asked the Minister for Industry and Commerce whether, with a view to enabling tea to be sold in Ireland at a reduced price and of a better and more varied quality, he will direct Tea Importers Limited to cease purchasing stocks of tea so as to permit individual wholesale merchants in this country to purchase tea as and where available in the most favourable markets.
Ceisteanna—Questions. Oral Answers. - Prices of Tea.
asked the Minister for Industry and Commerce when it is proposed to allow free tea imports direct by the trade.
With the permission of the Ceann Comhairle, I propose to take Questions Nos. 30 and 32 together.
I referred to this matter in a statement which I made in the Dáil on the 3rd April, 1952 (Official Report, columns 1302-3). The arrangements for bulk-buying of tea through Tea Importers, Ltd., have been continued up to the present to give effect to the policy of making purchases directly in the countries of origin and must be maintained for this purpose until suitable alternative arrangements can be made. I have been considering, in consultation with trade interests, what changes it would be practicable to make in the arrangements, but it has not yet been possible to reach a conclusion in the matter.
Is the Minister aware that tea can be purchased at the present time at a very considerably lower price than that at which tea of corresponding quality is being purchased by Tea Importers, Ltd.?
No, I am not so aware. Perhaps if the Deputy waits for a reply to the next question——
The Minister is not aware that tea can be purchased at very much lower prices on the London market?
Not by Tea Importers in India. Tea Importers are buying, by my permission, in the London market at present.
At a lower price than they were purchasing before?
Yes, certainly.
Is that lower price about to be transferred to the consuming public?
It will.
When?
The next question deals with that.
Is the Minister aware that I could buy tea to-morrow in Mincing Lane at 18 pence per lb. of the same quality as that which is being charged out by Tea Importers, Ltd., at 3/3? If that is a temporary business it is understandable, but in view of that will the Minister no't restore to every tea merchant in the country the right to buy his tea wherever he can get it cheapest for the consuming public? If the tea merchants of Ireland are released from the grotesque tyranny of Tea Importers, Ltd., the price of tea can be reduced by 1/- to 1/6 per lb. in 24 hours. Will the Minister not do it?
That is a separate question.
For my own part, I would much prefer to get away from this system of bulk buying and restore independent operation to the various tea wholesalers. I want to make it quite clear, however, that the policy of buying direct in countries of origin and not paying commission on our tea to London tea brokers is going to be maintained. I have asked the tea wholesalers' association to put up their proposals as to how that aim of policy can be realised while at the same time the bulk buying arrangements can be terminated.
If the policy to which he has adverted in the reply he has just given to Deputy Dillon is being maintained, why has the Minister permitted Tea Importers, Limited, to purchase tea on the London market? Is not that contrary to the policy?
There are two answers to that. One is that we have still a problem of heavy stocks being held here which will have to be liquidated. Secondly, no satisfactory alternative arrangement has yet resulted from my discussions with the tea trade.
Is not a satisfactory arrangement the fact that you can buy tea cheaper in London than you can buy it anywhere else, with or without the commission?
No, I do not agree. I refuse to accept the contention that it is possible for us to purchase tea at Mincing Lane more cheaply than in India.
Of course it is.
In view of the fact that it hits the consumer — and, in the main, the type of consumer whose economic circumstances are ill suited to meet the subsidy for Tea Importers, Limited — will the Minister consider getting rid of that body as soon as possible?
Tea Importers, Limited are not being subsidised. They make no profits.
asked the Minister for Industry and Commerce if he will state the reason for the marked differential in prices of tea as between here and Britain, and the amount of the export tax per lb. paid on tea imported from India, and if he will make a statement on the matter.
Comparison of retail price levels for tea in this country and elsewhere is complicated by the fact that there are so many different blends of tea. Tea can be obtained in this country at retail prices ranging from 3/6 a lb., upwards. I understand that in Great Britain tea is available at a retail price as low as 3/- a lb., but that supplies at this price are scarce.
The directors of Tea Importers, Ltd., have informed me that the prices at which they can distribute tea at present are necessarily above those prevailing in Great Britain because of the fact that, in pursuance of the stockpiling policy in recent years, they built up a substantial emergency reserve which is now in process of being liquidated. The teas comprising that reserve were bought at prices in excess of present market prices in the countries of origin. Another factor which affects the selling price here is the cost incurred by the company for overhead expenses, such as warehousing, interest charges, etc., in connection with these emergency stocks. In view of the international situation is was decided that for the current purchasing season Tea Importers, Ltd., should not provide for carrying any larger stocks than is necessary for ordinary trading purposes. I am advised by Tea Importers Ltd., that when the emergency reserve has been liquidated there should be no substantial difference between the landed price of tea in this country and the landed price in Great Britain, quality for quality. The demand in this country, however, has traditionally been for a better quality of tea than in Great Britain, and any attempt at comparison of average prices in the two countries would, of course, have to take account of this consideration.
I am informed that the tax which is levied by the Indian Government on all exports of tea is approximately 4½d. a lb.
I notice the Minister for Finance blushing.
When is it expected that the emergency stocks will be liquidated?
I should think in quite the near future. The new season's stocks are beginning to arrive and will go into trade shortly.
May we anticipate a reduction in the price of tea?
A reduction can be anticipated.
If the Minister discovers that can be done by giving the tea trade complete freedom to buy tea wherever it can be most cheaply bought, is there any objection to letting them buy their tea direct from Calcutta and allowing the ordinary tea merchant in rural Ireland, if he can buy better tea for less money for the benefit of his customers, to buy the better tea for the less money wherever he can buy it whether it be Calcutta, New York or anywhere else?
During the war years we were on the half-ounce of tea. We were in that situation because we bought our tea through London and the London tea merchants, during that period, never sought to assist us. We are not going to permit ourselves to be in that position again.
Are all the stocks now being liquidated?
No, the emergency reserve stock is being liquidated.
All the emergency reserve stocks?
I hear the Minister for Finance quacking.
It was decided by the previous Government that over and above the normal trade stocks, a six months' emergency reserve would be built up. That is being liquidated but the conditions under which the trade is being carried on here require the holding in this country of greater stocks than would be the case if our stocks were held in London and we drew upon them from day to day.
When was it decided that there would be no emergency in the foreseeable future?
A Deputy
The change of Government.
The differential is a pure fraud. There is no substantial difference in the quality of the tea.
There is a wide variety of grades offered for sale to blenders at different prices and no blender will pay a higher price for one blend if he can get tea of the same quality at a cheaper price.
Did I understand the Tánaiste seriously to say that he has no emergency stocks now?
They are here now and that is the problem.