Certain allegations were made in connection with the publication of one of the Orders to be confirmed under this Bill during the Second Reading and the Committee Stage. The principal allegation made was that under the arrangements whereby import licences for the cloth in question are issued against orders placed for Irish-made cloth, the insistence by the sole Irish manufacturing company that orders should be placed only with one agent put that agent in a monopoly position in that all orders had to be channelled through him. I have since made inquiries of the manufacturing company and the company concerned have informed my Department that, in fact, there is no obligation on any trader to place orders through their agents. They are quite willing to accept orders direct and quite a number of orders are placed with the company direct by traders.
I have in fact, as a result of personal inquiry from one of the oldest and biggest Cork traders, in that connection ascertained that that Cork trader places orders direct with the manufacturing company. There have, of course, been instances when the firm refused to accept orders direct where they were not satisfied with the credit standing of the traders concerned, but the same criterion of creditworthiness is applied by the firm to all orders, whether received direct or through the agent.
I should perhaps at this stage explain for the benefit of the House the system which operates whereby duty-free import licences are issued, particularly in the textile trade. Where there is an import duty in operation in relation to a particular textile and in the event that the manufacturing output of that textile does not meet fully the home market or where it is desirable to make available a sufficient variety to the home trader, duty free import licences are issued on a certain ratio.
Let us take, for example, a ratio of one to five. That example does not apply to any specific case. If a trader proves to the Department that he has, in fact, ordered one yard of a particular cloth from a home manufacturer, he is entitled to a duty-free licence to import five yards of foreign cloth. Lest there should be any misunderstanding, I should like to stress that while orders may be passed through the company's agent for Irish cloths, import licences are issued only against confirmation of orders issued by the company direct to the traders concerned.
It was also suggested that the existence of the agent involved an additional and unnecessarily large item of cost for traders buying cloth. The position is that the company's factory is located in a provincial town and if it had not an agent in Dublin, where the bulk of the market for its product is located, it would have to maintain its own separate sales organisation in Dublin. It is not a fact, as was suggested during the debate, that the arrangements whereby import facilities are related to orders placed with the Irish firm render a selling organisation unnecessary. This part of the textile trade, more than some of the sectors in that trade, is one in which design, fashion trends, etc., are of importance and a proper sales organisation, including travellers, is of importance to the customers. The view expressed that a sales organisation is not required is certainly one which would not be endorsed by the customers of the firm.
Complaints have, in fact, been made by traders in the textile business from time to time that a shortcoming of certain industrialists is that they rely too much on protection as a means of selling their goods and do not provide adequate service in this respect for their customers. In the present instance the company concerned gave careful consideration to the question of how best to provide the necessary sales service for their customers. For a period they operated their own sales office in Dublin, but later decided that the most economic method of providing the necessary sales service was to appoint a sole representative in Dublin who had previous experience of the trade concerned and who would provide the necessary accommodation, office staff, travellers, etc.
The reason one agent, rather than a number of agents, was appointed is again a matter of cost. A number of agents would have led to duplication of effort and expenditure with consequential higher prices for the firm's product. It is quite a normal feature in the textile business to operate on a sole agency basis. The company have indicated that they are quite satisfied that the remuneration which the agent receives for his services, which include the provision of office accommodation, office staff and travellers, is moderate having regard to the nature of the services provided and that it is the least costly way in which these services could be obtained.
From what I have said, I think it is clear that there is no basis for the allegation made that the selling arrangements of the firm have created a monopoly. It is a matter for regret that those allegations should have been made, as the only effect has been to create difficulty for the Irish firm which is at present in a state of development and which is giving substantial employment in a provincial area. I might add that the particular cloth that the Deputies had in mind is one in respect of which the import duty was put on in 1958 and it was confirmed in the last imposition of Duties Act, not in the present Bill.
