Dáil Éireann debate -
Wednesday, 18 Jul 1956

Vol. 159 No. 8

Committee on Finance. - Restrictive Trade Practices (Confirmation of Order) Bill, 1956—Second and Subsequent Stages.

Minister for Industry and Commerce (Mr. Norton)

I move that the Bill be now read a Second Time. This is the third Bill of its kind to come before the House. Its object is to confirm and give the force of law to an Order which I have made under Section 9 of the Restrictive Trade Practices Act, 1953, relating to trade practices affecting the supply and distribution of motor vehicles, tyres, spare parts and accessories. The previous two Bills, relating to the trades in radio sets and building materials, received the approval of all parties in the House and, as the principles underlying the present Bill are the same, I feel confident that this measure, too, will commend itself to the House.

Deputies will be aware that the Fair Trade Commission held a statutory inquiry under Section 7 of the Restrictive Trade Practices Act, 1953, in relation to the supply and distribution of motor vehicles, tyres, spare parts and accessories. Subsequently, the commission furnished to me a report of the inquiry, describing the conditions obtaining in the trade and indicating that, in the view of the commission, certain practices existed which interfered unfairly with competition and operated against the public interest. The report has been published and copies have been circulated to Deputies. However, to facilitate the House, I propose to give a résumé of the commission's report and of the recommendations which the commission make with a view to terminating restrictive trade practices which are considered to be unfair or to operate against the public interest. Deputies will understand that, in referring to trade practices, I am referring to the position as it was stated in the commission's report and that I have no means of knowing to what extent, if any, these practices have been altered in the meantime.

As the commission's report shows, there are two associations in the motor trade, namely, the Irish Motor Traders' Association, which I shall refer to as the association, and the Society of Irish Motor Traders Limited, which I shall call the society. The society is a company, and its functions include negotiations with Government Departments and trade organisations. The association is a trade union which, in addition to conducting negotiations relating to wages and conditions of employment, undertakes the regulation of trading practices and the enforcement of regulations such as those relating to the approval of new entrants to the trade, and also to resale price maintenance. The officers, staff and headquarters of the society and the association are identical, and the executive councils of both bodies have a common membership.

The commission found that, for a considerable number of years, a list of approved motor traders—known as the Approved List—was maintained by the association. Entry to this list was subject to certain requirements which tended to become more comprehensive with the passage of time, and, of course, admission to the list was a prerequisite to the receipt of a large proportion of motor goods on trade terms. The Approved List was published jointly by the society and the association. Applicants for admission to the list had not to be members of either the society or the association, and members did not possess any trading advantages over approved nonmembers. The supply and distribution of motor goods were, however, largely influenced by the control arrangements of the association.

Assemblers and wholesalers who were members of the association or of the society, as well as approved motor traders, undertook to confine supplies of new cars and other motor goods to persons on the Approved List. It was considered by the association to be an offence to supply goods on trade terms to unapproved traders. Two of the large assemblers were not members of either the association or the society, and did not adhere strictly to the Approved List. Nevertheless, the majority of the main dealers appointed by both these assemblers were approved by the association and, consequently, had bound themselves to make supplies available only to approved traders.

The association also enforced the maintenance of resale prices fixed by assemblers for new passenger cars, and, by manufacturers, for tyres. A trader who was dicovered by the association to have supplied goods on trade terms to an unapproved trader, or to have sold a new car or tyre for less than the manufacturers' list prices, might be subjected by the association to punitive action, such as a fine or removal from the approved list. The proprietor of an unapproved garage could normally obtain a new vehicle for sale only by surreptitious means from an approved dealer.

The smaller assemblers usually relied for a substantial proportion of their trade on sales direct to the public. The larger assemblers, on the other hand, appointed main dealers through whom supplies were channelled to sub-dealers and casual dealers. The largest assemblers aimed at the appointment of main dealers on a more or less exclusive basis. Even where exclusiveness was not attained the main dealer was usually prohibited from accepting dealerships for other makes of car without the permission of the assembler. Each assembler had formal agreements for distribution with his main dealers and also, as a rule, with his sub-dealers.

Some of the agreements provided for the operation of reciprocal exclusive arrangements between the main dealer and the assembler. The degree of exclusiveness varied; in some cases it involved the main dealer in confining his sales to the new vehicles produced by an assembler. In others it meant that, while the main dealer might become a sub-dealer or a casual dealer for other makes of car, he undertook not to take on a second main dealership.

New vehicles and spare parts were supplied by assemblers to dealers on the basis of list prices less discounts. The discounts varied between assemblers. If certain exceptional discounts are omitted, the range of discounts for passenger cars would be 17½ per cent. to 20 per cent. for main dealers, 15 per cent. to 17½ per cent. for sub-dealers, and 11 per cent. to 15 per cent. for casual dealers. For commercial vehicles the range would be 18 per cent. to 20 per cent. for main dealers, 15 per cent. to 17½ per cent. sub-dealers and 13 per cent. to 15 per cent. casual dealers. It was stated in evidence that the assemblers settled their discounts without reference to each other and without being subject to the direction of the manufacturing companies from which they import aggregates of parts for vehicle assembly. Generally, assemblers claimed that their discounts were fixed at as low a level as possible, having regard to the structure of the trade and the overhead and operating costs of garages.

The commission point out, however, that only in a few cases, and then only to a limited extent, had any analyses of dealers' costs been made in this country. An important feature of the trade is the extent to which second-hand cars are taken in part exchange for new cars. It was estimated that 90 per cent. of sales of new cars involved transactions in second-hand cars. Despite frequent consideration, the association had not evolved a method of controlling the allowances made by dealers in respect of second-hand cars and this situation had rendered the maintenance of the retail prices of new cars difficult, if not anomalous. As regards spare parts and accessories supplied by assemblers, the general trend of discounts was 25 per cent. to 33? per cent. for main dealers, 20 per cent. to 25 per cent. for sub-dealers and 10 per cent. to 15 per cent. for casual dealers.

In their agreements with dealers, the assemblers prescribed that sales to the trade and to the public must be made at the prices stipulated by them and provision was made for the imposition of penalties such as fines, or the cessation of supplies, for breaches of this or other conditions. The enforcement of resale prices in respect of new vehicles was not normally undertaken by the assembler acting independently. Instead, reliance was placed on collective enforcement by the association. The enforcement arrangements of the association were, at the time of the inquiry, applied in respect of new passenger cars and tyres but not in respect of commercial vehicles or other spare parts or accessories. The two assemblers who were not members of the association stated that they would, if necessary, take action under their agreements to enforce the maintenance of prices.

The report indicates that an applicant for approval by the association as a motor retailer was required to meet certain onerous requirements. His garage had to have a ground floor space of at least 3,000 square feet under one roof. He was required to have specified tool and office equipment and to carry an adequate stock of accessories and parts. If not himself mechanically qualified, he was obliged to employ a motor mechanic who had completed a five-year apprenticeship in an approved garage. Moreover, he had to give a written undertaking to adhere rigidly to the price maintenance regulations prescribed by the association. The conditions for entry into the motor repairers' section of the approved list were less onerous than those for approval as a motor retailer, but it may be noted that garages in this section are not supplied with new cars on trade terms. The conditions for approval by the association as a wholesaler called for the possession by the applicant of very substantial capital for investment in the business, and premises with specified ground floor space.

The manufacturers' section of the Approved List catered for the manufacturers of home produced components and materials such as sparking plugs, batteries and springs. The formula for admission to this section of the Approved List provided that applicants must not market motor goods other than (a) the goods they manufactured or (b) goods bearing the same brand names or other recognised brand names of the same manufacturer; they must have a suitable premises of at least 1,250 square feet; and any other business conducted in the same premises must be allied to the motor trade and conducted exclusively on a wholesale basis. The formula also required applicants to possess substantial minimum capital in certain circumstances. The advantage of inclusion in the manufacturers' section appeared to arise partly from the goodwill attaching to membership and partly from the request made to retailers to purchase only from persons whose names were included on the list. So far as persons in other sections of the Approved List were concerned the advantage of having manufacturers on the list was clearly connected with the expectation that they would confine supplies to persons on the list.

The commission have concluded that the system described in the report whereby the association apply conditions for the approval of traders, and impose requirements with the object of confining supplies of motor goods to persons on the Approved List, constitutes a restriction of competition and a restraint of trade. In the opinion of the commission this interference with competition and trade is unfair and operates against the public interest. The regulations governing the approval of persons seeking to qualify as retailers are unnecessarily severe. The garages of a substantial proportion of approved retailers do not meet the minimum standards demanded of a newcomer to the trade. If a marked proportion of approved traders have not been compelled or induced by the circumstances of trading to achieve or exceed such minimum standards, it is clearly unreasonable to expect them of a new entrant with limited resources who has not yet become established in the trade. The commission also consider that the regulations for the approval of motor repairers are excessively restrictive.

The commission accept that motor-vehicles require the service of skilled mechanics with adequate equipment at their disposal. They are of opinion, however, that any minimum conditions in this regard which may be essential should be formulated by the individual assembler and not by an association of traders. The conditions adopted by the association for the approval of wholesalers unreasonably limit free and fair competition. The regulations about capital and premises operate unfairly against the applicant with experience but with only modest resources. The commission are satisfied that the tendency of the conditions as a whole is to preserve the status quo, and to retard the development of new methods in the wholesale distribution of motor goods. The commission consider that assemblers, manufacturers and other suppliers should not be governed in their distribution arrangements by adherence to the approved list. As requirements for admission to the approved list are deemed by the commission to be unreasonable and unfair, it would, in their view, be contrary to the public interest that suppliers should confine the supply of their goods on trade terms to persons on such a list. Motor goods manufactured in this country are protected by tariff or by quota and, in consequence, the sources of supply of the goods are, in many cases, necessarily limited. It is the view of the commission that, in such circumstances, a responsibility rests on suppliers to ensure that persons actively engaged in the trade are not handicapped in earning their livelihood by reason of inability to obtain supplies of the goods on trade terms. It is always open to the individual assembler or to any other supplier, acting on his own initiative, to apply conditions relating to such matters as technical service and stocks which he considers to be necessary for the efficient distribution of his goods. Any conditions of supply which he imposes should, however, be fair and reasonable. In the case of tyres, which form an important item in the stock-in-trade of any garage, there are two brands, but only one producer, in this country. Accordingly, if supplies of tyres are restricted to garages, the conditions of supply should not be such as to exclude any public service garages from supplies of tyres on appropriate terms except for causes such as those related to creditworthiness.

As regards resale price maintenance in the motor trade, the conclusion of the commission is that the practice operates against the public interest and should, subject to certain safeguards, be abolished. It is the view of the commission that the operation of resale price maintenance in respect of new vehicles tends to be anomalous and arbitrary in a situation where the part-exchange of second-hand vehicles plays so large a rôle in selling. If a trader is free to give a high trade-in allowance to one purchaser it is difficult to justify the imposition of a penalty on him if he reduces the price of a new car for another purchaser. The commission consider, however, that the individual assembler should be at liberty to withhold supplies of new vehicles from a trader who sells the vehicles at or below the prices at which he purchased them from the assembler, or (subject to notifying the commission and to the right of the commission to review the action taken) to withhold supplies from a trader who has advertised new vehicles for sale at less than the assembler's list prices. The effect of this would be to allow the individual purchaser to bargain freely with the dealer regarding the price of a new vehicle. It is the view of the commission, however, that the provision should be contingent on the continued absence of collective controls over the allowances given by traders for second-hand vehicles.

As regards spare parts and accessories, the commission point out that the margins afforded to traders are substantial, and that the protection afforded to the home manufacturers of such goods tends to reduce the extent of competition in the market. The commission are of opinion that price competition between traders in spare parts and accessories would provide a safeguard against excessive margins and serve to ensure economy in distribution. The commission consider, however, that a supplier should be allowed to fix maximum prices for parts and accessories. With regard to tyres, the commission refer to the exceptionally strong position of the manufacturer in the market and point out that this removes any risk to the manufacturer which might be said to lie in the abolition of minimum prices. The commission deem it advisable that the individual supplier should be allowed to withhold supplies of tyres from a trader who resells the tyres at or below the price at which he purchased them. The commission consider it undesirable that minimum charges for technical repair and maintenance services should be fixed or enforced either by an individual assembler or by an association, but they see no objection to the fixing of maximum charges for such services by an assembler acting solely on his own initiative.

Referring to the practice of exclusive dealing in the trade, the commission point out that there are certain advantages, as well as some risks, attaching to the practice. It enables the assembler to exercise a considerable measure of control over the distribution of his goods, and provides him with an incentive to develop the efficiency of his dealers. On the other hand, if extended in this market, it could lead to the control by a few of the larger assemblers of the principal retail outlets, and, if widely adopted, would result in an increase in the costs of distribution. The commission have not recommended any basic modification of the system as it now operates but have stated that, should the practice be extended or be made more restrictive, the commission might consider it desirable to review it in the light of the altered circumstances.

With the object of removing the abuses which exist and restoring conditions of free and fair competition in the trade in motor goods, the commission recommend in their report that an Order should be made prohibiting the particular practices which are considered to be harmful to the public interest. The commission recommend that resale price maintenance should be prohibited and that it should be made possible for traders to determine their own selling prices in the light of their own operating costs. As a corollary, there should be a prohibition on the collective fixing of trade-in allowances for second-hand cars or of minimum charges for technical services. To provide a safeguard against the possibility that price competition in the trade may occasionally become excessive, suppliers should be free to withhold goods from a person who resells at a price equal to or less than the purchase price and fails to give an acceptable undertaking to discontinue doing so. A supplier should also be entitled to withhold supplies of new motor vehicles from a person who advertises for sale of a new car at a price less than the list price indicated by the supplier and fails to give an acceptable undertaking to discontinue this practice.

As regards the arrangements and practices adopted by the trade with the object of regulating the channels of distribution, the commission recommend that it should be made unlawful for a supplier to withhold supplies from a trader on the grounds that the trader is or is not a member of a particular organisation or association or because the trader's name does not appear on an approved list. It is also recommended by the commission that no trade association should be permitted to coerce a supplier to withhold supplies from any person, and that no association should be allowed to prepare or publish lists of approved or non-approved persons which are likely to restrict entry to the trade in motor goods or to be used as a basis for regulating or influencing the supply and distribution of such goods, or the terms and conditions on which such goods will be supplied. The commission recommend that it should be made unlawful for any person to secure a boycott of any supplier on the grounds that the supplier has refused to do any act which would be contrary to the terms of the Order.

There are, finally, two recommendations by the commission regarding the imposition by individual manufacturers or assemblers of terms and conditions for the acceptance of orders. Firstly, it is recommended that a manufacturer or assembler should be permitted to impose conditions covering such matters as the size and frequency of orders, the functions of garages and the services to be rendered to the public. The only reservations are that these conditions should be reasonable, that they should be equitably applied to all persons seeking supplies and that they should be filed with the commission, which may, if circumstances at any time so require, make fair trading rules in relation thereto. Secondly, it is recommended that there should be a prohibition against a manufacturer or assembler differentiating between customers for resale who should, in the normal way, be supplied on the same terms and conditions having regard to the size and the frequency of their orders. The commission do not consider that a manufacturer or assembler should be prevented from advertising or specifying a maximum resale price or from withholding supplies from a trader who sells at a price in excess of the maximum price. Any such specified price should not, however, be binding on traders as a minimum price.

It should be noted that the commission have not recommended any basic modification of the existing system under which assemblers are free to arrange their own channels of distribution through the appointment of main dealers and sub-dealers of their own choice.

I have given careful consideration to the recommendation of the Fair Trade Commission. I am of opinion that the commission are fully justified in making the recommendations which are contained in their report and I agree entirely with these recommendations. I am satisfied that it is unfair that manufacturers and assemblers of motor goods, all of whom enjoy the benefit of tariff or other protection, should discriminate against traders by refusing to supply them on the grounds that the traders are not approved by a particular trade association. I am of opinion, also, that it is wrong that it should be within the competence of vested trading interests to restrict or regulate the right of new traders to enter into the trade. I am satisfied that it is contrary to the interests of the consumer that competition should be restricted both by the operation of arrangements between manufacturers, assemblers and distributors to regulate the channels of distribution and by the enforcement of minimum resale prices for motor goods.

I have made an Order to give effect to the recommendations contained in the Report of the Fair Trade Commission and a copy of the Order has been circulated to Deputies. Section 9 (3) of the Restrictive Trade Practices Act, 1953, provides that an Order of this kind shall not have effect unless it is confirmed by an Act of the Oireachtas. The Bill now before the House is the Confirmation Bill which is necessary to give the force of law to the Order.

Since the Order was published it has been represented to me that it will, when confirmed, have adverse effects on the level of employment and on wage rates in the motor trade. Employment is given in the assembly of motor vehicles, in the manufacture of motor goods and in garages on servicing and repair work. The Order can have no effect on the public demand for motor vehicles and other motor goods or on the public demand for essential servicing and repair work. It is, therefore, ridiculous for anyone to suggest that this Order can have any effect, however remote, on employment or wage rates in the industry.

It has been suggested to me also that the Order may result in a lowering of the standard of skilled service provided by garages. I must repudiate this suggestion also. The position is that, under Article 14 of the Order, an individual assembler will be free to impose reasonable conditions as to "after sales" service on motor traders. Since assemblers must protect the reputation of their brands, it may be taken as certain that traders selling their particular brands will continue to give efficient "after sales" service. Of course, the "after sales" service is only a small part of the repair and maintenance work done by garages. Most of such work is undertaken subject to charges made to car owners. Any garage which, in the manner of repair and maintenance, does not give the motorist value for his money, will find that it is losing business.

It has been said, also, that the abolition of the Approved List system will mean that anyone who wishes to enter the motor trade will have to be given motor goods on trade terms and that the abolition of resale price maintenance will give rise to conditions of "cut throat" competition in the trade. This Order will not involve any basic modification of the present system under which assemblers are free to arrange their own channels of distribution through the appointment of main dealers and sub-dealers of their own choice. Furthermore, as I have already explained, all car assemblers, as well as suppliers of other motor goods, will, under Article 14 of the Order, be free to apply to the acceptance of orders conditions covering such matters as the size and frequency of orders, the functions of garages, and the services to be rendered to the public. The only reservations are that these conditions should be reasonable, that they should be applied equitably to all persons seeking supplies and that they should be field with the Fair Trade Commission, which may make fair trading rules in relation thereto.

On the subject of resale price maintenance it is accepted by the trade that about 90 per cent. of new car sales involve the acceptance by the dealer of a second-hand car in part exchange. There is at present no control by the Irish Motor Traders' Association over trade-in allowances for used cars. In these circumstances the operation of resale price maintenance in respect of new cars tends to be anomalous and arbitrary. It is clearly indefensible to discipline a trader for reducing the price of a new car while action having an equivalent effect is permissible in the great bulk of similar transactions. The fact is that price competition in the trade in new cars exists at present and the only effect of the Order will be to allow that competition to come into the open. I have already drawn attention to the fact that, subject to certain safeguards, the individual assembler will be at liberty to withhold supplies from a trader who has advertised new vehicles for sale at less than the assembler's list prices.

In conclusion, I should, perhaps, refer briefly to the proceedings which have been initiated in the High Court seeking, inter alia, a declaration that the Restrictive Trade Practices Act, 1953, is unconstitutional. The hearing of the action has not yet commenced and I do not wish to say anything that might be regarded as prejudicing the hearing, but I consider that, having regard to all the circumstances, it would be proper that the Oireachtas should proceed with its consideration of Bills for the confirmation of Orders relating to restrictive trade practices.

In the case of confirmation Bills of this kind, the arrangement is that the Order, which it is proposed to confirm, would not be capable of being amended by the House but would be accepted or rejected as it stands. The matters dealt with in the Order have been the subject of a detailed public inquiry by the Fair Trade Commission, and the arguments in favour of adopting the provisions embodied in the Order are set out fully in the commission's report. I have no hesitation in commending to the House this Confirmation Bill which, on enactment, will, I hope, put an end to unfair restrictive practices in the trade in motor goods.

Mr. Lemass

The Order which this Bill seeks to confirm is in my opinion almost meaningless and certainly useless. I have read with considerable care the report of the Fair Trade Commission and I have listened now to the Minister. I have got no indication of why the commission on the one hand recommended the Order and why the Minister on the other decided to accept it.

Like the Minister, I have had representations made to me that the making of this Order would have adverse effects upon the level of employment, upon wage rates in the trade or upon the standard of service given to the public. The Minister has been at pains to point out that these fears are groundless because, as he rightly said, the Order will make no practical difference in the methods by which the trade is carried on.

When I introduced the Restrictive Trade Practices Bill in the Dáil in 1953 it was my intention—I expressed that intention at the time—that the powers given under that Act to the Fair Trade Commission and to the Minister for Industry and Commerce should be used only where it was clearly demonstarted, following an inquiry, that practices were in operation which were demonstrably contrary to the public welfare.

The aim was to eliminate any tendency towards building up monopoly conditions in a trade, preventing the operation of rings and discouraging collective agreements to fix prices or margins in a way which would mean that the public were not being given the benefits of fair competition.

I certainly had not intended, and I think I should now protest against, the powers given in that Act being used for the purpose of producing a perfectly harmless and ineffective Order made merely, I think, to show some sign of activity in this field. I should say that, in my view, the powers given by the Restrictive Trade Practices Act should not be used unless there is a clear case made for using them, that the bias should be against interference by the State in the conduct of private business rather than that interference should be resorted to if any justification for it could be advanced. The Minister and I may have a different outlook in that regard but I am sure the majority of Deputies would argue that the State should not interfere in the practices of privately owned business unless it can be shown beyond doubt that the public interest is being prejudiced. It is not merely enough to have some show of justification for interference; the burden of proof is on those who propose that interference should be resorted to.

It is true that on previous occasions in this House we have had discussions about the motor trade. Some years ago many Deputies availed of their rights here to draw attention to the difficulties which garage proprietors were then experiencing in obtaining supplies of motor vehicles or parts or other requirements. Most of the complaints related to petrol, and I think it is true to say that much of the discussion that was then conducted concerning difficulties experienced by retailers in securing supplies of petrol helped to create the atmosphere which secured general acceptance for the Restrictive Trade Practices Act when it came to the Dáil as a Bill.

The Fair Trade Commission is recommending this Order relating to motor vehicles, spare parts and accessories; it has also made fair trading rules relating to petrol and it is rather interesting to contrast the views of the commission regarding vehicles and parts and other supplies on the one hand and on the other, petrol, the one commodity in respect of which there was a considerable volume of complaint with regard to the effect of restrictive practices in operation. This Order deals in most of its provisions with the abolition of fixed price maintenance. I have expressed the view here already that there is no public interest affected by arrangements made by manufacturers or suppliers to fix the prices of their commodities when there is a substantial number of manufacturers in active competition with one another for trade and, indeed, in such circumstances the fixing of retail prices by manufacturers or suppliers is often desirable in the public interest.

In the motor trade all the evidence revealed in the report shows there is active competition between all suppliers. There is no suggestion of collaboration between the assemblers of motor cars in respect of prices or margins or anything else. The commission clearly shows in its report that there is no uniformity of practice either in regard to price arrangements, or the calculation of discounts or the conditions imposed upon agents by assemblers. Indeed, it is pointed out by the commission, and the Minister has admitted in his speech, that the efforts of the suppliers to fix and publicise the prices at which their products are available to the public has more or less broken down, that these arrangements are anomalous and ineffective, in the circumstances where, as the report indicates, more than 90 per cent. of the cars are sold in this country following individual bargains between the purchaser and the trader as to the allowance that is to be made for the traded-in, second-hand car.

The only interest which assemblers or manufacturers of cars have at the present time in the margins secured by traders is to ensure that these margins remain big enough to permit the traders to give to the public the after-sales service which the manufacturer has contracted will be given. In many cases it is appreciated that the trader seeking business allows on a second-hand car a price which is more than he can hope to secure when he sells it, cutting down on his margin, and trying to make good that loss by scrimping on service given to the purchaser, by defaulting on the manufacturer's contract of free after-sales service.

There is no substantial difference being made in the practice in that regard by this Order. At the present time, with conditions now prevailing in the motor trade, it is rather ridiculous to be talking about legislation to prevent the fixation of minimum prices by manufacturers as every Deputy in the House knows that sales of motor cars, burdened as they are by high import levies and high petrol taxes, have substantially contracted and that there is intense competition between all suppliers to retain their share of the contracting market.

The Minister talks about bringing competition in this trade into the open. Any Deputy who reads the newspapers will realise how much in the open it is. As I have said, as a general principle, there is no objection to retail price-fixing where there are a number of suppliers in active competition with one another. It is an entirely different situation if a number of suppliers get together and agree to charge uniform prices or to allow uniform discounts to the trade, or agree to some arrangement between themselves in respect of their prices. Is not that situation to-day operating in regard to petrol? But in this publication of the Fair Trade Commission and the fair trading rules relating to petrol there is not a word about price.

Everybody knows that the practice has now developed in the petrol trade of exclusive dealing contracts between suppliers and retailers. The retailers contract to sell only the brand of petrol marketed by one supplier. In many countries that is regarded as the most objectionable type of restrictive practice; in some countries they have specifically legislated against it. Whatever the merits of the case for that legislation may be, we know that that practice exists here and that the Fair Trade Commission having examined the matter, presumably with all care, has not decided it should be abolished. On the contrary, they have made fair trade rules which permit its continuation.

The motor assemblers and importers are not being prevented by this Order from making exclusive dealing arrangements with agents, with individual retailers, and imposing in these arrangements conditions as to the size of their establishments, the maintenance of stocks of spare parts, the employment of skilled, especially trained mechanics or the services to be given to the public.

The one condition that has been imposed is that supplies must not be refused on the ground that the trader is not a member of the association or on an approved list, and indeed all the evidence given to the Fair Trade Commission indicated, and the commission's report said, that it has not been the practice in the trade to refuse supplies on those grounds in regard to certain accessories or parts manufactured, on a comparatively small scale, in this country. The fair trading rules made by the Fair Trade Commission contemplated that the practice of confining supplies of petrol to persons operating motor garages should be continued, and we know that the practice is likely to continue in so far as supplies of motor vehicles and spare parts are concerned, and is permitted to continue.

Most Deputies will agree it is desirable that trading in motor cars or parts or supplies for motor cars should be confined to those engaged in the motor business. It would, on the whole, be detrimental to the public interest if permission were given to publicans and hoteliers and so forth to install such things as petrol pumps for the supply of petrol, or for the giving of any other service. It is clear that if the sale of parts and accessories by persons not in the motor trade were encouraged not merely would there be a debasement of the conditions of employment and a threat to the wage rates of mechanics engaged in the trade, but there would, in some cases, be a danger that defective fitting of parts and equipment might result. We all know, there is a safety factor operating in this business as well.

If it has been accepted, as it appears the Fair Trade Commission and the Minister have accepted, that the trade in petrol is to be confined to garages, that the trade in motor cars and spare parts and accessories is to be confined to those who are in the business, why is there not a definition in any of these orders as to what constitutes a motor trader? The main motor suppliers, the firms which hold the dominant position in the trade, will have no difficulty. There is competition among the retailers to get their business. None of the assemblers has any difficulty in getting the principal garage owners in any area to take agencies for them. On the contrary, they have the opportunity of picking and choosing between the various applicants to get those who are best equipped and best located to serve the interests of their business. The smaller businesses and many of the manufacturers of parts and accessories have not got the same facilities for finding out the status of the individual retailers seeking their business.

It seems to me, therefore, that the Fair Trade Commission and the Minister have allowed this theoretical objection to the maintenance of an approved list to lead them into an impracticable position. I am completely against the operation in any trade of a system which confines the right to enter the trade to persons who are members of an association or confines the right of entry to persons approved by an association; but it is clearly not undesirable there should be some institution or arrangement by which the status and the qualifications of persons seeking supplies in this trade can be checked.

As I said earlier, the big petrol companies have no difficulty; the main motor manufacturers have no difficulty; the small manufacturers may have some difficulty; the traders in various classes of accessories and parts may have considerable difficulty. It is for them a convenience that there is in existence an organisation which checks the competence and the status of traders seeking supplies and that there is a list of persons who are qualified to engage in the business. It seems that the evidence adduced to the Fair Trade Commission establishes the fact that the Irish Motor Traders' Association limited their activities in this respect to checking up on the qualifications, status and competence of those who sought entry into the trade.

Perhaps the qualifications were too onerous. Perhaps the association tended to increase the qualifications. That is a matter that could be rectified, but there is no evidence that the association sought to confine their approved list to their own members or refused entry to the list on the ground that there were a number of other traders in a locality. If there is a complete elimination of that arrangement in the trade by which a supplier of any goods can check on the status or competence of the person seeking to enter the trade through the association, what is to replace it?

There is no definition attempted by the Fair Trade Commission in their rules relating to the motor trade. There is strong objection, and always will be, to any private organisation of motor traders setting up the right for themselves of arbitrating and deciding upon matters of this kind without, at any rate, important checks upon their powers and continuous supervision over their operations. I understand that the Motor Traders' Association went to the Minister and put this opinion to him. Did the Minister suggest to them that they should seek to have set up by the Fair Trade Commission fair trading rules which would define the future functions and the future sphere of operations of the association? When the association went to the Fair Trade Commission, the commission said they could not draw these rules if this Order became law. There was a request for time to enable the position to be reviewed and why is that time refused?

What purpose has the Minister in bringing this measure before the House at this stage of the Dáil's programme? In operation it will make no difference whatsoever in the motor trade, and I speak there with some experience. In so far as the suppliers of vehicles and parts are concerned, the existing practices will not be changed one iota. The measure will provide a certain amount of confusion. Normally the manufacturer of parts such as sparking plugs, glass, etc., when asked to supply a new retailer would ring up the association, or take a look at its list. There is nothing in substitution for that practice now. That is a situation which can be rectified by the drawing up of fair trading rules which would arrange to keep the exercise of the powers and functions of the association under supervision and which would provide an effective channel by which the information required by the trade could be made available without the danger of leading to the development of restrictive practices.

I suggest that the Minister should postpone this Bill. It could be contended that in present circumstances it is rather foolish to bring this Bill forward at all. The whole thing can be left over until November and, in the meantime, the association and the Fair Trade Commission can get down together and draw up, in agreement, fair trading rules which will eliminate all risk to the public interest and, at the same time, continue in operation an organisation which has given use-all risk to the public interest and, at the same time, continue in operation an organisation which has given useful service to a very important trade in this country. I would strongly urge upon the Minister that he should do what I am suggesting now, postpone the completion of the enactment of this measure to give time to the examination of that position.

Mr. A. Barry

I wish to intervene to speak on behalf of Henry Ford & Son of Cork. They have a certain grievance in respect of this report. They feel that the report did not stress sufficiently that the firm of Henry Ford & Son have never combined with any other group or association of manufacturers or employers. They have always acted very independently and they feel that the important submissions to the commission were not embodied in the commission's report as were the submissions of group organisations. Therefore, I must make use of this debate to publicise that fact in the interests of Fords who have been, after all, the premier and pioneer assemblers of cars in this country. They came to this country in 1919 without any incentive of tariff and have been noted industrialists here ever since.

The case they have made—and I think it is a very important case in the matter of price maintenance—is that their list for spare parts has proved to be a major protection for the consumer, and I believe that to be true. I have already stated on three or four occasions my general attitude about this kind of legislation. I do believe that price maintenance of any kind by a combination of manufacturers is bad in the public interest, but this is a free economy and we should let a free-for-all take place. I agree with the last speaker that the motor trade competition at the moment is too great. In regard to Ford's I think it can be said that for the last 40 years they have given the Irish people and indeed the people of the world good value in motor cars. They have been completely independent. They have refused to combine with anybody else and their attitude towards price fixation has been more in the public interest than that of many other manufacturers.

Mr. Norton

If Deputy Lemass had not introduced this Restrictive Trade Practices Bill, and if I had not supported it and had not a clear recollection of the discussion which took place when this Bill was introduced, I would not have thought by his speech this evening he had the remotest association with the Act as it is in operation. The Deputy made a speech this evening as if this had nothing to do with him, as if he had no responsibility in the matter and as if this was something which should not have been done. He gave the impression that the Restrictive Trade Practices Bill was something, as he said, to be left alone unless, as he alleged in this case, somebody wants to make a show of activity. Let the House and the country be clear that Deputy Lemass, as the Minister for Industry and Commerce, was responsible for the introduction of the Restrictive Trade Practices Bill which was passed into law, and if the Deputy finds it inconvenient now to acknowledge paternity of that Act I just cannot help him in the matter.

Mr. Lemass

We are proud of it in Fianna Fáil.

Mr. Norton

I will travel with the Deputy so long as he maintains that pride, but when the Deputy wants to ride two horses in this matter, take pride in the Restrictive Trade Practices Bill and, for the purpose of the motor car industry, say: "Please do not operate the Bill so far as that industry is concerned," I will part company with him there.

Mr. Lemass

That is not the case I made. My case is that this Order makes no difference whatever to the motor car industry. It does not alter in the slightest degree existing practice.

Mr. Norton

I have already made my case to the House and I do not intend to cover the same ground again. The general theory underlying this Bill was that you set up a Fair Trade Commission. That commission was appointed by Deputy Lemass and the members of that commission in the main are the same people as were appointed by Deputy Lemass. Deputy Lemass's own commission, on its own initiative, decided to undertake this inquiry in accordance with the Act passed in the Dáil on the recommendation of Deputy Lemass, the then Minister for Industry and Commerce. He asks the House to give him the authority to create this commission. He gives the commission certain functions. He appoints the commission and it functions in accordance with the powers given to it by Deputy Lemass. When all that is done Deputy Lemass comes into the Dáil and says: "That is all right for everything else, but it is not good enough for the motor trade."

If I had closed my eyes while the Deputy was speaking instead of keeping my eyes on the Deputy in amazement and my ears wide open, I could have come to the conclusion that it was the Motor Traders' Association that was speaking to me. I saw the Motor Traders' Association and discussed the whole matter with them at considerable lengths. I think it is true that they subsequently misunderstood what was said at the meeting in imagining that this Order could be scrapped, that everything could be forgotten and that they could go back to the Fair Trade Commission. In the minutes of the discussion which were not taken by me, which were taken in the presence of the Secretary of the Department, who was a former member of the Fair Trade Commission, it was pointed out to the motor traders what the precise effect of this Order was. Deputy Lemass now says: "Stop this procedure. Do not put it into operation. Let the motor traders go back to the Fair Trade Commission and the Fair Trade Commission will make fair trading rules."

Mr. Lemass

I said postpone this Bill until November and give the Fair Trade Commission an opportunity to consider it.

Mr. Norton

What has the Deputy to say about this situation which I now bring to his notice and to the notice of the House? Before the Fair Trade Commission held its inquiry at all, the Motor Traders' Association and the motor trade were given the option of having fair trading rules drawn up by a Fair Trade Commission and that offer by the Fair Trade Commission was not accepted by the motor traders. I do not know whether Deputy Lemass knew that or not but now we are asked to give these people an opportunity of going back to the Fair Trade Commission. If they had been reasonable and sensible they could have gone there before this expensive inquiry was undertaken, but they did not go there. When I asked the deputation: "Why did you not go to the Fair Trade Commission and obtain agreement on fair trading rules?" they said: "We cannot agree among ourselves." That was the explanation they gave to me and now having failed to accept the offer which was made to them, having explained to me that they could not agree among themselves, the recipe offered is to suspend action and let them have another crack at the Fair Trade Commission.

Public sittings were held in this matter on 15 days extending from the 14th September to the 29th November 1954 and a number of private sittings were also held. Ninety-one witnesses were examined. After 15 days public hearing, 91 witnesses examined, nobody can say the matter has not been fully considered. Nobody can say that this long list of witnesses set out here on pages 113-14 did not get a chance of presenting their case. All these considerations were dealt with by the Fair Trade Commission. That commission had the trouble and responsibility of doing all that because the motor traders, on whose behalf Deputy Lemass speaks this evening, were not willing to accept the offer which was made to them by the Fair Trade Commission before all this time was spent and all this trouble was undertaken by the commission.

Deputy Lemass says this is doing nothing more than giving reality to what in fact is a practice. I wonder if that is so? Bear in mind that this commission's report quotes the rules of the Irish Motor Traders' Association at Appendix 13. I want to quote only from page 139 of the report, Rule 43 of the rules of the association. Under the heading of "Stop List", these rules provided: "Where a member of the association, being a manufacturer or a wholesaler, supplies any description of goods subject to a condition that such goods are not to be sold at prices higher or lower than the list price, such member shall be bound to take effective steps to have such condition carried out by all customers." Then it goes on: "No member of the association, being a retailer, shall sell any description of goods by retail at a price higher or lower than the list price in breach of the conditions subject to which the goods are supplied to him." You are told that once you pay your subscription to the association you not only swallow that and accept it but all the other rules as well.

A body known as the Irish Motor Traders' Association sets itself up to look after the interests of the motor trade. In the course of doing that, it endeavours to organise all the retailers who come into the organisation. It says to them: "Under no circumstances must you sell a motor car or any part of a motor car or any piece of equipment for a motor car at a price less than that prescribed by the man who made the car even though you have paid the man for it long ago." Under this rule, a main dealer could buy a motor car or a tyre or any other piece of equipment and pay the assembler or the manufacturer for the car or the tyre or the piece of equipment and then the commercial transaction between them is over. However, if he dared to sell that tyre to the car part even to his own brother or mother he is guilty of an offence under these rules, and to be guilty of an offence under these rules for selling the car or the article at a price below that fixed by the assembler or manufacturer meant that he earned the title to go on the "Stop List". When he went on that list he found he could get no more parts from the assembler or manufacturer.

In my opening statement, I quoted the profits allowed in the case of main dealers and sub-dealers. Main dealers in spare parts and accessories supplied by assemblers were allowed discounts from 25 per cent. to 33? per cent. If you sold a spare part with a profit of 32 per cent. and did not charge 33? per cent. the Motor Traders' Association could put you on the "Stop List" and, when you got on that list, you lost all future supplies and your livelihood as well. Apparently Deputy Lemass says: "It does not matter; let that situation go along."

Mr. Lemass

That is a complete misrepresentation of what I said.

Mr. Norton

Everybody can read what Deputy Lemass said and what I said.

Mr. Lemass

Read what the commission says.

Mr. Norton

I have. I am now reading for the public and the House what the Motor Traders' Association say.

Mr. Lemass

The Motor Traders' Association has nothing to do with me. I am not concerned with any justification of them.

Mr. Norton

Thank God, the Deputy is not because he made a better case this evening for them than they made themselves. Thank God, the Deputy is not associated with them. So far, as those who are supplied with these cars, spare parts and accessories of one kind or another are concerned, unless they charged the full price prescribed by the suppliers they ran the risk, in fact the certainty, that they would be put on the "Stop List" and lose supplies for the future.

Mr. Lemass

How does this Order change it?

Mr. Norton

Because retail price maintenance has been burst by this Order.

Mr. Lemass

No.

Mr. Norton

Will the Deputy then tell the motor traders not to waste the time of my assistants wailing about that?

Mr. Lemass

The Order prohibits collective arrangements. The commission said there were no collective arrangements. Did the Minister read the report at all?

Mr. Norton

I did not make the mistake your motor trader friends made. I do not think they understood it.

Mr. Lemass

This is an important trade.

Mr. Norton

This Motor Trade Association functioned for the purpose of preparing an approved list. A person could not get goods from the manufacturer unless he was on the list.

Mr. Lemass

The commission said that was not true and quite a number of manufacturers ignored the approved list.

Mr. Norton

One of them does not confine himself to the approved list and does not take dictation from the association. I do not propose to finger through the report to find the relevant reference. The Motor Traders' Association are annoyed with this report. What is the explanation of the annoyance? Is it because a vested interest has been broken up or because this report does nothing at all beyond continuing the present situation, as Deputy Lemass says?

I do not blame these motor traders. It just depends on where you stand in relation to this matter. Do you want to take the view that it is the job of the motor traders to get together an organisation which will be invincible to pressure, in which all the members will take a firm vote to gang up together and agree to do the one thing and stand against the public interest and protect the motor trade, in which they will not cut prices, into which they will allow only certain people and in relation to which they will cast rules in such a way that, while certain people can get in who do not fulfil the conditions—and have got in—people will be asked to comply with, in most cases, impossibly high conditions to keep the membership down? If you feel the further object is to prevent anybody from selling at less than the fixed price, because of risk of a boycott movement from the fixed prices arrangements, that is all right for anybody who believes it. That is the point of view of protecting the motor traders.

My function is not to protect the motor traders but to protect the community interest. This Bill was introduced for the purpose of protecting the interests of the community. I cannot look on this matter from the angle of motor traders who want to keep an invincible grip on the trade and want to be rendered immune from public regulation of the trade. But the public interest is involved in this matter. A Fair Trade Commission, one associated with the motor trade, appointed by my predecessor, Deputy Lemass, investigated this matter for 15 days, heard 91 witnesses and, at the end of that period, presented this report.

I am putting it to the Dáil that, on the case made in this report, the Dáil ought to give a Second Reading to the Confirmation Bill. The only case made by Deputy Lemass is: "Go slow. Postpone this. See if you could not deal with the matter by means of fair trade rules drafted by the Fair Trade Commission." A body whose case is precisely the same as that made by Deputy Lemass this evening got the opportunity of going to the Fair Trade Commission before the commission embarked on this long and detailed inquiry. They did not avail of the offer made to them. I do not believe that there is, even to-day, any use in sending them back there again even if that were now possible. I do not think that, when a report of that kind is presented, when the Government has made an Order on it, when I have complied with the procedure envisaged by Deputy Lemass when he introduced the Bill to this House, we should be expected to wait on the convenience of the motor trade.

Question put and agreed to.

Acting-Chairman (Deputy Sheldon)

Next stage?

Mr. Lemass

I have no objection to taking it now subject to the fact that I want to say something. I will say what I have to say on the Committee Stage, if it is so desired.

Agreed to take remaining stages to-day.

Bill considered in Committee.

SECTION 1.

Question proposed: "That Section 1 stand part of the Bill."

Mr. Lemass

Let us be quite clear about some of the matters the Minister has been talking about. It is deplorable that the Minister refuses to consider objectively observations made here. That, I think, is a fault of the Minister. He usually sets up a bogey and then proceeds to knock down the bogey. In this particular case he decided that the bogey to be set up is the Irish Motor Traders' Association and that he should deal with it as an enemy. I think that is a wrong approach.

The aim of the Minister and of the Fair Trade Commission should be to ensure that there is introduced into this trade such conditions as will encourage and permit of the development of the trade while at the same time protecting the public against any abuses occurring within it. It is a good thing that the Fair Trade Commission held this inquiry and that the result of this inquiry has been published, but I assert that anybody who reads the report of the Fair Trade Commission will come to the conclusion that the result of the inquiry is to establish that restrictive practices in the motor trade are generally non-existent and that such of them as do exist can be easily remedied without all this unnecessary State regulation of the conduct of the trade.

There was one section of the trade in respect of which that is not true and that is the trade in petrol. In the case of petrol, there exists everything that we were directing the Restrictive Trade Practices Act against—agreement between suppliers to maintain a uniform price, to maintain uniform margins for traders, to supply only one brand of petrol to one trader and to refuse to supply any other trader in that locality with that brand of petrol. But, the commission, having investigated that position, decided to allow it to continue and drafted fair trading rules expressly framed to allow that situation to continue. In relation to the rest of the trade, in respect of which there were no such practices, where all the evidence is of intense competition between all the suppliers, of no collaboration between them to fix prices or margins or anything else, there is to be legislation to control and continuing State investigation of the conditions in the trade.

The Minister thinks he can score a point by representing me as the protector of the motor traders. I am not objecting to that description. I hope I will be the first in the Dáil to urge action against motor traders or any other group of traders who combine to establish restrictive practices or who in any way act contrary to the public interest, but I think there is an obligation upon some Deputy to try to protect motor traders and every other class of traders when they are being subjected unnecessarily to State regulation.

The Minister had people come to him who said that this Order will so alter conditions in the trade that it will cut down the employment it gives, cut down the wages it pays or cut down the services it gives to the public. The Minister, quite rightly, said that these fears were unfounded. On what basis did the Minister put forward his contention that these fears were unfounded? Because, he said, the Order will not involve any basic modification of the present system. Is not that the case? Did not the Minister use these words in his introductory statement? Is not the case he is making against the argument that the operation of this Order will involve a deterioration in the employment or the wages in the trade or the service to the public, that it will not make any basic alterations in the system at all?

I agree that it will make no basic alteration in the system. I agree that the Minister is right in his contention that the making of this Order will not by itself affect employment, wages or anything else in the trade because this Order will not alter by an iota the practices carried on in the trade in as far as manufacturers, the assemblers of motor cars, manufacturers of parts or accessories or any of these firms who are engaged in trade in motor cars or motor parts are concerned. But, the argument I put forward is that the Order is defective in so far as it does not define what a motor trader is. The Fair Trade Commission agreed, and I agree and I think the whole House will agree, that it is desirable to confine trade in motor cars and in motor-car parts and in petrol to legitimate motor traders, to people who can give the service to the public that the public are entitled to expect from a motor trader. It is undesirable that unqualified people should be allowed to put spare parts on a car or undertake repairs of motor cars or in any way come into this business under conditions which might create risks of bad service to the public and consequently increase the danger on the highways.

From every point of view it is desirable that the trade in motor cars and motor-car parts and supplies for motor cars should be confined to bona fide motor traders. We are all agreed about that. The commission agrees, I agree, the Minister agrees and I think the whole House agrees. But, how can that be done? It can be done in various ways. It can be done by setting out in law a definition of a motor trader, a trader who is entitled to his supplies, entitled to engage in this business. I would be against that. It would be a further form of State regulation and unnecessary in the circumstances. It can be done by the Minister setting up an approved list of his own and saying that persons on his approved list are qualified to receive supplies on trade terms and to engage in the sale of these goods.

The existing practice has been that an organisation called the Irish Motor Traders' Association set up an approved list. To get entry into that list, I understand, a trader had to have a garage of a certain size, certain minimum equipment; he had to employ a skilled mechanic and, provided he conformed to these conditions, the name of the trader went on the approved list.

The Fair Trade Commission said that the conditions were too onerous, that the garage floor area specified was too large, that the machinery which the association said had to be installed was too elaborate to enable a motor trader to carry on. That may be so. I do not know whether it is so or not. The commission also said that the association tended to intensify these conditions, to make them more onerous so as to restrict entry into the trade. If that is so, it is undesirable.

I do see a function to be served by having in existence an association which will carry out the inquiries around the country which traders in motor cars and motor supplies wish to have made as to whether in fact an individual is a motor trader or not, whether he is qualified to sell these goods at all or not. I think the association could serve that purpose, provided it operated in accordance with rules drawn up by the Fair Trade Commission and provided it acted under its supervision.

I am not against the making of this Order. The making of the Order will make no difference whatever in the actual conduct of the trade but the Motor Traders' Association who went to the Fair Trade Commission asked the commission to draw up rules to define what they were to do and what would be the limits of their powers and their functions in the new circumstances. They were told that the Fair Trade Commission could not draw up fair trading rules, that the bringing in of this Order would preclude that possibility. I do not know whether the Fair Trade Commission was right in their view. In that connection, while it is true that I was responsible for the legislation and that I appointed most of the members of the Fair Trade Commission, I did not give them a certificate of infallibility when I was Minister, any more than I would accept them as infallible if I were Minister now. I would read their reports carefully, but I would certainly make my own decision as to whether the report should be given effect to in legislation.

The fact the commission recommend that an Order should be made is not sufficient reason for making the Order. The Order is not supported by the actual terms of the commission's report and it is not supported by the evidence the Fair Trade Commission was able to extract from the inquiry into the conditions of the trade.

I say to the Minister that in so far as this Order will not make any difference to the actual conduct of the trade —in fact, the Minister said so in his speech—and in so far as the circumstances which last year, when the commission were holding an inquiry, might have justified the making of an Order, have completely changed; in the present circumstances of the motor trade the Order should be postponed until the commission can see whether it is possible within the law to draw up fair trading rules which will permit the Motor Traders' Association to carry on doing the work for the persons engaged in the trade and making inquiries, etc., affecting those in the trade who are seeking supplies of goods.

Most of these trade associations have different functions to serve for different people associated with them. So far as the motor-car assemblers are concerned, I do not think the Motor Traders' Association serve any purpose whatever other than to carry out collective wage negotiations. It is a trade union and is used by the motor-car assemblers for the purpose of drawing up collective wage agreements. So far as I am aware, it serves no other important function whatever, except perhaps as a channel of information and a centre of discussion.

Deputy Barry mentioned that two of the principal motor assemblers in the country were not in the association. They are not mainly because they did not want to be associated with the collective wage agreements. In so far as the manufacture of a great number of small items for motor cars, including fittings of various kinds, are concerned, all that information is got through the Motor Traders' Association. It is trade information which would cost them a great deal to obtain if they had to set up their own organisation for these purposes. For providing a means of discussing the conditions of trade and a channel by which the views of the trade can be conveyed to the Minister for Industry and Commerce the association has useful functions to serve. It believes that it cannot fulfil all those functions if this Order becomes law.

The association think they cannot and the Fair Trade Commission told them they could not. I suggest that this Order should be postponed until November in order to give these parties an opportunity of getting together to see if there is any way by which that situation can be solved.

Mr. Norton

I cannot help thinking that if Deputy Lemass had been correctly informed he would not try to make the case he made this evening. He made a lot of play of the point as to who was a motor trader. It is a matter for the individual motor assembler to define that for the purpose of Section 14 of the Order. In that connection the motor assemblers and manufacturer were pretty alert up to the moment and they will obviously make sure themselves that they will not supply goods to non- bona fide traders.

Mr. Lemass

It does not affect the assemblers of motor cars at all.

Mr. Norton

The Deputy raised the question as to how you would find out who was a motor trader. The obvious person is the person who is going to sell the parts. If the manufacturer finds out that the fellow was a sweep or a chemist instead of a motor trader he probably will not give him his goods on credit to be parked in a place to which people do not go to when they order motor cars or parts.

This Order does much more than deal with price maintenance. It deals with other restrictive practices as well. One of the restrictive practices with which it deals was the practice of keeping bona fide applicants out of the motor trade. The bona fide applicants were kept out of the trade, are being kept out of the trade and will be kept out of the trade unless we have an Order of this kind. I have got the minutes of my discussion with the motor traders now and I will give the Deputy the benefit of it.

I saw the motor traders on the 4th June. In the course of the discussion with them—I am reading from the minutes—the minister inquired whether the trade had considered the alternative of accepting fair trade rules rather than have a formal inquiry. That is what Deputy Lemass suggested might be done now after the inquiry was heard. Let me quote again from the discussion. Mr. Blank for the motor traders said they would like to make it clear in fairness to the commission that they had been offered fair trade rules at the outset. Mark that. They were offered fair trading rules at the outset. The view of the Irish Motor Traders' Association was, however, that the fair trading rules would be likely to contain provisions similar to those which they now find in the Restrictive Trade Practices (Motor Car) Order, and, consequently, the rules would not be accepted by the association.

The Minister said the position appeared to have been reached in which the action just taken by statutory Order would be the same as that which would have been achieved by fair trading rules and that possibly the Motor Traders' Association would have saved itself a good deal of time and trouble if it had agreed to have the rules in the beginning.

They got an offer from the commission and they did not want it. They said that the Fair Trade Commission would probably make the same rules as the Order and they could not agree on that. The trouble about this whole matter is—and I say this more in sorrow than in anger—that the Motor Traders' Association seem to think that this is not a Restrictive Trade Practices Act at all but an Act to regulate profit margins.

The position is that when the Motor Traders' Association went to the Fair Trade Commission to see what function the association would have in relation to the motor trade in the light of the fact that this Order was being made when they got into the presence of the members of the commission it was not rules they wanted at all; they wanted the Fair Trade Commission to fix economic price levels in the industry. The purpose of going back was to discuss what function they could discharge or what fair trade rules might still be necessary outside the scope of the Order. As if they never heard of this commission, as if there were not 91 witnesses, and if they had not read the report, they wanted to discuss the question of economic price levels in the industry. The commission could not discuss that. The commission has to wait until the Order is made. Then the commission is perfectly free to discuss with the Motor Traders' Association what its functions are to be in future, what fair trade rules have to be made and what subsequent rules may have to be made arising out of compliance or non-compliance with the provisions of the Order.

I think, as I said, that Deputy Lemass is unwise in suggesting that they might have gone to the Fair Trade Commission in the first instance. They could not do that, and their spokesman said he wanted to be fair to the commission by setting out the reasons why they would not go there.

Deputy Lemass said—and I hope I have got it correctly—that this Order does not prohibit all price maintenance by individual suppliers. If the Deputy looks at Article 4 of the Order he will see there is a prohibition on collective resale price maintenance.

Mr. Lemass

On collective resale price maintenance?

Mr. Norton

Yes.

Mr. Lemass

There is no such thing as collective resale price maintenance except for petrol.

Mr. Norton

If the Deputy looks at Article 3 of the Order he will see it prohibits individual retail price maintenance by individual suppliers so that the Order covers both collective resale price maintenance and individual resale price maintenance.

Question put and agreed to.

Section 2 agreed to.

Title agreed to.

Bill reported without amendment, received for final consideration and passed.