asked the Minister for Industry and Commerce if he is aware that the preliminary report of the Census of Industrial Production for the tobacco industry for 1952 indicates that profits increased substantially over 1951; and, if so, if he will take steps to have the price of cigarettes and tobacco investigated at a public hearing by the Prices Advisory Body.
Ceisteanna—Questions. Oral Answers. - Tobacco Prices and Profits.
asked the Minister for Industry and Commerce if he is aware that total salaries and wages in the tobacco industry increased by 9 per cent. from £906,975 in 1951 to £986,797 in 1952, while the remainder of net output as defined in the Census of Industrial Production and which includes profits increased two and a half times from £797,817 to £2,010,541; and, further, if he will state whether this increase of £1,212,714 in the remainder of net output can be regarded as a measure of the very substantial increase in the profits accruing to the manufacturers over this period.
With the permission of the Ceann Comhairle, I propose to take Questions No. 11 and 12 together.
The Deputy will be aware that the "Remainder of Net Output," as shown in the Census of Industrial Production, includes a substantial amount for overhead costs in addition to the actual net profit. Consequently the increase of approximately £1.2 million between 1951 and 1952 consists in part of increased overheads and in part of increased profits. The profits earned by tobacco manufacturers in 1951 were substantially below the level permitted by the arrangements by which the net profits of tobacco manufacturers are restricted. An increase in profits in 1952 was, therefore, to be expected. I should add that the profit position of the principal tobacco manufacturers is kept constantly under review by the Prices Advisory Body, and the retail prices of the popular brands of cigarettes and of tobaccos are fixed by Statutory Orders.
Will the Minister not agree that the figures for net output bear a very close relation to the profits of the cigarette manufacturers? Further, will he not agree that the one penny allowed to cigarette manufacturers and announced in the Budget Statement, 1952, rather than making up the alleged losses of the cigarette manufacturers, provides them with a very generous increase in profits?
The profits permitted are calculated in the same way as they have always been calculated since this control was established. In 1951, however, a situation arose in which it would not be possible for these manufacturers to earn the permitted profit and a rather serious situation arose as far as some of the manufacturers were concerned. The increase in profits in 1952 did not bring them above the level permitted by the arrangements.
It is agreed that there may have been a case for some of the Irish concerns but would the Minister not agree that, in respect of some of these concerns that are not Irish, the increase in net output from £800,000 to over £2,000,000 in one yearwas very, very great? Further, will the Minister refer his colleague, the Minister for Finance, to a statement he made in this House on the 1st May, where he said:—
"Deputy Corish, by some method of calculation, has arrived at the conclusion that this additional 1d. per packet on the price of cigarettes means £900,000 per annum to the tobacco manufacturers. I do not know how the Deputy has arrived at that figure. It is in any event too fantastic to be correct."
I think the figures given in the Trade Journalshow that the estimate was not fantastic but rather that the profits were.
There are two points I wish to indicate. One is that during these two years there was an increase in the value of the gross output as well as the net output. Secondly, not all the profits of these manufacturers are subject to the statutory price control.