This Bill is based upon three main principles. The first is that we should continue the policy which has operated since the war of direct purchase and importation of tea from the countries in which it is produced. The second is that we should keep the wholesale trade in tea in the hands of Irish citizens. The third is that, within the limits of these two policy objectives, we should restore free trading in tea.
Many Deputies who spoke about this Bill obviously had not taken the trouble of reading it and I hope that those of them who have expressed views about its contents and then left the House will be told by their colleagues here to have another look at the Bill or at least be informed of the explanation of its provisions which I shall now give. The validity of all these three objectives has been challenged during the course of this debate. There are Deputies who said we should not continue the policy of purchasing tea direct in the country of origin. There are Deputies who said it does not matter if we keep the trade in tea in the hands of Irish citizens, and even Deputies who said it is not desirable to restore free trading in tea. Therefore, all three objectives have to be defended.
First of all, let me take the question of the direct purchase of tea. It seems to me common sense, on the face of it, that it should be cheaper for this country to buy its tea in countries where it is produced and import it direct from those countries than to obtain our tea through the intervention of external middlemen in external markets. There seems to be some idea in the minds of Deputies that external middlemen in this commodity are so tremendously more efficient than we are that they can actually carry out this operation for us, make a profit out of it and still deliver the tea to this country cheaper than we can buy it ourselves. Nobody has attempted to show why that should be the case, but many people have asserted that that is how it would work out.
May I express the view that Irish tea wholesalers are just as good judges and buyers of tea as anyone either in Mincing Lane or anywhere else? Indeed, the tributes which have been paid to Tea Importers Limited for their work over the past ten years prove that to be so. Tea Importers Limited is not a State company as some Deputies have assumed. It is a company which was set up by the wholesale tea traders of this country at my request during the war and which operated in much the same manner as the contemplated new company will operate. The directors were not appointed by me or by the Government, they were chosen by the tea traders. They had no capital, however, and their activities were financed by bank credit guaranteed by the Government.
In so far as they have been able, in difficult times, to buy tea more successfully, in many instances, than the Mincing Lane merchants, they have justified my claims. Deputy Palmer referred to the coal trade and said that because merchants were free to buy coal in America or Poland, there was keen competition in the sale of coal in this country to the benefit of the consumers of coal. Would Deputy Palmer or any other Deputy think it a good idea for a coal merchant in Cork to buy a cargo of coal in America, ship it to Cardiff, unload it there, and then at some later date put it back on a ship and convey it to Cork? Would that appear to be a sensible arrangement? Does he think that if that system were adopted by merchants, it would mean that coal would be cheaper than if it came direct? If that is not a sensible arrangement for coal why assert it to be a sensible arrangement for tea? How can any Deputy conceive it to be less costly to have tea intended for this country imported through London, placed in warehouses there and at some later date transported to merchants over here than imported direct?
Underlying all the arguments that it is unnecessary for us to make arrangements to ensure the direct purchase and importation of tea is that assumption, that by going through that roundabout way tea will reach us at a lower price than it does at the moment. That is a nonsensical suggestion. Deputy Dillon said that the arrangement proposed in the Bill would mean poor tea at high prices but, like everything else that he said, he made no attempt to prove it. Deputies on the opposite side were obviously relying on advice from Deputy Dillon on the techniques of the tea trade and accepted without question his assertion that this arrangement would have that result. It is contrary to common sense that it should have that result.
There was a substantial reduction in the price of tea last year and Deputies are forgetting that. No doubt part of that may have been due to the termination of the temporary arrangements regarding the financing of tea sales operated by the previous Government, but it was not due solely to that. The bulk of the tea supplies of this country for each year have to be purchased over a comparatively short period, in a matter of weeks or months, and when the year's supplies are being purchased it is always a matter of judgment as to whether prices are likely to rise or fall during the succeeding 12 months. On the whole, it is true to say that the judgment of Irish merchants in that regard has proved to be quite as good as that of British merchants, and that this country has benefited, by reason of their good judgment, by lower prices at many periods.
It is true that at the present time there are complaints about the quality of tea on sale. I do not know that these complaints are justified when they are based on the assertion that it is in some way attributable to the operations of Tea Importers Limited the existing company which is now going out of existence. Tea Importers Limited were prepared to buy any tea that merchants wanted. They imported and offered for sale to merchants a wide variety of teas which were of different qualities and characteristics and which were available at different prices. The individual merchant purchased from Tea Importers Limited the teas that he wanted in order to make up the blends which he was going to sell to his customers. He could buy the top grade teas or the cheaper teas. It is probably true that because of the fact that tea is so much dearer now than before the war that merchants are not anxious to push up the prices at which their standard blends sold to their customers, that they tend to buy cheaper grades of tea than those which they purchased before the war and that now they have the excuse that that is due to Tea Importers Limited and not to their own decision or their estimate of their customers' requirements. That excuse will not hold in future, because, as I have pointed out, we are restoring freedom to trade in tea, subject to the policy conditions I have laid down.
It is true to say that the average price of the teas imported into this country in recent years has been lower than the average price imported into London. I agree that that fact by itself means little. It could mean that we were, for some reason, buying lower qualities than those purchased by Britain. I do not think that that is a likely explanation but it could be the explanation. It is the only information available by which we can judge whether Tea Importers Limited have been buying better than the tea merchants of Britain...
It has been said that ld. per lb. on tea costs £100,000. That is true no matter where we buy it. If we buy our tea from London, if we get our tea by this process of entry into and exit from Britain and if, as a result, we increase the price even by 1d. per lb., it will mean £100,000 for somebody. It is not difficult to find out to whom we would be paying it; it would be to the people who own the warehouses, the traders who handle the tea and the workers employed in their warehouses; and we would also have to pay out additional unemployment assistance to the many workers who might lose their employment here and for whom few Deputies on the opposite side have expressed any concern.
Under this new Bill every wholesaler in the country will have the liberty to buy in India, or in any other country where tea is produced, whatever kind of tea he wants, whatever quality he wants and whatever grade he thinks suitable for his trade. There is no question of centralised buying of tea. This Bill brings that practice to an end. The centralised buying of tea is now going to cease. It was an arrangement necessarily instituted in the scarce time of the war and it has been continued ever since. I have been anxious to get rid of it and I started discussions with the tea merchants, to this end, five years ago. Deputy Esmonde wants to give them another year for it. They have considered it for five years and it was the outcome of that protracted discussion which resulted in the formation and registration of this company which they have set up and which they alone will control and operate in the future.
No tea merchant has to become a shareholder in the company. It is open to any tea wholesaler to decide for himself whether or not he wants to become a shareholder in this company. It makes no difference to him as far as treatment by the company is concerned. It may be that there will be some advantages for the larger merchants in participating by their shareholding in the control of the operations of the company, but any tea wholesaler who does not wish to become a shareholder, or the scale of whose operations would not justify that investment in the capital of Tea Importers (1958) Limited, does not have to do so and this company will lend him precisely the same service, if he requires that service, in acting as his agent for the purchase of tea and in financing the purchase of tea as well as arranging for its importation.
Deputies have spoken as if the shareholding requirement was a heavy burden upon traders which only the strongest could undertake. It was mentioned that we import 250,000 chests of tea per year. The total shareholding obligation is equivalent to 100 chests of tea, and any merchant not in a position to finance trade on the scale represented by 100 chests of tea is in business in a very small way. I have no objection to any person getting into this business in a small way. My whole aim in framing this measure, and in the course of consultations with the tea wholesalers' association, when they were forming the company, was to ensure that the smallest trader would be at no disadvantage vis-á-vis the largest in trading in tea in the future.
There is no restriction of any kind on new entrants. There is no monopoly and there is no restrictive trade practice as stated by some Deputy. Everybody can get into the tea trade, whether he has £2,500 to invest in the shares of this company or not. He can become a shareholder if he wants to, or he need not. He can still trade. The only condition stipulated in this Bill is that he must be an Irishman or it must be a company which is financed from Irish sources and, of course, that he carries on the business of purchasing tea by going into the markets of the countries where the tea is produced.
So far as the utilisation of agents in that market is concerned, merchants can, of course, choose whatever agents they like. It is not true that Tea Importers, Limited, have been utilising only agents who were employees of British wholesalers. They have been availing of the services of Indian firms as their agents and many, if not most of their agents have been of Indian nationality, but they did not buy all their tea at the auctions in India. They also bought direct from the gardens, as well as bidding at the auctions, for the supplies they require and they have organised the shipping of that tea direct from Indian ports to this country as suited the requirements of this country.
The control of the shipping of the tea was advantageous to this country. The insurance of the tea on purchase and in transit was negotiated with an Irish company and all the subsidiary business associated with transactions of that kind came to Irish firms, instead of being available only to British firms as was the case previously. The freight payable upon tea from an Indian port to an Irish port is no higher than the freight paid to London and the only consequence of shipping the tea through the London market is that it would have to carry the additional freight from a British to an Irish port, which might in some instances be as high as the freight from India, or if not quite as high, certainly high in proportion to the distance involved.
It seems to me common sense on the face of it that it is to our advantage we should buy the tea where it grows and import it direct. Is there a case for keeping the tea trade in the hands of Irish merchants? It is true that before the war the tea trade was very largely dominated by the British primary wholesalers. There were some firms which bought direct and I tried to encourage that development in prewar years, but the total quantity of tea purchased direct by Irish wholesalers was a very small part of our total supply.
The bulk of the tea came through Mincing Lane. The trade was dominated by the London merchants and I want Deputies to understand exactly the position we were in. Probably this situation never would have changed at all and even the possibility of change would never even have been considered, had it not been for the war. During the war, these merchants went out of our market. I am not desirous of raking up any recollection of unpleasant things which happened, but I think the House should understand what did happen and the part which the British tea wholesalers played on that occasion.
The arrangements we made at the outbreak of the war were made with the British Government. They were arrangements which involved an understanding about the purchase of available supplies of tea and a willingness on our part to step out of the market so that the available supplies of tea in the world could be purchased advantageously by the British on an agreement under which the allocation of supplies for this country would be equivalent per head of the population to the allocation for Britain.
That arrangement was broken. It was broken probably at the instance of some people in the British administration who were hostile to us. They broke it in a manner which was intended to create the maximum confusion in our administrative arrangements and to impose the maximum hardship on our people. There are Deputies here who will recall that we had a special meeting of the Dáil summoned in January of 1941 to consider complaints which were coming from the country about the scarcity of tea.
Before that took place, I sent my officials to the British Ministry concerned to make sure that the agreement which I had made with them was going to be kept. I got that assurance and I subsequently came to Dáil Éireann and said that whatever temporary dislocation may have occurred in relation to tea, the position was unchanged and supplies would come along. The day after the Dáil adjourned, I was informed by the same officials of the British Ministry of Food that they were cutting our allocation to a quarter and that would have to do us.
We should only make a gentleman's agreement with gentlemen. I have no complaints to make about that now. Feelings were running high at the time and there were a number of bureaucrats temporarily in office in Britain at the time who allowed their feelings to affect the administration of their affairs, but behind them were the British tea wholesalers, and if one of them had at any time shown the slightest interest in our difficulties, they could have rectified that situation. Not one of them showed the slightest interest in us, although they had made substantial profits out of the tea trade in this country. Not a single one of them was prepared even to express an opinion which would have helped to relieve our situation.
We have no obligation to let them back into our tea trade. I would be prepared to let them back, if it could be shown that it was substantially to our advantage to do so, but no one has shown me that there is any advantage in it. Deputy Dillon said that these London merchants are prepared to give from £4,000,000 to £6,000,000 free credit in respect of our tea supplies. Does anybody believe these tea wholesalers have any interest in the Irish market except the profit they can get out of it? The idea that they would give us free credit for tea stocks is, of course, nonsensical.
Let us consider the employment aspect. It is an important aspect. I am not talking now about the employment associated with the retention of the country's stocks of tea in the warehouses of the Dublin Port and Docks Board. The handling of those stocks alone gives an amount of employment. I am thinking of the employment given by the individual wholesaling firms who import the tea, blend it and frequently package it for distribution to the merchants throughout the country. Why should we allow all that work to be done for us in London? Surely we can find merchants here just as competent to blend tea as merchants in London? The employment given in the process of blending tea is not inconsiderable. There is a tendency towards more packaging of tea and the employment given in packaging tea is not inconsiderable, either. Why should we forgo the advantage of retaining that employment for our people merely for the sake of opening up our market again to those who showed very little interest in it when a little interest could have been of some value to us?
Deputy Dillon spoke as if, when I was referring to employment, I was thinking of holding in Dublin employment which would be given throughout the country. That is not the situation at all. I was thinking of holding employment in Ireland which, if we do not make some arrangement like this, will be given outside Ireland. The secondary wholesaler—the man who blends tea obtained from the primary wholesaler—will continue to operate in the future as in the past, whether the primary wholesaler from whom he buys works from a store in Dublin or from a store in London.
Let me make it quite clear, however, that when I talk about keeping the trade in tea in Irish control, I am not thinking of keeping it in Government control. No Government control is contemplated. Apart from the maintenance of a register and the condition that shareholders in this company must be registered tea traders, there will be no control at all. The only purpose of the register is to achieve this second aim I was talking about—of keeping trade in tea in the hands of persons who are Irish nationals and whose activities are financed from Irish sources. The process of preventing the reappearance of the brass-plate agents of the British wholesalers in the tea trade of Ireland after the war was a slightly painful one. Some individuals were adversely affected by that policy. But that was seven or eight years ago; it is done now and there is no reason why we should not now fulfil that policy and get all the advantages which it means for this country.
There are very considerable advantages also in arrangements which ensure that Irish stocks of tea are held in Ireland. Stocks have to be held somewhere. I mentioned earlier that the bulk of the tea harvest of India comes on the market in the course of a few weeks in the middle of the year. At that stage somebody has to buy in the tea we will consume in the ensuing 12 months. It has to be stored somewhere. There are advantages, other than the employment advantage, in stocking it here.
The Dublin Port and Docks Board built a great big new warehouse to hold these stocks of tea. It is a very important additional facility at the Port of Dublin. One does not know what circumstances may arise in the world which may interrupt the flow of tea to this country. One does not know whether there is any danger of prolonged trade disputes or other circumstances affecting the transportation of tea from abroad and leaving us with a deficiency of supplies. It is clearly a wise insurance policy for our people to have these stocks of tea when purchased held here so that we can count upon their availability irrespective of the possibility of international disturbances.
I am trying to get the Dáil to understand that what this Bill does is to restore free trade in tea subject only to the two conditions that the trading is done by Irishmen and Irish companies and that these Irishmen and Irish companies buy tea in the country where it is produced. The Government is getting out of it completely. The extent to which the Government was in the business may be questioned. As I explained already, while the existing company was set up at the request of the Government, it was set up by the tea trade which appointed its directors and arranged for its financing.
In so far as that arrangement involved one buyer of tea, even though that buyer bought all the varieties of tea that individual tea traders wanted, that situation is now coming to an end. In future, any tea trader can buy the teas he wants in the country of origin. He is free to do so and this Bill emphasises the fact. He does not have to be a shareholder in the company. So long as he is a registered tea trader, he can do that. Tea Importers (1958), Limited, can import for him. In the case of merchants who require that facility, Tea Importers will act as agents and, in cases, will arrange to finance purchases for merchants if they need help of that kind.
I was very disappointed to hear a member of my own Party, Deputy Booth, speak with such ignorance of the Bill. I thought at least that Deputies on this side would have taken the precaution of seeing what the Bill was about and have the common sense not to talk about it until they had done so. The Bill imposes no restriction of entry into the trade. Any person can become a tea trader in the future provided he is an Irish national or forms a company which is financed from Irish resources. There will be no centralised buying of tea. A person who is registered will be able to buy tea subject only to the condition that he buys it in the country of origin. There will be no monopoly of import in the sense that there will be only one buyer.
Personally, I cannot understand why in these circumstances we need anticipate any deterioration in the quality of the tea available. On the contrary, I should expect that the effect of the new freedom given to tea traders in respect of purchasing in the country of origin should tend to improve the quality of tea available in so far as individual traders will be able to exercise, perhaps, a wider discretion in the selection of the qualities and varieties of tea they desire to put into their blends. I saw many times the list of teas that Tea Importers were offering for sale. It seemed to me to be a very long list, certainly long enough to give any tea blender a very wide choice of teas to put into his blends. No doubt, however, there will be a still wider choice available to merchants when they can go directly to the countries where the tea is produced, buy it at the auctions as it is offered, when it is of the quality and at the price they desire, and can go down to the individual producer if necessary and negotiate with him for the purchase of his crop as it stands.
Deputy Dr. Browne suggested we should keep the existing arrangement. I have been trying to point out that the existing arrangement does not represent in any way State trading in tea. Tea Importers Limited is not a State body and it never has been. It never had any powers given to it by the State except that it was solely licensed to import tea during the period of its operations and had the assistance of a State guarantee for getting the finances it required from its bankers.
The fact is that the law under which it has been operating—the law under which it got the exclusive licence—is due to expire on the 31st March next. Clearly we have to take some decision before then as to what the future arrangement will be. I am quite satisfied that the new system will be a better system. The members of the tea trade, whether they are shareholders of the company or not, will be able to widen the varieties of tea which they can purchase and consequently improve the quality and flavour of their blends in that way.
It is a bit foolish to talk about this new company as a profit-making company. It is true that it may have a capital of £250,000. That capital will not be sufficient to finance its tea purchases completely. It is true the company will have to get money from somewhere, but I think the cost of utilising its own capital when reflected in the charges which it makes for its own services, and when allowance is made for the taxation to be paid on any profit earned, will be no greater than the charges they have now to meet on the money obtained on loan. In order to ensure that there is no inducement on the part of the company to so conduct its operations that it will earn an undue profit, arrangements have been made for the limitation of its dividend payments.
Personally I do not believe, and I would like Deputies to understand this, in State trading in a commodity of this kind. I do not see any analogy between Tea Importers Limited, in their operations in the purchasing of tea, the Sugar Company, Bord na Móna or any similar organisation. This is a trading concern purely and never can be anything else. There can never be a question of it doing manufacturing or anything of that sort. The merchants will do all the processes of blending, packaging and selling.
There has been some suggestion that there should be a three months' period during which no control upon tea would operate, just for an experiment. It could be a disastrous experiment. It is true that we cannot hope to have this new company functioning before the end of June and that the old company's legal foundations will cease to exist from the 31st March. I am bringing in a Bill, which will be introduced to-morrow, to continue the old Act in operation for another three months. I think it is essential to do so. Failure to make provision now for the purchase of the tea which this country will require during the 12 months. from June next could produce chaos. Arrangements must be made for the purchase of the tea when it comes on the market from June onwards. I think it would be an unjustifiable risk to let that period of three months go without ensuring that ample tea supplies will be available and that whatever tea we need will be purchased.
I contemplate, and always did contemplate, that the transitional period would be one which would involve some difficulty and, perhaps, some risk as well. Tea Importers Limited, no matter what time they cease operations, will have some stocks on hands which will have to be taken over by the new organisation. Normally they would have two or three months' stock on hands to meet the requirements of their customers even at the end of the season, and arrangements must be made to make the advent of the new company coincide with the disappearance of the old, so that these stocks can be transferred smoothly and the liabilities attaching to them. It is, therefore, very necessary that the old Act that was passed by the former Government in 1956, and which was expressed to last for two years, should remain in operation until the new Act comes into force. In that way we will not merely solve all the problems arising out of the termination of the old company but we will make sure that there will be no hiatus in the arrangements for the purchasing of tea.
If we had to face the difficulties, which would certainly arise if this three months' experimental period were adopted, there would be a risk of a deficit in supplies and we might have to arrange to get the supplies we need during the next 12 months at a higher price than Tea Importers Limited can acquire them in the early future. It seems to me, therefore, that a large part of the objection to this Bill has been based on some misunderstanding of its provisions and some illusions as to where the interests of this country lie.
I have no doubt whatever, and anybody who has given any thought to this matter can have no doubt whatever, that it must be to the advantage of the Irish tea consumer to buy tea from the countries of origin without the intervention of any external middlemen. The situation has now been created where the trade in tea is in the hands of Irish wholesalers and I see no reason why we should not institute arrangements under which it will so continue. It will mean retaining not unsubstantial employment for Irish workers. We have not, at the moment, so much employment that we can afford to jeopardise or throw away any that we have.
The only object of this Bill, apart from preserving those fundamental two requirements, is to leave the tea trade free from Government control and allow anybody who wants to enter it to do so and to buy tea from the country of origin. It will introduce a wider field of competition in the tea trade which will be of benefit to tea consumers. Some Deputies seem to think that something to the contrary was intended, but, if they examine the Bill carefully, they will know this was what is intended. This Bill is designed to remove Government control entirely from the trade in tea and to introduce free trading in tea for the Irish wholesale merchants.
