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Dáil Éireann debate -
Wednesday, 16 Apr 1969

Vol. 239 No. 10

Committee on Finance. - Restrictive Trade Practices (Confirmation of Order) Bill, 1968: Second Stage.

I move: "That the Bill be now read a Second Time."

The object of the Bill is to confirm an Order which I have made under the Restrictive Trade Practices Act, 1953, on the recommendation of the Fair Trade Commission, in regard to the supply and distribution to retailers of jewellery, watches and clocks.

Deputies have already received copies of the commission's report of their inquiry into this matter, but I propose to give here a brief summary of its contents.

The inquiry was undertaken by the Fair Trade Commission on its own initiative following complaints from retailers that they were experiencing difficulty in obtaining supplies of jewellery, watches and clocks.

There are 30 Irish manufacturers of jewellery, and eight watch and clock assemblers. They normally supply their products direct to the retail trade. Some manufacturers and assemblers also import completed products and these are also supplied direct to the retail trade. There are some 70 wholesale firms most of which are engaged in the distribution of imported products. There are several hundred retail outlets. There are three trade associations representing retail jewellers and two organisations whose members are engaged in the manufacture of jewellery and in the assembly of watches and clocks.

Thirty witnesses representing trade associations, manufacturers, wholesalers and retailers were examined in the course of the inquiry. Neither of the two organisations representing manufacturers and assemblers was involved in activities coming within the scope of the inquiry.

The commission examined in detail the existing arrangements under which jewellery, watches and clocks are supplied to retailers. They expressed the view that certain practices obtaining in the supply and distribution of these commodities to retailers are not compatible with the public interest. These practices include the confining of supplies to retail firms which comply with standards conceived or established by retail trade associations; commercial pressures on suppliers to confine supplies to such retailers by means such as the issue of lists of suppliers approved by retail trade associations; refusal of supplies to a retailer by reason of non-membership of a trade association or on representations by a competitor; and the recommending or suggesting of retail prices for watches and clocks. The commission recommend that these practices should cease; that suppliers should be free to determine their own sales policy based on equitable criteria and that retail trade associations should be prohibited from collusive action designed to promote any restrictive practices detrimental to any sector of the jewellery trade or the public good. The commission also recommend that no action should be taken regarding complaints made by some retailers that certain wholesalers were also selling goods retail.

I have accepted the recommendations of the commission except that regarding the recommending or suggesting of retail prices for watches and clocks and I have made the Restrictive Trade Practices (Jewellery, Watches and Clocks) Order, 1968, to give effect to the recommendations which I have accepted. As regards retail prices, I am satisfied that the terms of the Order and in particular the provisions of Article 7, will be sufficient to ensure a fair and competitive retail price mechanism.

The Restrictive Trade Practices Act, 1953, provides that an Order of this kind shall not have effect until it is confirmed by an Act of the Oireachtas. The Bill now before the Dáil is the confirming Bill which is necessary to give force of law to the Order concerned. With Bills of this kind, the Order which it is proposed to confirm may not be amended by the Oireachtas but may be accepted or rejected as it stands. The matters with which the Order deals have been the subject of a detailed public inquiry by the Fair Trade Commission and their report sets out the arguments in favour of adopting the provisions embodied in the Order. I can, therefore, recommend this confirmation Bill to the Dáil without reservation. Its enactment should result in the development of a more competitive and diversified system of trading with consequent benefits to the public.

As the Minister has said, this is a confirmation Bill and we have no power to amend it; we must either accept it in toto or reject it. There is not much point in opposing it because the Government with their majority can force it through unamended. This means that we in Parliament have really only the right to express our views on the matter. It seems also that the Government have no choice but to accept this order. They have reached the point of no return in parliamentary arrangement and, as I understand it, this Bill must now be passed here this evening and be the responsibility of the Government.

We on this side of the House have always been solicitous that the consumer shall be protected and that there shall be fair trade. However, there are two sides to every coin, and the other side of the coin is that there are items like cars, shoes, bicycles, radio and television sets the manufacturers of which have their agencies in certain cities and towns and do not sell their goods to anybody else. One might find in a provincial town that there was one supplier for radio or television sets or one supplier of a certain make of shoes. In fact, very often I have had requests made to me to do something about getting supplies of that sort of goods for somebody else.

It is all a question of agencies. In my own business experience the company I am involved in is the sole agent for a certain operation which it does. This raises the question as to whether it is wise that we should insist that a certain make of watch or clock or a certain type of instrument or jewellery should be available to all or should be available to only one particular purchaser. There is the question of service and the question of stocking of spares. The idea of having agencies for a particular type of goods is that a comprehensive service in respect of spares and repairs is required. Very often the main manufacturer in giving an agency insists upon minimum stocks of spares and a certain level of service which must be available to every purchaser of the article, be it a car, a watch or anything else.

Therefore we on this side of the House approach the matter in the knowledge that we can do nothing about it. We temper the view that it seems odd that jewellery should be the only article that is affected with the fact of which the Minister has reminded us here, that a commission sat on this and produced its findings. Again, a commission which sits and takes evidence is not a court of law and very often the findings produced, however honest and wide in approach, represent only an expression of opinion as a result of the evidence considered. It does not mean that it is a mortal sin or an offence against the State to behave differently from what the commission recommends.

The position in regard to this legislation is that when it is passed it will be an offence against the State to behave differently from what the commission recommended except where the Minister says he has not accepted a recommendation. We do not want to be accused of sitting on the fence in regard to this legislation, but we would wish to indicate our surprise that it is only in this particular line of trade that such a recommendation has been made and acted upon and that many other aspects I have mentioned have not been touched. I do not think there are many of them that could be touched. From a practical point of view it is impossible to have everybody providing a certain type of manufactured commodity for which there is a necessity for spares and service, because if the total volume of turnover drops then the spares necessary and the level of service necessary cannot be available. Therefore there ought to be a stockist with a minimum turnover. I am not absolutely competent to say whether or not this is necessary, in relation to, say, an expensive watch, but if I purchased an expensive watch and wished to get service and spares in my own town I would expect that such would be available to me. I am not certain that this could happen if everybody in the town could sell this type of watch.

This is a case where the Minister has to make a decision. He will accept that I am not approaching this in a spirit of criticism of him. I am merely giving my thoughts and the thoughts of my Party on the subject. We have considered this, and we do not know whether this is a right or a wrong thing to do. Again let me say that because this is a confirmation Bill and because of the Government majority here, there is nothing an Opposition Party can do except to make comment upon it.

On behalf of the Labour Party I congratulate the Minister on introducing the legislation necessary to bring this Order into effect. I am surprised at the attitude of the Fine Gael Party on this. Deputy Donegan puts up a whole lot of suppositions that would not bear any examination at all. An independent commission sat, heard evidence and produced a report which the Minister in his wisdom considered and felt was justified. Now the Minister is bringing in legislation to implement that Order. The pity is — this is something in which I agree with Deputy Donegan — that there are not more of them. There are too many restrictive trade practices and the Fair Trade Commission should, in my opinion, be used a great deal more. Within the past week I had occasion to send to the Minister a request that a certain matter, connected with an entirely different trade from the jewellery trade, should be the subject of an inquiry by the Fair Trade Commission. We, in the Labour Party, welcome free trade. We congratulate the Minister on bringing in this Bill and giving the Order the force of law.

This is a little bitteen of a Bill. It is a short Bill consisting of five or six lines; the first section consists of three-and-a-half lines and the second section of one-and-a-half lines. Looking at it casually one would think there could be nothing very damaging in it, but from the point of view of its presentation—I do not blame the Minister for this; I blame the system—it is a most dangerous Bill. I shall not be coming back to this House after the Dissolution and, for that reason, I want once more to protest against something against which I have consistently and persistently protested in this House and to commend my protest to the Minister as something worthy at least of investigation.

We have on the Order Paper item No. 21, Restrictive Trade Practices (Confirmation of Order) Bill, 1968. Some indication should have been given to the Members of this House as to the particular Confirmation Order involved. I have always objected to administrative law. I object to it being used in this Bill. When it is being used, however, every effort should be made to make as public as possible the intention behind such administrative law. Unless a Deputy were particularly interested in this matter he could be unaware of the fact that this Bill was about to become an Act of this House. Any member of the public who wished to keep himself or herself informed would be in a similar position. This is both wrong and undemocratic and I suggest to the Minister that in future, when Confirmation Orders are being made law, some indication should be given in the Title of the Bill as to what particular Order is sought to be confirmed.

I object, also, to the manner in which the Bill is introduced. It is a very bad thing that we should find ourselves, as the Minister tells us, in the position that we cannot amend an Order made by the Minister under the Restrictive Trade Practices Act, 1953. That leads me to ask why legislation of this kind, passed in 1953, should have survived so long. I should like every Member of this House to be in the position in which the terms contained in an Order, which we cannot amend, should be included in a Bill in the ordinary way, that Bill to follow the ordinary parliamentary process. If that were done the information would be easily procured, readily assimilated and digested by Deputies and Deputies could suggest amendments either by way of deletion or addition. As Deputy Donegan said, we find ourselves in the position that our hands are tied.

Only two things can happen to this Bill: it can be passed or it can be thrown out. As we cannot throw it out, I suggest to the Minister that he should withdraw the Bill. He may ask why. The Minister has explained the process through which this Bill has come before the House. There was a hearing before the Fair Trade Commission. I suggest to the Minister that the recommendations of the commission may be sensible but the manner in which the commission set about investigating this matter in relation to the conditions which obtained in regard to the supply and distribution to retailers of jewellery, watches and clocks was highly irregular. It is not the first time, I am sure, that such irregularities have occurred in hearings by the Fair Trade Commission. In my opinion this arises from a misreading of section 7 (6) of the Restrictive Trade Practices Act, 1953, which provides:

An inquiry shall be held in public save in so far as, in the opinion of the member or members holding it, private sittings may be necessary to avoid any disclosure of confidential information which might materially injure the legitimate business interests of any person.

I can well understand a private sitting so that the private business of a business man would not be published in the press. But what happened at the particular inquiry in which I am interested at the moment? We learn from the report of the inquiry, page 7, paragraph 3:

Public sittings commenced on 20th July, 1967, and ended on 3rd August, 1967. We examined on oath or affirmation 27 witnesses in the course of public sittings and evidence was taken from three witnesses in private.

Prima facie, the commission was acting within its powers in hearing three witnesses in private but, in effect, what did this mean? It meant that three witnesses went into that inquiry; it meant that nobody was allowed to hear their evidence; it meant that no note was taken of their evidence and those who opposed the viewpoints put forward by these three witnesses were not allowed to cross-examine these witnesses. This was not acting either in the intent or in the spirit of the Restrictive Trade Practices Act.

I do not believe the Fair Trade Commission is empowered—I see no other empowering section in the Act—by section 7 (6) to act in a manner which is, in my opinion, very nearly, if not completely, unconstitutional. It is certainly a denial of the ordinary principles of natural justice followed in the courts. I would ask the Minister to inquire into this and inquire from the Fair Trade Commission if it is a fact that they did what I allege because I am not speaking from first hand; I am telling the Minister what I was told by people interested in this matter.

I do not want to traverse the ground already traversed by Deputy Donegan. He has pointed out that there is certainly a case to be made for some modification of the Order, if not indeed the complete wiping out of the Order. I do not think there should be imputed to the jewellery trade an intention to operate a restrictive practice. The jewellery trade is very fully aware of the skill necessary for the proper operation of the trade. I might remind the Minister that we have passed various Acts which acknowledge publicly that certain people must have certain skills before they can operate certain trades or professions. The Opticians Act is one Act that occurs to me. The retail jewellers would like to impress upon the Minister that their trade, particularly in regard to fine jewellery, watches and clocks, is a highly skilled trade, not alone from the point of view of the selling of these articles but from the point of view of advising customers—I believe they like to call them "clients"— and also from the point of view of storing watches, clocks and other goods which must be stored under ideal conditions to maintain their best condition prior to sale. The jewellers object to the fact that under the dispensation which will be established if this Bill becomes law, one will be able to go in and buy a lollipop with one hand and, with the other hand, a very valuable 50-guinea watch from one and the same person. I think the jewellery trade has a legitimate grouse. I think their proposals to the Fair Trade Commission were legitimate. Let me quote paragraph 35, which appears at page 18 of the Report of the inquiry into the conditions which obtain in regard to the supply and distribution to retailers of jewellery, watches and clocks:

Broadly, the avowed objective of the three retail associations is that the retailing of jewellery, watches and clocks should be confined to firms which comply with standards conceived or established by the associations themselves.

The "associations themselves", of course, are a conglomeration of the skilled jewellery trade—people who have amassed skills as a result of working for years in the trade. Like many other trades in this country, the jewellery trade is one that in many cases passes on from father to son. The Report continues:

The principal argument advanced by the associations in support of their policy is that a high degree of knowledge and skill and a proper after-sales service are necessary for the effective conduct of the retail jewellery trade.

This is not controverted anywhere in the subsequent portion of the Fair Trade Commission's Report. It was established by the evidence brought forward at the hearing before the Fair Trade Commission. Paragraph 35 goes on further to say:

The associations apprehend that, if firms which do not possess these qualifications and facilities engage in the trade, the public will be badly served, and the jewellery trade will be brought into disrepute.

I can understand the jewellery trade being worried about its trading being brought into disrepute. However, what the Minister should be more worried about is that the public might well be very badly served under the circumstances which would arise as a result of the passing into law of this measure. The Report of the Fair Trade Commission does not controvert any of this. In fact, it nearly accepts it by implication. It continues:

The crucial question is whether these considerations justify the application by retail trade associations of drastic measures designed to ensure that jewellery, watches and clocks will be sold exclusively by those retailers who, in the judgment of the associations, are qualified to engage in the trade.

From that, I think the Minister will infer as facilely as I infer that the Fair Trade Commission accepts everything in paragraph 35 of its Report and simply goes on to say then—by the use of hyperbole, in my opinion:

The crucial question is whether these considerations justify the application by retail trade associations of drastic measures...

One would think the retail trade association were going out with guns to shoot anybody going into competition with them. Far from it. In my opinion, the retail trade are acting in a most decorous fashion. When they found out that the hairdressers down the street were selling exactly the same sort of watch as the retail jewellery trade, they simply went to the wholesalers and manufacturers and said, in effect: "If you sell to Miss Murphy down the road the same watches as you are selling to us—although we have all the skill to advise as to how to keep the watch and whether it is a good watch and although we have the skill to repair it afterwards—we shall not deal with you and we shall see that our colleagues in the jewellery trade will not deal with you either."

In a rather impudent way, first the Fair Trade Commission and then the Minister said, in effect: "You cannot do that. How dare you. Anybody who damn well likes will sell a watch under any circumstances." The small shopkeeper can hit his child on the head with a watch and sell that same watch over the counter the next day to a customer—which is something no member of the jewellery trade would do. I am apprehensive about this particular exercise because we are living in days when people who hitherto could not afford to buy these watches can now afford to do so and they might prefer to go to the more homely surroundings of the local sweetshop or tobacconist than into a jewellery shop to purchase their watches or their fine and delicate jewellery. At least 90 if not 95 per cent of the jewellery trade's customers know nothing whatsoever about what they are buying. The fact that there was a jewellery trade in this country going back many centuries with fine conditions, was a safeguard for these people and was becoming increasingly more a safeguard as the retail market for that sort of jewellery became more widespread. Only highly-skilled people who had served their time could advise and give the service which the retail trade gives. I shall not keep the House any longer on this matter because Deputy Donegan has very fully and ably stated our case.

I would remind the Minister of one thing. When discussing the Bill immediately preceding this one, the Minister, speaking of much more august bodies than the Fair Trade Commission, said that the Government were not bound to act on the Report or recommendations of NIEC or on the Buchanan Report. Equally, the Minister is not bound to act on this. The fact that the people who signed it may be senior counsel or professors or lecturers at a university should not blind us to the reality that they can do damn silly things at times. I submit that they did a damn silly thing in their Report to the Minister in this particular case. It was stupid, piffling sort of stuff such as we read in paragraph 35 where they say, in effect: "We accept what the jewellery trade says but does this justify our taking any drastic steps?" The word "drastic" was a figment of the imagination of the august gentlemen who signed this Report.

Nothing in the Report indicated that any drastic step would be taken by any retail jewellers' association. For that reason—being powerless, as Deputy Donegan pointed out, to do anything to arrest any trend suggested in any portion of the Order we are asked to pass—I would appeal to the Minister, in the light of what Deputy Donegan has said and in the light of what I have said, at least to withdraw this Bill until such time as he has fully investigated the wisdom, commonsense or even the factual basis of the Report upon which he prepared the Order which this Bill seeks to turn into an Act.

I might deal, first of all, with the point made by Deputy Barrett about the conduct of the Inquiry by the Fair Trade Commission. I do not know whether what he said was correct and, as he said himself, he had it at second- or third-hand. All I can say in relation to it is that I shall inquire into whether that was correct and, if so, pursue the matter further. On the merits of this matter, I think I should make it clear that it is not a question of picking out this particular trade and applying certain restrictions to it which we are not applying to anybody else. In fact, there are similar Orders in operation in regard to a number of trades and similar kinds of regulations under the Orders are applied to them.

Deputy Barrett is doing less than justice to the Fair Trade Commission in the section of their report which he quoted and when he represented the commission as saying to the jewellers: "We accept your argument but does this justify the drastic action which has been taken?" He went on to say that it was not drastic. It seems to be a more reasonable interpretation that the commission were saying that there were arguments in favour of what the trade association was saying but there were arguments the other way and where did the balance lie in so far as the public interest was concerned. The commission came down in favour of taking away these restrictions in the public interest.

I want to make it clear that the position is not as it has been suggested it was by Deputy Barrett and that under this Order the object is to free the suppliers from the pressure of the organised trade but the supplier is still free to determine the type of outlet he will supply and he may limit the number of outlets with which he is dealing. There is nothing against this in the Order.

He is hardly going to supply watches to publichouses anyway.

It is very unlikely but what he is required to do is to treat in the same way the outlets with which he deals. The arguments that have been put forward here with some force were put before the commission and subject to the exception I mentioned when introducing the Bill I have been satisfied that the recommendations of the commission were the best that could be made in the public interest. I do not pretend, nor do the commission pretend, as is clear from their report, that there is a clear-cut black and white in this situation. This is not so as there is a question of the balance of advantage. The commission took the view that the balance came down in favour of freeing the suppliers from this kind of organised pressure of the trade. I agree with that view. I think this is so and I think it is in the public interest. I do think that the arguments advanced by Deputy Barrett and advanced by the trade at the hearing were grossly exaggerated. As Deputy Burke said, I do not think that you are going to find watches and clocks in publichouses or that kind of place. The trade will continue as it has done in the——

I could mention a lot of publichouses in which they sell watches and they are not doing any harm.

How far back have they been doing this? Have they been doing it for years?

If they have been they will be able to do it now with an easy conscience that they will not be caught at it. I do not think there will be a substantial change in the pattern except that there will be, I hope, as a result of this, fair trading as between the people concerned and without organised pressure on the suppliers. It is my belief that the case against this is grossly exaggerated and that on balance the public interest does require the implementation of the commission's report in the way I have indicated to the House.

The Minister indicated that he was going to look at something which Deputy Barrett mentioned. This is a question of whether the Bill goes through all its Stages now or not. Does the Minister want to leave it over to look at this?

What I had in mind was in regard to the general procedure. Deputy Barrett contended that this procedure followed, in his view, on a misinterpretation of the original Act and what I undertook to do was to look into that. If it appears that his contention is correct I will see what can be done about the future procedure of the commission. I do not think it affects the findings in this case nor did Deputy Barrett allege that it did.

That is all right.

Question put and agreed to.
Agreed to take remaining Stages today.
Bill put through Committee, reported without amendment, received for final consideration and passed.