Dáil Éireann debate -
Thursday, 6 Mar 1958

Vol. 165 No. 8

Tea (Purchase and Importation) Bill, 1957—Committee Stage (Resumed).

Question again proposed: "That Section 7, as amended, stand part of the Bill."

Mr. T. Lynch

As I was saying, the Minister has been out against restrictive practices in various trades and businesses in this country. He could be accused of being guilty of restrictive practices himself by the introduction of this Bill because he restricts the buying and the importation of tea to ten people. What I am more concerned with and what I was elaborating upon up to Question Time was the fact that the Minister initiated an export drive yesterday and he exhorted everybody to try to increase exports. I am sure that he must have had the increase of exports to Great Britain in mind.

Perhaps Deputies did not read the papers and might not know what was going on. There was a campaign in England against this country's products, our butter and bacon, by New Zealand only recently. We should preserve as much goodwill as we can with our customers. That is a normal feature of business and, therefore, I put it to the Minister that it is not good business to bring in a Bill that actually prevents anybody from buying tea in Mincing Lane, meaning Great Britain. That could be used against us by people not friendly to this country.

I do not consider it right that any group of men should control the buying of anything in times like the present. It is right during an emergency or a war, when it is better to have the commodity controlled, but in times where there should be free trade and free sale of tea, I am convinced that if the people in the Irish tea trade were allowed to buy tea where they would, and at what prices they would, the ordinary people of the country— those we should be most concerned for —would be able to get much cheaper tea.

Mr. S. Lemass

I think I would have had more expedition in the passage of this Bill through Committee if I had circulated a White Paper with it to explain its provisions because much of the debate is clearly based on a misunderstanding of the measure. All the points that have been raised concerning the intention of the Bill and its modus operandi have already been covered in earlier discussions and I do not know that it is necessary to go over them again, but in the course of the debate on this section, some points were raised to which I want to refer.

Deputy Norton argued in favour of continuing the system of bulk purchasing of our tea requirements, the continuation of something like the present arrangements for acquiring the tea supplies of the country. Deputy Sweetman argued that bulk purchasing has the effect of putting up the price against us. Deputy Norton, I think, would argue the reverse, that a person buying tea in large quantities could buy to advantage. I do not know if it is possible to prove the truth of either contention; personally, I find it hard to believe that the purchase through a single agent or a number of agents of the 24,000,000 lb. or the 28,000,000 lb. of tea that we require every year could influence the price of tea in the Indian auctions one way or another. Deputy Booth made the point that bulk purchasing also involves less selective purchasing than would take place if there were a number of buyers, each having regard to the particular requirements of his own trade.

I think that is true. Tea Importers, Limited, when buying the tea requirements of this country, bought a number of varieties of tea and generally tried to supply the merchants of this country with the varieties they were most likely to need; but no doubt there were many varieties they did not purchase, or perhaps did not purchase in the quantities it eventually turned out the merchants would like to have had. None of us can pretend to be experts in regard to the qualities of the different varieties of tea.

I want to be clear that one of the purposes of this Bill is to abolish bulk purchasing and create a situation where every individual merchant will buy his own tea, whatever varieties or qualities he wants. When this Bill is in full operation—and that will not be I suppose, until 1959 or 1960—bulk purchasing will cease. Tea Importers (1958), Limited, will not be buying tea; the tea will be purchased by anybody who wants to buy tea and who is a registered merchant, and he will buy whatever tea he wants and whatever quantity he wants. I do not think it will make any appreciable difference to the prices of tea in the Indian markets, but I think it will mean there will be more selective buying of tea to meet the requirements of the individual traders.

Somebody asked me to prove that tea will be purchased cheaper for the Irish market by going direct to the countries of origin for it than by going to markets in Britain or elsewhere. I do not know how that proof can be given; I can point to the Trade and Shipping Statistics, which show that over a number of years the average cost per lb. of tea imported into this country was slightly less than the average cost of tea imported into Britain, but that does not prove anything.

Mr. Sweetman

That depends on the quality.

Mr. S. Lemass

It depends entirely on the quality of the tea purchased. In 1956, my predecessor, at a time when Tea Importers, Limited, were suffering some credit restriction, authorised them to make purchases in London, and they said that the tea they purchased in London could have been purchased by them more cheaply in India.

Arising out of Deputy Lynch's remarks, Deputies may have seen in the newspapers that we are exporting tea, tea blended and packed in this country. There is a rather important export trade in tea of that character, and I presume that trade would not be possible, unless tea was available here on terms competitive with those prevailing in other countries. It seems obvious to me, on the face of it, that having purchased tea in India, the cheapest way of getting it to this country is to fill up a boat with it and sail it direct from Calcutta to Dublin, or from some other Indian port to some other Irish port. I cannot see how any Deputy can believe that it could be cheaper to bring tea in via some intermediate port or via some transshipment arrangement at a British port, as happened before the war.

Mr. Sweetman

Is it not obvious that the freight charge must depend on the round trip utility of the vessel?

Mr. S. Lemass

Yes. My point is that the cheapest method would be to bring a full cargo in one ship direct from one port to another. If the ship has part of its cargo for another port or if the tea has to be trans-shipped at another port and has then to come on here, it will clearly cost more.

The next point I want to make is that there appears to be a complete misapprehension as to the probable effect of not having this arrangement. One of the effects of the arrangement, as I have emphasised, is that every tea wholesaler bringing in tea, whether it be 100 lb., 1,000 or 10,000 lb., will have the same freight rates to pay. If we do not have this arrangement, it is almost certain that the trade would be completely in the hands of a very few wealthy firms in a large way of business.

Deputies have been speaking here as if the trade in tea in future will be confined to Irish-owned firms. That is not correct. Every existing tea wholesaler will be entitled as of right, without question or condition, to get on to the register in future and that will include some of the very powerful and wealthy multiple chain store organisations and one can conceive certain circumstances under which they could, because of their international ramifications and large financial resources, trade on much better terms and arrange for shipping on much better terms than could a newcomer to the trade or a small Irish trader requiring supplies on a much smaller scale. It seems to me almost inevitable that if we were to do what is being suggested here, to make the condition of purchase in the country of origin and to confine trade to registered traders, and to leave all other restrictions aside, the effect would be to squeeze out the traders who are in a smaller way of business and to give superlative advantages to the large external firms.

It is also necessary to keep in mind what I have said before that for nearly 20 years we have had a system of bulk buying, with one centralised organisation buying all the tea and no individual merchant having contact with the countries of origin at all. It is inevitable that many of them will be handicapped for the time being by lack of knowledge of the procedures for arranging for purchases and shipping and hesitant about undertaking the financial arrangements involved. Again, that situation requires, in the interests of these tea traders themselves, the establishment of an organisation like this and the institution of an arrangement by which that organisation will act as their agents in the shipping to this country of the tea they buy from the countries of origin.

Deputy Esmonde has repeatedly spoken on the basis that I am setting up a company to do something. I wish again to emphasise that I am not setting up any company. The company to which this Bill refers is being set up by the tea merchants of this country themselves.

Mr. Sweetman

At your instigation.

Mr. S. Lemass

Not at my instigation. I discussed with the merchants the arrangements that would be most likely to facilitate the realisation of the aim of restoring freedom to trade in tea to everybody and at the same time to preserve the aims of policy with regard to purchase in countries of origin. Out of that discussion arose this suggestion that they should set up a company which would act as an agent for all of them in the shipment of the teas they purchased. It will be their company, controlled by them, directed by them and there will be no State interference at all with the operations of that company.

Deputy Cosgrave has more than once asked why if this organisation is good for tea, is it not good for other commodities. I think it is good for other commodities. I cannot see any reason why we should buy our supplies of other commodities that have to be imported through the medium of middlemen in third countries. Are we going to do anything about it? That is a different question. Here, because of the special character of the tea trade and the special obligation there was on the Government to try to maintain tea supplies during the war, we have the situation in which there is a bulk buyer of tea and in which the Government is involved, financially and otherwise, in the conduct of the tea trade and, as we are getting out of it, giving the trade back to merchants to operate freely in competition with one another, there is an obligation on us to see that the system which will in future operate with regard to tea is one which conforms to our conception of what is most likely to be in the interests of the consuming public in this country. That is what we are doing. But, if I were again asked the question as to why an arrangement that is considered desirable in the case of tea does not apply to rice, coffee or anything else, I say, of course, it should apply to them. I would prefer to see an arrangement under which traders in those commodities purchased direct in the countries of origin and shipped direct from those countries rather than that they should pay a commission to middlemen in other countries to do business for us.

I resent the mentality which appears to think that this country must always necessarily be a sort of tail-end of the British distribution system. That was something which was perhaps inevitable when we were one political unit, but it surely is a situation which was bound to disappear in the course of time. Purely commercial considerations would bring it to an end. There is certainly no reason why we should think of deliberately going out to preserve it when it is not to our advantage.

Let me say in connection with what Deputy Sweetman said in regard to my personal feeling in regard to this matter, if he can show me that there is one advantage of any sort to the people of this country in getting back to the pre-war situation in which the primary wholesalers of Mincing Lane handled the tea trade of this country, I am prepared to let it happen but I have to be shown that there is any advantage in it. There is no reason why we should do it merely because it was the pre-war practice and certainly there is no reason why we should do it when our investigation of the situation seems to show beyond doubt that the advantage to the country lies in pursuing the course that this Bill indicates.

Mr. Dillon

May I put this point to the Minister? His thesis now on this section is that the device envisaged by this Bill will redound to the advantage of the consumer in Ireland and he defends it on that ground. Very well, I say, strike out sub-section (2) and let the two systems work side by side.

Mr. S. Lemass

They would not work side by side.

Mr. Dillon

Why not? All I want to ensure is that the person who actually purchases and blends tea for sale to the consumer in this country shall have the widest option to get the best value he can for his customers' money. If the Minister's thesis be true, that the distributor can get better tea cheaper as a result of the bulk purchase arrangements catered for in his Bill, how can he argue that a distributor seeking the best value will elect to purchase in Mincing Lane poorer tea for more money than he could buy in the City of Dublin? That is just crazy.

I have no objection at all if the Minister wants to set up machinery to enable a group of tea importers in this country to deal direct with India. All I am concerned with is that he will not compel me to deal with them but that he will leave me or any other merchant in the country free to deal where we can deal to the best advantage.

The Minister speaks of this country as being the tail-end of the British distribution system. I do not believe a Minister for Industry and Commerce in this country can seriously make that contention. Does he regard the Metal Exchange, does he regard the Baltic, does he regard the numerous international markets that function in Great Britain as a great international banking centre as being tail-ends of the British distribution system or are they not great international markets?

It is well for Deputies to hear this story before they make up their minds. A question of purchasing jute arose in time of scarcity and I remember asking the head of a big jute firm in London could jute best be purchased in London or in India. His reply was: "It does not matter very much. If you want to buy jute in London, we can sell it to you or, if you go to any of the 15 firms represented around this square, they can sell it to you or, if you go to Calcutta, we will meet you there and will sell it to you there, or, if you want to go up country to where they grow jute, we will make you very welcome there, but you will still be buying through us."

It is quite illusory to imagine that any group of merchants here will take an aeroplane and go out to Calcutta. Any group of importers here must deal with an agent in the Calcutta market. I should say that over 80 per cent. of the agents trading in the Calcutta market are themselves agents for British firms. I do not want to denigrate that procedure. I do not care if a group of merchants here want to combine and take up their residence in Calcutta. I do not mind if they want an Irish speaker to act as their agent in Calcutta—or an Englishman or a Parsee, and so on. It is eminently desirable that enterprising business persons in this country should be facilitated in adopting any machinery they like, provided they do not say to all the other enterprising businessmen in Ireland: "You may not trade the way you think best." That is all.

What I cannot understand is how the Minister can go on making the case that it is expedient to prohibit the vast majority of experienced tea buyers in this country from buying tea the way they think they ought to do it.

Mr. S. Lemass

The Deputy has tried to make the case that if there are all these advantages in buying tea in the country of origin, we do not need controls—that that is how the tea will be purchased, anyhow. Does he seriously contend that organisations such as Lyons, Liptons, the Home and Colonial, would be allowed by their parent organisations to buy anywhere except in Mincing Lane through the central organisation of these giant concerns? Does the Deputy contend that they would be allowed to conform to what we think is best for the Irish people—and remember that these organisations buy a large part of the tea for this country? Does the Deputy visualise Irish merchants, knowing that the way was open to powerful Mincing Lane merchants to get back on the Irish market and not knowing what moves they might adopt to establish themselves here, risking substantial sums on the purchase of tea in such a situation? It would not happen and the Deputy knows it. Deputy Dillon knows that if there were not the provisions which are in the Bill the whole idea of developing trade with the country of origin and getting the advantages which that means could not be achieved.

Mr. Dillon

My contention is that, in my judgment, if the two systems are allowed to function side by side one system will prove itself infinitely superior and the other will wither away. I understood the Minister for Industry and Commerce to say that the advantages of the system envisaged in this Bill were so great that he could not understand how any sane man would not wish to adopt them. Accordingly, it is my judgment against his. Let the two systems function together. I believe that, from the point of view of the consumer here, the great advantage lies with Mincing Lane—and it is of the consumer I am thinking. Bear in mind that 1d. on 1 lb. of tea represents £100,000 a year. Therefore, if the consumer in this country is getting tea of a quality 4d. a lb. below what he ought to be getting, it represents very nearly £500,000 a year.

Mr. McMenamin

Plus commission.

Mr. S. Lemass

Why should he pay the £400,000 to the Mincing Lane merchants?

Mr. Dillon

If we can get tea cheaper and better under the machinery of this Bill, why should anyone go to Mincing Lane? Do you really imagine that Liptons, Lyons, the Home and Colonial, in order to please the people of Mincing Lane, will enter into competition with merchants in Ireland who, under the machinery of this Bill, have the forehand advantage of them in regard to price and quality? If this machinery will work cheaper for Lyons, Liptons, Home and Colonial, and so on, surely they will use it? The reason they will go back to deal through London is that they know as well as I know that, in purchasing on an international market, such as for teas, it is much more advantageous to use the international machinery of trade.

Under my proposal, both schemes can be put into operation, one with the other. If the Minister's proposals are the better, they will ultimately prevail.

Mr. S. Lemass

Give them about ten years' start. Otherwise, they will never start.

Mr. Dillon

Tea Importers have been 20 years importing bulk tea.

Mr. S. Lemass

This is another scheme.

Mr. Dillon

Yes, but it is closely analogous to the other, because bulk purchase is the key to the business. The Minister has no personal knowledge of the tea trade, which is very complex. I do not hold myself out for a moment as an expert in tea, but I have been 30 years, only in a very small and trifling way, a buyer, a retailer, wholesaler and distributor of tea to suit my customers' choice and desire. I depended for my livelihood on being able to offer what my customers thought was better and cheaper than what my neighbour had to offer, and I know what persuaded them to deal with me.

I tell the House deliberately—I assign no blame—that I believe it was a difficult period of scarcity and that we had to accept the fact that, over the past 12 years when the war was over and scarcity and market difficulties made it expedient to continue centralised buying, our people have been buying worse tea at dearer prices than they should have been asked to do. I do not believe it was anybody's fault. I believe it was a defect inherent in the attempt to buy our requirements of tea and ship them direct from India and Ceylon to this country.

It leaves us open, however, to the kind of treatment by the Bengal State Government to which the Minister referred in answer to a question which I put down last week. The Central Government of India—I imagine for its own reasons—would consider it wise not to discriminate between one country and another. However, in certain fiscal matters the State Government of Pakistan and India have certain autonomy. The Bengal Government announced that they would levy about two and a half rupees per lb. on all teas exported from East Bengal to any country other than Great Britain.

Mr. S. Lemass

That is not it at all. I gave the Deputy a reply to the parliamentary question, and that was not the situation. They charged a levy on all tea produced in the State but exempted tea sent forward to auctions in any part of the world—which is contrary to the policy of the Central Government which is to encourage the sale of all teas at auctions in India.

Mr. Dillon

If we are discriminated against now in respect of that levy made by the Bengal Government, whereas teas handled on the London market are not so discriminated against, that is merely one of the instances of the implications of central buying. I do not want unduly to elaborate this problem or to bring in a vast number of highly speculative considerations. I am prepared to stand on this issue. Let this scheme function and leave the ordinary shopkeeper to buy his tea where he can get the best value. I believe that the vast majority of the Deputies agree with me. I would regard Deputy Haughey, who now shakes his head at me, as a singularly valiant man if he agreed with me in these circumstances but I believe that the average country Deputy who knows how things work in rural Ireland agrees with me.

May I again advert to the fact that every ld. means £100,000 a year? The Minister truly says that, theoretically, under the machinery of this Bill, any wholesaler can participate in the importation of tea—and that is true, theoretically. But hundreds of things are true in theory that bear no relation whatever to the pragmatic fact. I am prepared to say that, when this Bill is operating, not more than 20 Irish wholesalers will participate directly in the importation of tea because the others are not circumstanced to do so. Their turnover is not sufficient to admit of their trading in that way. I say that we are about to put into the hands of fewer than 20 individuals, three or four of whom may be very powerful London combines such as Lyons, Liptons, Home and Colonial, and so on, the exclusive right to import tea into this country. Is that not so?

Mr. S. Lemass

It is the reverse of what is going to happen.

Mr. Dillon

I admit that in theory that could be so. I am saying that, in fact, about 20 firms will control this business. Three or four of them will be powerful London firms like Liptons and Home and Colonial.

Do Deputies advert to the fact that these 20—be they firms or individual citizens—have it in their power, for every ld., to levy £100,000 on the consuming public of this country and divide it up amongst themselves? I think the Minister takes pride in the fact that once this Bill is passed he washes his hands and from that moment forward—unlike Tea Importers, which he had a duty to supervise continually—this new organisation is to be utterly free and allowed to function without further supervision or interference of any kind.

I think the whole thing is utterly daft and I cannot understand any sound or just reason for refusing our simple request to delete sub-section (2) and let the two systems stand side by side. The direct importers would have all the advantages accruing to them from the quasi-monopolistic position this Bill will confer upon them and, if the Minister is right in his forecast, all the additional advantages that he has envisaged from the direct shipping, and so on, against the small individual grocer up and down the country, seeking the best value he can get for his customer. If the Minister's beliefs are well founded, every small grocer and every small wholesaler will ultimately look to the direct importers in the City of Dublin for their supplies; but my experience tells me that, if the interest of the consumer is to prevail, in fact it is free trade that will capture all this business and this abracadabra will break down.

The London tea market is a large one. It gave us, pre-war, four months' credit, or £4,000,000 to £6,000,000, continuously. But they are a representative body of London merchants. Let us not forget that these markets, to which we wish to have access on terms of fair equality with all others who seek access to them, depend very largely on the goodwill of the mercantile community of England. I need not tell the Minister that the difference between Mincing Lane and Smithfield and the various other markets where we trade in England, is not very wide and the contacts are pretty close. If by legislation of this House we prohibit these merchants from having access to our markets——

Mr. S. Lemass

They are not in the market now.

Mr. Dillon

They were put out of it by us.

Mr. S. Lemass

They withdrew from it.

Mr. Norton

How does the Deputy reconcile what he says now with his jute story—that you meet the man in Mincing Lane but you also meet him in India? How can they complain, so? What is the basis of complaint?

Mr. Dillon

I think they object to being excluded from the Irish market. Does the Deputy want to know how the tea market works? I gave the House an outline on that when I intervened in the debate on the Second Stage. I do not want to go over it again. Besides, the Deputy and I have often discussed this on other occasions.

There were misunderstandings during the war. I do not believe it was the fault of the British merchants, but the fault of the British Ministry of Food, if fault there were. When you come to think of it, when the British made available to us a quarter of our annual average purchases, in the circumstances in which they found themselves in 1941, I do not think they treated us badly. It was fair enough, when you consider the difficulties under which they laboured at that time. The Minister apparently bitterly resents it, but I am sure that it was not the tea merchants' fault. They carried out the instructions of their own Government—which I do not think were unreasonable but which, whether reasonable or unreasonable, cannot be laid to the individual charge of the tea merchants in London.

It is a dangerous principle we are adopting here, by legislation to exclude the important commercial community in London from access to our markets, particularly at a time when it is vitally important for us to persuade the British Board of Trade that it should not be persuaded by any other person to levy discriminatory tariffs against our butter. Remember, we are going to make the case that we have been traditionally trading with them for butter. What are we going to say if the British Board of Trade replies to us: "It is true that you were sending us butter before New Zealand was discovered by Captain Cook, but we were sending you tea since shortly after Christopher Columbus arrived on the American continent; and if you think it is appropriate to set yourselves to exclude us from the Irish tea market, can you complain if we do not exclude you but if we put you in a less preferred category in regard to butter? I think this is dangerous and that there is no corresponding advantage to be got out of it. It is a system that cannot stand, as far as I know, if the Free Trade Area is formulated on anything like the present proposals which are being made by O.E.E.C. in Paris.

Why do we take this risk? Why do we embark on this departure, when every counsel of prudence seems to argue against it? I am as certain as I am standing here that, if the Minister believes that the end result will be to get our people better tea at a lower price, he is completely misled. I am as certain as I am standing here that, quite apart from all the other objections I have advanced to this proposal, there is the overriding interest that it means that our people will get worse tea at a higher price. It is admittedly pure speculation on my part, but for whatever my experience is worth, I want to tell this House that, in my judgment, the consumers of this country will pay either in cash or quality approximately £400,000 per annum more for their tea under this restrictive system than they would pay if sub-section (2) of Section 7 were deleted and every man were allowed to buy where he thought best, bearing his customers' requirements in mind.

Mr. S. Lemass

It is far more likely to be better tea at a lower price.

Mr. Dillon

Now, let the House judge between us; but may I beg of the Minister that, while in Paris on his present mission, he turn over in his mind the other considerations I have made? I think they are vitally important to us at present. The Minister knows that from this side of the House he can expect the most energetic support in pressing the view that we are entitled to expect access to the British market, in our traditional forms of trade, on the most favourable terms and our most energetic support from this side of the House for the case that one of the grounds on which we claim that is not only the contents of any trade agreement but the fact that we are one of Great Britain's best customers in Europe, that we are not seeking one-sided favours but seeking to maintain and develop a mutually advantageous relationship. May I submit to the Minister that the proposals in this Bill have no part in the overall mutual arrangement that he and we desire to promote between ourselves and the British market.

Mr. S. Lemass

If that case is going to be made on behalf of any interests from Britain, for Heaven's sake, let them make it for themselves.

Mr. Dillon

No. Surely we should make it here, examine it here and if there is force in it, we should prepare ourselves, but the one thing we should not do is to make it a matter of face. If we commit ourselves to that system and we are met with representations from the Board of Trade that they regard that as unfair discrimination against them which entitles them to take action against us, there would instantly be joined between us all kinds of irrelevant considerations and it would become a matter of national honour that we should stand forth on the terms of the Bill. In the name of common prudence, is there any side of the House that wants to raise issues of that kind on this Bill, when all that this Bill provides can be made available simply by the deletion of sub-section (2) and let the two systems march side by side.

Observe what the Minister for Industry and Commerce says now: if any interests in England want to make that case, let them make it themselves. If they do make it, the Minister will be coming back in defence of the national honour of this country, all for a daft, crazy Bill like this, the result of which will be to cost our people £400,000 a year more for their tea and, in addition to that, we are in danger of becoming embattled on the highest level with interests which it is our vital interest to conciliate in every way we can.

Mr. Norton

May I ask one question of the Minister? Is it not true that a majority of the Irish tea merchants agreed to this idea of buying tea in India?

Mr. Dillon

Not at all.

Mr. S. Lemass

Yes. The whole proposition was canvassed and voted on by all the wholesale tea merchants in Ireland.

Mr. Dillon

Ninety individuals.

Mr. S. Lemass

After a long and protracted discussion on the merits and demerits of other schemes, what is in this Bill is what the majority of the merchants voted for.

Mr. Dillon

How many voted?

Mr. S. Lemass

Every single one of them, I believe.

Mr. Sweetman

They were told to vote, with this one overriding principle, that no matter what happened, the Minister for Industry and Commerce required the tea to be purchased in the country of origin alone and they were not given any discretion on that.

Mr. S. Lemass

The Deputy is chancing his arm.

Mr. Sweetman

The Deputy is not chancing his arm. The Deputy knows very well what took place. They were not given that discretion in relation to this. They were told that, on that, there was a fixed unalterable policy of the Government and that whatever scheme was to be worked out was to be worked out subject to that provision.

Mr. S. Lemass

Is it not sound common sense that Irish merchants would prefer to be handling the tea of the country of origin rather than handing it over to somebody else?

Mr. Norton

There were a number of "nays." What did the "nays" vote for?

Mr. Sweetman

There were two questions involved. One was that, as I have said, they were not to put forward any scheme that did not include the provision that they must buy in the country of origin. The question on which they had some discretion was whether there would be a company method like this, or an individual method of buying, subject again to the overriding direction that was given by the Minister for Industry and Commerce.

I know that is the fact and the trade knows it, but I want to take the Minister up on two other questions he mentioned earlier. Earlier to-day, he was waxing very eloquent on the line that under this Bill the various parties who were permitted to import tea were free to buy as they wanted. It is common ground that under this Bill existing wholesalers, as of right, are entitled to import through the agency of the company. It is common ground that certain of the big London wholesalers like the one he mentioned, for example, are existing wholesalers here, and would, therefore, be able to purchase under this Bill, if the arguments that were put forward by the Minister this morning are accurate. How then can he possibly justify the statement he made on the last occasion he spoke that if it was not for this, they would be free to come in and buy, with all their resources? If they were free in his argument this morning, they are still free in his argument this afternoon, and the Minister cannot have it both ways.

The second point I want to make is in relation to shipping freight costs. The vital element is not whether you have a whole ship, a half ship or a quarter ship. The vital element in relation to any freight cost is whether you have freight both ways for the round trip. It is perfectly obvious that freight costs must depend on the full user of the ship going both ways and it is nonsense to say that they depend solely on the amount of space you take in the particular ship for one part of the journey only.

Mr. S. Lemass

The Deputy must not think there is any obligation to use only the vessels of Irish Shipping Limited.

Mr. Sweetman

I do not mean that at all. It is the round trip that fixes freight costs.

Mr. Dillon

I should like to ask the Minister a question. Suppose the Minister sets up this exclusive company and in four years' time, we seek to repeal this Act, will this company claim to have no assets or will it claim to be worth a million of money? Will it be argued that it does not make any difference or, on the other hand, that we are seeking by law to take away from this company a very valuable business that they have built up?

Mr. S. Lemass

They will not ordinarily be buying tea at all or trading in tea.

Mr. Dillon

We have argued it out to the limit of our capacity, but I want to register a most emphatic protest against the suggestion that all the tea merchants of Ireland were canvassed in regard to this matter. I assure the Minister that if he believes that, he will believe anything. I do not know if the Minister is in a position to say how many voted?

Mr. S. Lemass

There are 90 registered tea merchants.

Mr. Dillon

There are 90 registered tea merchants according to the Minister's estimate.

Mr. S. Lemass

There are 90 registered under the existing Act.

Mr. Dillon

There are in Ballaghaderreen 19 tea merchants.

Mr. S. Lemass

I am talking about wholesalers.

Mr. Dillon

I am talking about people who sell tea.

Mr. S. Lemass

That is the retailer.

Mr. Dillon

He is the man who buys the tea and sells it. Would the House not have imagined from what the Minister told us that all the tea merchants in Ireland were consulted about this? In fact, 90 tea merchants were consulted and this bait was held-out to them:—"Get in on the ground floor and those of you who are able to get in on the ground floor are guaranteed in perpetuity a monopoly of the entire tea imports of 24,000,000 lb." Let us assume that all of these 90 tea merchants will come in—I am certain that not more than 20 of them will come in because they will not have the resources or the outlet for tea to justify it—and they are going to have a complete monopoly.

Mr. S. Lemass

Nobody is going to have a complete monopoly.

Mr. Dillon

Because there is nobody else from whom they can buy.

Mr. S. Lemass

Anybody who wants to may become a tea importer.

Mr. Dillon

I know that. Theoretically I can become an aeronaut and fly a jet plane to Timbuctoo and there is nothing to prevent me.

Mr. Corry

I hope the Deputy will not crash.

Mr. Dillon

But I am not fit to do it. What is the use of telling me I am free to become a jet aircraft pilot? You can tell people that they are free to do anything they like——

Mr. Norton

Why is it not possible to be a buyer in the country of origin?

Mr. Dillon

Because I have not got the outlet for tea. An ordinary retail distributor in perfecting the blend of tea that his customers want may use seven separate teas. He may use tea from Ceylon, Darjeeling, Southern India or he may even add China tea. He buys all those teas in relatively small parcels on the open market but he is never in a position to buy from Calcutta and import directly to Ireland the variety of teas which he uses to prepare the blend for his customers which in their judgment they consider the best for the lowest price.

Goodness knows, Deputy Norton should be aware that if a very limited number of people manage to get effective control of a trade the tendency for a ring to form, even though it be of an informal character, is almost irresistible.

Mr. Norton

Is that not the position in many other cases? Take a merchant who wanted to buy dried fruit in Greece. He cannot go to Greece and buy direct. He has to buy from a wholesaler in Dublin.

Mr. Dillon

Not at all, in Dublin, in London or in Liverpool.

Mr. Norton

But he cannot go to the country of origin. He is limited.

Mr. Dillon

He is not limited.

Mr. Corry

On a point of order, would you, Sir, insist on those Deputies addressing the Chair?

Mr. Dillon

Any Irish shopkeeper, according to the Minister, may buy a chest of tea from 15 different areas of the Far East.

Mr. Norton

Over 90 per cent. of the tea comes from India.

Mr. Dillon

Different parts of India. These 90 fellows can buy but a shopkeeper distributor is going to find himself dealing with these people and nobody else.

Mr. Norton

Why denigrate the Irish wholesaler?

Mr. Dillon

I am not denigrating him. On the contrary, I say let him compete in free open competition. I say to the Minister, certainly have the Bill but take out sub-section (2).

Mr. Norton

The Deputy is unfairly judging the Irish wholesaler already.

Mr. Dillon

I do not want to score points off the Deputy but I have been a trader all my life. I try to live in the world and I know that the tendency for rings to form, once a restricted market exists, is wellnigh irresistible. The present Minister for Industry and Commerce is himself the Minister who brought in a Bill to provide for fair trading conditions and it was Deputy Norton who brought in several sets of rules laid down by that fair trading body to restrain groups who were enjoying relative monopoly conditions here and all of whom had established, over the years, monopolistic practices. Some of them have come out in public and said that they were the best practices. Is that not so? This Bill is to enable them to do these very things.

Mr. Norton

We must be reading two separate Bills.

Mr. Dillon

Oh, no, we are not. I suppose the intentions of the Minister and the Deputy are of the best when they tell us what is going to happen. The Minister says that it is plain as a pikestaff that by bringing tea from India to Ireland it will be cheaper than importing it direct from London. If that is so why should Lipton——

Mr. Norton

Does he not grow tea in India?

Mr. Dillon

Lipton would not grow in India as much tea as would fill his packets for two days out of 365. He buys like everyone else.

Mr. Norton

Does he buy in India?

Mr. Dillon

I am sure he does. The group will probably be buying from Lipton's agent in Calcutta because he is probably one of the most efficient agents. They can afford to pay for the very best man, and it is quite likely that the same man will buy for us. It might be wise for us to get Lipton's man if they would allow it.

All I am asking, and goodness knows it seems to be a modest request, is that the ordinary shopkeeper in rural Ireland will be able to say: "Very well buy, but let me buy tea and try to hold my own against Liptons and against all the packaged tea."

What puzzles me is this. I think the Minister is thinking exclusively in terms of packaged tea. He appears to have made up his mind that all the tea sold in Ireland is packaged tea. That may be true of Dublin but it is not true of rural Ireland. The only way in which the merchants of rural Ireland can hold their own against Liptons, the Home and Colonial and other wholesalers of packaged tea, is by being able to buy their own tea. The Minister is talking about wholesalers as the people who sell packaged tea, but we are going to wipe out every independent tea blender in rural Ireland by this Bill. I think if Deputies realised what this means, that we are handing over the entire tea trade into the hands of a restricted number——

Mr. S. Lemass

We are doing the very opposite. I should have circulated a White Paper using words of one syllable only.

Mr. Dillon

I have forgotten more about the tea trade than the Minister ever knew. I have been a long time in the tea trade and I am appalled that Dáil Eireann should legislate to prohibit the ordinary shopkeeper in rural Ireland from getting for his customers the best quality of tea at the lowest price, in order to establish what will be less than 20 individuals controlling a trade on every penny of which they collect £100,000.

Question put and agreed to.

Section 8 agreed to.

SECTION 9.

Question proposed: "That Section 9 stand part of the Bill."

Mr. Dillon

I see that there is imprisonment provided as a penalty for offences against Section 9 and we are to go to jail if we contravene any of the provisions of this Bill. Is the House sincere about that? I imagine that section is taken from some other Bill and just put in holus bolus. Do we want the law to protect a statutory group of this kind, to provide that any citizen who violates the regulations can go to jail for six months? Perhaps the Minister would consider that between now and the Report Stage.

Mr. S. Lemass

If there is any feeling that the penalty is too severe we can discuss that.

Question put and agreed to.

Section 10 agreed to.

SECTION 11.

Mr. S. Lemass

I move amendment No. 5:—

5. Before the section, to insert the following new section:—

11.—Where, before the 30th day of September, 1959, a registered tea trader (in this section referred to as the purchaser) requests, under Section 8 of this Act, the company to act as agent for the importation of a particular consignment of tea (in this section referred to as the purchaser's consignment), the company shall forthwith inform Tea Importers, Limited (in this section referred to as the existing company) of the request, and thereupon, notwithstanding anything in the said Section 8, the following provisions shall have effect—

(a) the company shall not comply with the request of the purchaser unless and until authorised by the existing company to do so,

(b) the existing company, for the purpose of disposing of stocks of tea then held by it or in its control, may, before the expiration of the period of 14 days commencing on the date on which it was so informed of the request of the purchaser, serve by registered post on the purchaser a notice requiring the purchaser to purchase from it within a specified time and at a specified price a specified quantity of such stocks, being a quantity which is, in the opinion of the existing company, equitable having regard to the quantity of the purchaser's consignment and the quantity of such stocks,

(c) if the said notice is served on the purchaser and the purchaser complies therewith, the existing company shall forthwith authorise the company to comply with the request of the purchaser,

(d) if the existing company decide not to proceed under paragraph (b) of this section, the existing company shall, as soon as may be after so deciding, authorise the company to comply with the request of the purchaser.

As I mentioned in the course of the debate on various sections of the Bill one of the problems arising at the present time is to secure the regular and orderly disposal of the existing stocks of tea held by Tea Importers, Limited without loss to Tea Importers, Limited. They hold about 18,000,000 or 19,000,000 lb. of tea, all of which was purchased on money borrowed on State guarantee, and it is necessary to have some arrangement that that will gradually pass out to the ordinary wholesale traders who will be importing tea in the future. An arrangement has been worked out with the Tea Wholesalers Association which will ensure that. Under that arrangement wholesalers who purchase tea this year in the country of origin will accept an obligation to purchase a corresponding stock of the tea of Tea Importers, Limited, so that by September next year, it is hoped that all the stocks of Tea Importers, Limited, will have been passed out and will have been liquidated. The purpose of the amendment is to ensure that this obligation will be attached to any new entry into the trade.

Mr. Norton

When this Bill becomes law and the new company is set up, the traders operating through the new company have agreed to purchase portion of their requirements in the manner provided for in the Bill in the Articles of Association, and portion of their requirements from the present Tea Importers, Limited?

Mr. S. Lemass

I would not put it quite like that. When the new company comes into operation the old company will have a stock of tea on hands which at the moment is about 18,000,000 lb. It will possibly be smaller than that by then. These traders will start to purchase tea on their own account and if they did that without regard to that stock, Tea Importers, Limited, would be left with it and, as storage charges would be accumulating, the possibility of a loss would arise. The arrangement is that, over the next buying period, they will buy tea from India and, simultaneously, buy on an agreed basis, the tea held by Tea Importers, Limited, with the aim of having all that tea taken by the merchants by September, 1959. In that way there will be an orderly disposal of that tea without loss and, at the same time the merchants will have begun the practice of buying their own requirements directly from the countries of origin. After September, 1959, there will be no problem of existing stocks and they will buy their whole stocks from the country of origin.

Mr. Norton

In other words, the tea merchants in this new company will, when buying in the country of origin, buy in such a manner that they will regulate their orders in such a way as to syphon off the 18,000,000 lb. of tea which Tea Importers now have?

Mr. S. Lemass

There will be no restriction on any quantity which merchants may buy, but for every ten chests that a merchant buys in India he will buy, say, three or four chests from Tea Importers, Limited.

Mr. Norton

The tea merchants registered under this Bill have contracted to take 18,000,000 lb. of tea from Tea Importers, Limited.

Mr. Sweetman

Not £18,000,000; 18,000,000 lb. weight.

Mr. S. Lemass

I think it is likely that for this year the merchants would prefer that Tea Importers, Limited would buy some part of the total quantity of tea to be bought. That will be a matter for negotiation, because perhaps they would have less difficulty to programme their own purchases ahead, but the intention is that by September, 1959, the trade will be back in the hands of the merchants.

Mr. Dillon

Is the Minister in a position to say has the debt accumulated under State guarantee by Tea Importers, Limited, been liquidated?

Mr. S. Lemass

There is about £200,000.

Mr. Norton

Surely not £200,000?

Mr. S. Lemass

Yes, about £200,000.

Mr. Sweetman

I thought that was liquidated last September. I think the original debt was liquidated and this is a new debt.

Mr. S. Lemass

I think there is some debit balance on the profit and loss.

Mr. Dillon

I should like to make this clear. We all know that, in the ordinary trading, there were some trading losses and balances, but there was a specific loss built up by us, as the Minister will remember, when we were holding back the price of tea in the hope that world prices would come back. That was a funded loss, and we then proceeded to work that off over a further period.

Mr. S. Lemass

My recollection is that there was also an earlier loss of a similar kind, or an earlier debit, on the profit and loss account and, on the sum total of these two debits, there is still a certain amount due.

Mr. Sweetman

The Minister, in his prepared speech on the Second Reading, referred to the termination of the method of financing to which we are now referring. That is being worked off.

Mr. S. Lemass

Tea Importers, Limited, will still have the Government guarantee attached to its borrowings until these borrowings are repaid.

Mr. Sweetman

I understand that perfectly.

Dr. Esmonde

The Minister stated that Tea Importers, Limited, have 18,000,000 lb. of tea on hands.

Mr. S. Lemass

In stocks or in transit-purchased, anyway.

Dr. Esmonde

I understand that normally each year stocks for the year are bought between August and the end of the year. Is that not right?

Mr. S. Lemass

Sometimes between the middle of the year and the end of September.

Dr. Esmonde

That is the usual procedure. In the ordinary course of events, whether or not this company comes into existence, nobody would be buying tea or importing tea until next August or September. The wholesalers or retailers will have to buy tea from somebody. If this supply of tea is in the country, surely it will be disposed of quite easily and simply without necessarily legislating in the matter; it will automatically be bought by the consumers.

Mr. S. Lemass

There must always be a stock there.

Dr. Esmonde

I do not see how Tea Importers, Limited, could be left with that tea in 1959.

Mr. S. Lemass

They will not. It will be gone by then.

Dr. Esmonde

It will be gone this year.

Mr. S. Lemass

No.

Dr. Esmonde

Why? Is there a couple of years' supply in the country?

Mr. S. Lemass

It is very nearly a years' supply anyway.

Dr. Esmonde

The Minister said on the Second Reading that they buy a year's supply of tea. One of the reasons for this Bill is to ensure that that supply of tea is bought each year. We have this balance of tea. Surely that will be sold. There is no question about it.

Mr. S. Lemass

It will all be sold, certainly.

Dr. Esmonde

Nobody may import tea except Tea Importers, Limited. Why are they worrying? The Irish people must still drink tea and they will sell that tea, even if they can get it only from Tea Importers, Limited. Automatically, it will be bought from them and automatically it will be taken over by the consumers of tea.

Mr. S. Lemass

It will not be taken over. On 1st July next, there will be nobody to take it over, except the wholesale tea merchants in the country, and the purpose of the amendment is to regulate the procedure by which the wholesale tea merchants will, in fact, take it over.

Mr. Dillon

We must encourage them to take it over.

Dr. Esmonde

Surely they cannot take it off anybody else.

Mr. S. Lemass

On 1st July, they can buy in India quite freely.

Dr. Esmonde

But they cannot import.

Mr. S. Lemass

Yes, they can.

Dr. Esmonde

I thought this Bill was to limit import. No one can import tea except the company.

Mr. Dillon

Is it not the plain truth that Tea Importers, Limited have in stock a large quantity of tea that nobody on God's earth would buy, unless he was made buy it? On 1st July next, the boys who get in on the ground-floor can buy tea anywhere they like.

Mr. S. Lemass

Any merchant can buy, whether he is on the roof or on the ground-floor.

Mr. Dillon

The boys on the ground floor will be free to buy anywhere they like, and those are the only boys who will be allowed to import tea.

Mr. S. Lemass

I should have circulated this White Paper.

Mr. Dillon

Unless there is some inducement to make the boys take up this tea, they will not take it up.

Mr. Sweetman

The White Paper might have prevented the Minister contradicting himself so often.

Mr. Dillon

If you are going to get rid of the tea, there must be some inducement, such as that envisaged here. On the whole, if you are going to operate this rotten, cock-eyed, crazy scheme, this is as good a way as any other to do it.

Mr. S. Lemass

We are not going to operate the Deputy's scheme, anyway.

Dr. Esmonde

The Minister said distinctly anyone can import tea. Is that true or not?

Mr. S. Lemass

On 1st July, anybody who is a registered tea merchant can purchase tea.

Dr. Esmonde

Himself directly?

Mr. S. Lemass

And import it through the company.

Dr. Esmonde

Ah!

Mr. S. Lemass

But he can import as much as he likes. He can fill every store in the country with tea, if he likes.

Dr. Esmonde

That is a different thing, but he cannot get the tea, unless he goes through the company.

Mr. S. Lemass

The company cannot refuse to bring it in.

Mr. Norton

Is it the position that, in fact, they will not bring it in? They will arrange with some shipping line to take it in for them. The importer has to bring it in by ship, at any rate.

Mr. Dillon

If he buys in the country of origin and gets in on the ground-floor and has the means to finance the transaction, he can bring it in.

Amendment agreed to.

Section 11 agreed to.

Title agreed to.

Bill reported with amendments.

Report Stage ordered for Wednesday, 19th March.