass

I am afraid I do not know.

Mr. Good

Will the package duty apply to this?

Mr. Lemass

Yes.

Mr. Good

What will the additional cost on the chocolate be?

Mr. Lemass

I cannot say. Any person who wants chocolate or cocoa of good quality can get it of Irish manufacture.

Mr. Good

What I want to know is what the package duty will represent as far as the chocolate is concerned in the way of duty.

Mr. Lemass

Twopence per packet.

Mr. Good

But what will that represent? We find some extraordinary statements in connection with the duty. We will hear other estimates. I would like to know from the Minister what is his estimate as to what the packet duty will represent in cost to the country.

Mr. Dillon

How many firms in the country are there engaged in cocoa manufacture for beverage purposes?

Mr. Lemass

There is, I think, one firm manufacturing its own brand of cocoa and it is manufacturing two other brands under contract for other firms. That is three altogether.

Mr. Dillon

Then there is only one firm manufacturing cocoa and it is the same cocoa under different names?

Mr. Lemass

No, it is not.

Mr. McGilligan

What is the difference?

Mr. Lemass

Different quality.

Mr. Dillon

Is the Minister satisfied that these cocoas are of different quality?

Mr. Lemass

I am satisfied they are not merely of different quality, but they are entirely different in blend, taste and everything of that kind. I forget the names of them. The position as regards cocoa is that the duty is being maintained at the level at which it has always operated, for a period of six months. We intended to make it a prohibitive duty by the Order, but in consequence of certain proposals made, which are now under consideration, this six months postponement of the prohibition has been decided upon. At the end of six months the prohibition comes into operation, but the circumstances existing in this country in relation to the industry and the number of firms engaged in it may, and probably will, have changed substantially by then.

Mr. O'Neill

There is only one firm manufacturing cocoa in the country?

Mr. Lemass

There is one firm manufacturing its own cocoa, but the same firm also manufactures on behalf of other firms.

Mr. O'Neill

Then there is one cocoa factory only?

Mr. Lemass

Yes.

Mr. McGilligan

Could it be described as a foreign company or as a national company?

Mr. Lemass

A foreign company.

Mr. Dockrell

Can the Minister indicate if the abnormal importations were altogether in the upper grade of chocolates?

Mr. Lemass

I am not in a position to say.

Mr. Dockrell

In this connection the retailer is engaged in catering for public tastes. I have not heard the Minister stating that the Irish firms are competing in all grades. You can eat confectionery but you cannot eat furniture. I will state, without fear of contradiction, that there are plenty of ladies whom you could blindfold and they can put the different kinds of chocolates into their various grades. In this country we have a demand for all kinds of chocolate manufactured in England. I do not want the House to think that I am contending that there is nothing like the English chocolate. I do know there is a demand for the various grades of chocolate that come from England. Of course I admit that the Irish manufacturers are supplying two, and, at most, three, of these grades. One will find, however, that the rest of the public taste is not being catered for here at all.

Motion agreed to.

Mr. Lemass

I beg to move: