Restrictive Practices (Confirmation of Order) Bill, 1975: Second Stage.

Parliamentary Secretary to the Minister for Industry and Commerce (Mr. Bruton)

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

The purpose of this Bill is to confirm an order which was made by the Minister for Industry and Commerce under the Restrictive Practices Act, 1972. The order was made on the recommendation of the Restrictive Practices Commission which was contained in their report of a special review carried out into the supply and distribution of motor spirits. The report and order were presented to both Houses of the Oireachtas on 18th June, 1975.

A public inquiry was held by the Restrictive Practices Commission into the supply and distribution of motor spirit in 1970. The inquiry was held at the request of the Minister for Industry and Commerce following representations made to him by the Society of the Irish Motor Industry that the growth in the number of motor spirit retail outlets should be curbed.

In the report of the inquiry the Restrictive Practices Commission said that the number of company-owned outlets had been increasing unduly and the percentage of total sales of motor spirit through these outlets had increased substantially. The commission felt that if this trend was to continue unchecked the petrol companies would gain substantial control over retail distribution. Such control would be likely to reduce competition, facilitate restrictive practices such as market sharing and price fixing, and extend the economic power of the multi-national oil companies.

The Restrictive Practices Commission recommended, inter alia, that petrol companies should not open any new company-owned retail outlets for a period of three years. The Minister for Industry and Commerce accepted the recommendation of the Restrictive Practices Commission and on the 15th June, 1972 made the Restrictive Trade Practices (Motor Spirit) Order, 1972. Article 3 of that order prohibits oil companies from opening new company-owned petrol stations for three years ending on the 18th July, 1975. However, there were three exceptions to the prohibition. The first exception was a transitional one applied to certain retail stations which were under construction when the 1972 order was made. The other two allowed a company-owned retail outlet to be opened within a mile of one which had closed down (a) because of compulsory purchase by a local authority or (b) because of loss of trade, due to road diversion. The Minister undertook at the time to ask the Restrictive Practices Commission to review the operation of the prohibition before it expired on the completion of its three year period of application.

The Restrictive Practices Commission carried out the review last March. The review took the form of a series of private hearings which were attended by representatives of seven oil companies, the Society of the Irish Motor Industry and the Irish Petrol Retailers' Association. The report of this review now shows that the order had been reasonably effective. Although the number of independent outlets continued to decrease in 1974, the number of company-owned outlets which had previously been increasing also decreased. In addition, while sales by independents continued to increase, sales through company-owned outlets, which had increased fairly substantially in previous years, fell in 1974. The commission are satisfied, therefore, that the prohibition is curbing the growth in the number of company-owned stations and in the oil companies' share of retail sales. The commission recognises that the present state of uncertainty in the oil industry makes it unlikely that the oil companies would try to increase the number of company-owned outlets even if the prohibition were lifted. But they feel that this position would not hold good in the event of a return to normal conditions in the oil industry. They consider, therefore, that the prohibition should be extended for a further period.

The oil companies, quite naturally, would not welcome any continuation of the prohibition, but in the present state of the industry they would not be opposed to an extension for a further two years. The petrol retailers, also quite naturally, wanted an extension for as long as possible. The commission felt that the extension should be for a period of three years and they recommended accordingly.

The report also states that a number of oil companies were critical of the "one mile limit" for the replacement of company-owned stations which were closed in circumstances defined in the original order. They suggested that the limit should be increased or removed altogether. The commission pointed out that the purpose of the exceptions was to facilitate a company to retain the business it had in a particular area which it could lose because of traffic diversion resulting from the construction of a new road near its existing outlet or because of the compulsory acquisition of its existing outlet by a local authority. They felt if there was no limit the exceptions might be abused, but bearing in mind the difficulty of acquiring sites within a mile radius and of obtaining planning permission they considered that it would be reasonable to extend the limit from one to three miles and they recommended accordingly.

The Minister in making the order gives effect to the commission's recommendations relating both to the extension of the period of prohibition and the "mile limit".

The commission pointed out in their report that during the hearings witnesses raised matters which had an indirect bearing on the operation of the 1972 order. These included the effect of increasing costs, petrol outlets in new suburbs or satellite towns, the effect of various types of agreements and the significance of promotional schemes and hours of trading. The terms of reference of the review precluded the commission from investigating these matters in detail, but they recognise that they have a bearing on the operation of the order and they consider that they warrant more extensive investigation. They recommended that they should review these matters before the new extended period of prohibition expires, and the Minister has accepted this recommendation.

It has been suggested that the prohibition on the opening of new company-owned outlets could preclude new retail chains from opening up for business in Ireland in competition with the major oil companies which are already dominant in the market. I accept that the continuation of the prohibition could have the effect of preventing the entry of a new competitor to the market, but I would point out that the Minister has the power to revoke or amend the order and would be prepared to do this at any time that it appeared desirable in the interests of promoting competition.

The Restrictive Practices Act, 1972, provides that orders of this kind shall not have effect unless they are confirmed by Act of the Oireachtas. The Bill now before the Dáil is the confirming Bill which is necessary to give the force of law to the order concerned. With a Bill of this kind the order which it is proposed to confirm may not be amended by the Oireachtas but must be accepted or rejected as it stands. The matters with which the order deals have been the subject of a detailed special review by the Restrictive Practices Commission and their report, which was presented to this House, sets out the arguments in favour of adopting the provisions embodied in the order.

I commend the Bill to the House.

Mr. Lalor

In general we support this Bill continuing the order made three years ago while I was Minister for Industry and Commerce. It is a little unfortunate, however, that circumstances are such that the order cannot be amended but must be accepted in toto. As I see it, there is overall necessity for the continuation of this order from the point of view of prohibition. I have reservations in connection with the extension of the restriction from the one mile originally imposed to three miles. I have to confess that I am not au fait with the latest report from the Restrictive Practices Commission in this regard. I had a copy of the order circulated to me. Maybe I had a copy of the commission's report, but it seems to have escaped my attention. I had intended referring to subsection (2) of section 8 of the Restrictive Practices Act, which is quoted in the order, and which lays down specifically that the amendment of this order can be made by the Minister, having considered the report of the commission and after consultation with any other Minister concerned. It now appears that the Parliamentary Secretary has covered in his opening statement a matter to which I intended to refer.

The purpose of the Bill is to confirm an order made by me as Minister for Industry and Commerce, an order subject to review at the end of the three-year period. I, as Minister at the time, undertook to ask the Restrictive Practices Commission to review the operation of the order before the three-year period expired. I am not surprised at the outcome of that review. I am fully in agreement with the purpose of this order.

One of the problems we have, and I think it is no harm to spell it out at this stage, is the abuse of privilege by a number of companies which have been allowed to put up their own company stations. If there are difficulties they are not related to the various oil companies not being, able to have a sufficiency of their own controlled outlets, and what prompted me to make the order three years ago was the fact that companies were abusing the privilege they had. This was the view also of the Restrictive Practices Commission at the time.

We have the situation where there is consistent bullying by the petrol companies of the operators or managers who handle their various outlets. The initial introduction of a manager to an outlet is always very pleasant; the man who takes up the appointment as manager of a company-owned outlet has the impression that he will get a good livelihood out of it, and he will naturally try and sell as much petrol as he can. But the demands for sales keep increasing and the sales pressure of the company very often makes it impossible for him to continue to operate. I have heard many complaints about that, both as Minister for Industry and Commerce and subsequently as Deputy, and I would like to be able to find or recommend to the Minister some formula whereby this prohibition order could be extended so that only private or individual filling stations could be erected anywhere. The case made was as to who would provide in isolated areas petrol stations to cater for the growing population needing these facilities. There is nothing to stop any young entrepreneur from going ahead, getting the rights from a petrol company and erecting his own station.

I am wondering how genuine the figures quoted by the Parliamentary Secretary are in regard to sales. He said that the Restrictive Practices Commission Report of the review shows the order to have been reasonably effective. He went on to say:

Although the number of independent outlets continued to decrease in 1974, the number of company-owned outlets which had previously been increasing also decreased. In addition, while sales by independents continued to increase, sales through company-owned outlets, which had increased fairly substantially in previous years, fell in 1974. The Commission are satisfied, therefore, that the prohibition is curbing the growth in the number of company-owned stations and in the oil companies' share of retail sales.

That aspect appeals to me. I am extremely pleased to learn that during last year, when there was a difficulty in procuring petrol, and being mindful of the fact that even during times of scarcity companies channelled most of their supplies into company-owned stations, the fact remains that the sales by company-owned stations fell during 1974. I am afraid there is a peculiar reason for that. It was not necessary for the big companies, because of the scarcity of petrol, to offer their famous Green Shield stamps. Now, in 1975, we have them again building up pressure on the individual manager to try to achieve certain targets, now that petrol has become available again. I think the figures will change in 1975. I know there is this undue pressure to achieve targets by companies in regard to their company-owned stations and, in the achieving of targets, the managers are forced to use trading stamps.

I was interested to note the Parliamentary Secretary say that during the hearing a number of witnesses had raised matters which had an indirect bearing on the operation of the 1972 order. I am at a disadvantage because I have not read this report. He said that the matters raised included the effects of increasing costs, petrol outlets in new suburbs or satellite towns and the effect of various types of agreements and the significance of promotional schemes and hours of trading.

I am very interested in the promotional schemes, because I feel that the sooner the Minister for Industry and Commerce—who unfortunately is not handling this, he has been doing it through his Parliamentary Secretary —introduces the regulations he has threatened to deal with trading stamps the better.

I put it on the record before and I do not mind putting it on the record again, that it was always my intention to outlaw trading stamps but we cannot get the present Minister to commit himself to that. I am waiting for the legislative measures to see what way it could be improved, to try to go as far as we can towards the outlawing of those stamps. I have no doubt that it must have figured in the contributions of witnesses at the hearing to which the report referred.

The Minister indicated that the Restrictive Practices Commission recommended that they should review these matters before the next extended period of prohibition expired and the Minister has accepted this recommendation. I am for this. I hope this review takes place as soon as possible. It should not be left over until the end of the extended period.

I have a clear recollection of sponsoring this Restrictive Practices Bill through this House three years ago when my opposite number at that time, Deputy Donegan, said quite clearly and categorically that he fully accepted and supported the measure. His only fear, which I shared, was that some companies were rushing to beat the order. There was the problem that while the order is made it is not law until the Bill is passed. I made the order, I think, on the 15th June. The Bill had not gone to the Seanad by the 15th July, but it did very shortly after that.

I have a feeling, and so do other Deputies on this side of the House, that there was a rush to beat the order. Deputy Donegan spoke about this in relation to a couple of incidents. That order, technically, would have expired on the 14th June this year. I will be asking the Parliamentary Secretary on Committee Stage to try to clear up some little detailed points for me because as Minister I found myself in difficulties in this regard exactly three years ago.

This order was made on the 17th June by date three years and two days later than the previous order. We now have the Confirmation Bill. I wonder if the Minister for Industry and Commerce is leaving it too late to make this continuance order, or has he opened an escape hatch for some of the companies in this regard? Two or three days a week or a month is hardly sufficient time to allow something to be slipped across the Department of Industry and Commerce.

I remember giving an assurance in this House to Deputy Donegan, and Deputy Esmonde (Senior), that companies which had not, within a month of my making the order on the 15th June—and that month was considered to expire on the 13th July—their petrol station finished to ground level could not go ahead. I made that statement in this House, fully believing that it was correct. I am not too sure of this now and I would like the Parliamentary Secretary to clear it up for me. My understanding was that certain stations finished and were given permission for finishing subsequent to that date. I want to say categorically, that as the then Minister for Industry and Commerce, if it did happen, it was without any consultation with me.

There are a number of points which have been referred to, specifically the extension from one to three miles. The Parliamentary Secretary says that the commission report stated that a number of oil companies were critical of the one mile limit for the replacement of company-owned stations which were closed in circumstances defined in the original order. The companies asked for an extended limit, I presume with a view to being able to erect a replacement station anywhere for the one that was being closed or taken over by a local authority.

It would be very wrong to specifically oppose the Bill on the basis of this extension. We have no intention of doing that. In my view, petrol companies have not been placed at any serious disadvantage in relation to the by-passing of roads or to the local authority taking over or closing a road. The one mile limit is sufficient for them to find an alternative. It should not have been necessary to make the amendment. Even if the Restrictive Practices Commission recommended it, the Minister need not have made the necessary amendment and built it into the order.

This is the type of Bill where niggling things can be teased out easier at Committee Stage. I will have other observations to make at Committee Stage. Naturally we favour the measure but I would prefer if the restrictions built into the original order three years ago had been maintained. I disagree with the extension from one mile to three miles, but in view of the fact that there is not legally any way in which an amendment can be made to the order, we are in favour of the continuation of this order.

Mr. Power

I would like to commend the Minister for extending the scope of this order for a further three years and also to commend the previous speaker who in his capacity as Minister at that time, found it necessary to introduce this order. Normally speaking, I might not become aware of an order such as this, because I have very little to do with petrol sales and distribution other than to buy it, but I became very conscious of it, from a specific case within my own area which I hope to mention. I would like to commend both the Minister and the ex-Minister for this and feel that there is a need for it. The reasons that prompted the previous Minister to introduce legislation like this still hold good today.

While the need might not now be as great, the proliferation of new petrol outlets is unlikely with the climate in the motor industry and in the oil situation today. It is necessary to ensure that these matters will be tightened up and that there will be no danger that multi-national oil companies will take advantage of any let up on our part here and have a monopoly of oil distribution. I realise that the Minister has been in consultation with the Irish motor industry and I am informed that they have given him a very comprehensive report and that he has acted on it.

The need for this order is to prevent a few oil companies operating in Ireland from reaching a situation where they can, by putting on different types of pressure which they have at their disposal, oust ordinary people from distribution and monopolise it. In many ways at the moment we have a monopoly in the grocery trade, and while this may be good and while some of the benefits of cut-prices may be passed on to the consumer, I feel confident that the few firms involved in the oil trade would be much more likely to meet one another's wishes rather than to endeavour to under cut one another and in that way provide keener prices for the consumer.

There were three exceptions to the Prohibition Order of 18th June, 1975. The Minister said: "The first exception was a transitional one applying to certain retail stations which were under construction when the 1972 order was made." The particular station I had in mind which was under construction at that time— there were only two of them in Ireland; the Minister for Defence will be aware of the other—was a station in Droichead Nua which had originally been refused planning permission by the county council. It was appealed to the Minister and refused. There were 35 objectors in the locality. A subsequent quietly inserted application to the county council was passed and permission was granted for this station on a new road near a very dangerous junction as you leave Droichead Nua. This station was not completed at the deadline date. I visited the site at that date and I am aware that photographic evidence exists to show that it was not completed to ground level. This was forwarded to the Minister's Department.

I believe that if sewers had not been filled and completely laid, and if the ground level had not been brought up to the level of the pumps, and if the area had not been "tarmaced", that site would not have been completed to ground level. Even though a rush had been made to meet the deadline, the deadline had not been met. This outlet was not completed in time and lay there for quite a long time in an unfinished state. Eventually, not long ago, it opened up under a private name. I wish to ask the Parliamentary Secretary if he has within the Department machinery to prevent some front man from acting on a company's behalf. This can be done and may well have been done in this case.

I hope the extension of this order will ensure that people will not be allowed to act in this manner. It could well be that this man is genuine. It could well be proved that he is only a front man for the company. It was noticed by other suppliers in the area that, during the time of the petrol shortage, this man had plenty of petrol for all and sundry and did not abide by the hours other petrol suppliers decided on in the hope that they would meet the requirements of the area, and try not to disappoint their customers. He played a lone hand. Possibly he reaped the fruit of that by gaining more customers later on. Two petrol filling stations within 200 yards of this station have since closed down and this one is flourishing.

Sales by independent outlets have continued to increase and company-owned outlets' sales have decreased during 1974. That was the purpose of the order and I am glad to see it accomplished its purpose. Perhaps the Parliamentary Secretary would assure us that the open hatch referred to by Deputy Lalor by allowing this order to run for three years and two days will not allow people to take advantage of this and to open up outlets in contravention of our wishes.

It is most unlikely, as the Parliamentary Secretary has said, that there will be a big rush towards opening up new outlets for retail sales at the moment. We realise that the motor trade in many areas is bad and we hope it will soon pick up. That would be no reason for opening the door for anyone, by not extending this period. The reason for the order is that individual Irish people engaged in this trade are protected. Protection is needed very badly against the multi-national oil companies. I feel dubious about the extension of the one-mile limit to three miles. It has been suggested that the limit should be increased or removed altogether. The final decision the Parliamentary Secretary has presented us with here is that the one-mile limit should be extended to three. It is regrettable that we are now faced with something on a take it or leave it basis, that if we do not accept the order, we cannot have it changed. I understand that is the position.

Mr. Bruton

That has been the procedure.

Mr. Power

It is a pity because I would have liked to discuss that at more length. We cannot have a change now. I realise that if a road is being changed or realigned a person who has an outlet at a geographically convenient place may find himself cut off and placed at a distinct disadvantage. If you confine it to within a mile of that you are bringing the sites down to a very small number. Possibly those who are approached in an effort to procure a site would up their prices accordingly. Maybe three miles would give a little more room to manoeuvre. I am not too keen on extending it because we have guidelines laid down already by the Minister for Local Government as to where petrol stations should be sited. It is generally accepted that they cannot be sited on the open road and that they should be sited on the outskirts of towns within a 30-mile limit.

We must bear in mind also that, in Ireland, we have more outlets for petrol per mile and per head of population than do other European countries. Like Deputy Lalor I feel that we could well have stated the limit and let those who have to seek renewal provide alternative stations and site themselves within that limit. I wonder what would have been the position had this matter been raised and witnesses given evidence to this effect in new suburbs or satellite towns. I have become aware, particularly in a town like Leixlip which has mushroomed in a few years, that the amount of outlets available there are not capable of dealing with the demand at all. Many motorists in Leixlip have to go elsewhere. Is there room for a new outlet—not a company owned one? This does not affect a new supplier in a private capacity, of which I am glad, so my worries are eliminated in that respect.

It has been mentioned that the order could have a counter effect to what was intended; that this order, when it would deter existing oil companies from providing further outlets, might also discourage the setting up of new retail chains here. They would be welcomed into the club, provided they provided competition. The Minister has taken the correct attitude, that the greater good is what will weigh. I feel that the greater good is the making of this order. Again, I regret that we must accept it in toto, that it cannot be changed but I suppose that is the nature of orders.

I should like confirmation from the Parliamentary Secretary that he has the power, within his Department, to ensure that when companies find themselves in a position that they cannot extend, they will not be able to use an agent or front-man to do their dirty work.

Mr. Moore

I want to offer some remarks on this matter and point out that page 5 of the Minister's brief inhibits one somewhat when one reads with a Bill of this kind that the order which it is proposed to concern may not be amended by the Oireachtas. It must be accepted or rejected.

While that may have been all right say three years ago regarding an order of this type the whole petrol supply scene has changed since then. I feel that the time is opportune for the Government to review the whole matter of distribution of petrol and oils. We realise, from the past year or so, how vital is the distribution of petrol to our people, never more so than during a recent strike when one had to traipse the city looking for petrol, when we saw also how vital services were affected.

That is just one aspect of the whole chain of events which we must ensure are safeguarded so that petrol supplies to people who need them will not be restricted in any way. Therefore, we must acknowledge generously that the system under which petrol stations are granted permission is the best.

Deputy Power mentioned one point which I regard as very serious indeed: are we sure that we have the proper machinery to ensure that the provisions of this order are being implemented? One does not need much imagination to see that it would be quite easy for people to get round this order. When Daniel O'Connell said he could drive a coach-and-four through any statute, it would be very easy today for a person to drive a very large limousine through this Order. The Government must review the whole matter, firstly, to acertain if the system we have at present is the best for ensuring the most equitable distribution of petrol to the people who need it; secondly, have we the machinery to ensure that even this order, if found to be defective, could be amended, in view of recent happenings in the oil world; thirdly, what happens when we extract oil from our own seas?

Supposing the company developing oil resources wants to set up new stations, can they do so, or are they restricted under this order? The Government might have foreseen that happening. Very shortly we hope we will be extracting from our own seas oil, gas and so on. Therefore, a new picture emerges here and we shall have to make provision for the new companies which will be formed. One could foresee great competition, even prejudice, against the new oil from our seas, that some old-established people might resent such new competition. There is a whole new phase here. The Government should review this matter very shortly and make provision for the sale of native petrol, if I may call it such, that is, petrol taken from our seas. As far as I can see it would not be covered under this order. There might well be refusal of a licence to a new oil company to set up filling stations because they did not exist when the order was first passed by the Oireachtas.

The Parliamentary Secretary might well convey to the Government Members' anxiety on the up-dating of legislation regarding the distribution and sale of petrol, and make special provisions for their sale and distribution.

Mr. Callanan

Just a few brief remarks on this order. I regret it is an order which cannot be amended. I welcome it. I support the case made by Deputy Moore about a complete new look, in view of the fact that we have oil off our shores and other companies may come along. A new look is needed at the whole question of distribution of oil. It is important also to curtail oil companies' activities as far as the setting up of stations in competition with private people who have been in the petrol business for a long time is concerned. During the petrol scarcity I had occasion at least twice to go to the Minister with regard to companies refusing to supply the quota they should have been giving to private people with their own pumps. The only way you could get petrol was at the stations which were owned by the petrol companies. We know they supplied in some cases double the amount of petrol which they usually gave out. Therefore, it has been proved, beyond doubt, that if they were giving the required quotas to the people who had the private pumps they could not have all this petrol. The queues were nearly half-a-mile long outside all their stations. It was felt that these companies were supplying the petrol to their own stations at the expense of the people who owned private pumps.

There were also companies during the past few years who warned people with smaller tanks they would not supply them. I would like the Order to ensure that in the case of people who are in the business and provide a good service, even though their tanks may not be all that large, the companies will continue to supply them. This is of vital importance. If the multi-national oil companies are allowed to take over the distribution of petrol in the country and set up petrol stations everywhere, it will be to the detriment of the people who have been in the business.

I had complaints during the petrol crisis that the private individual did not get a fair deal. This was proved beyond yea or nay. I hope the order will ensure that nothing like this will happen again.

Deputy Moore is right about a new look. In the past we had no hope of any oil being found off our shores. Let us hope there is, and that new companies will be formed and that this will not be a closed shop. This order is very necessary and I welcome it. I hope that if a crisis occurs again that under this order people in the business outside of the companies will get a fair deal, which I believe they did not get the last time.

Mr. G. Fitzgerald

Tá beagán le rá agam i dtaobh an Bhille seo. I wish to pay tribute to the Minister's predecessor in office for seeking the extension of the 1972 order. It is significant that since his departure no further step forward has been made in this direction. While I welcome the extension of this order as achieving something in relation to the retail petrol situation I cannot be convinced of the reasons why the limit is being extended from one mile to three. I hope the Parliamentary Secretary will spell out in detail why this is necessary. I do not see the need for it. If it were open to us to do so I would propose an amendment to that.

There are many problems facing the people that we should have primary concern for. These are the independent retailers. Whether we have a Restrictive Practices Order or a prevention of restrictive practices or whatever we might term it, no matter how many of these we have, these independent outlets are, to a large extent, in the hands of the multi-national oil companies. There are schemes which will cost them a certain amount of money, schemes they are compelled to involve themselves in. They are for the most part independents who are trying to earn a livelihood with one or two employees or maybe family operations. Some more of them are combined with grocery shops, spirit stores and so on. These people, whether or not they like it, whether or not it is economically advisable for them to do so, are compelled by the companies—if they refuse to comply there are many means that can be used to get them to do so—to toe the line to the companies' needs.

I ask the Parliamentary Secretary why no further legislation or orders have been introduced in regard to trading stamps? In my opinion the franchise of the trading stamps is being operated in a discriminating way, certainly one that needs closer examination. I understood the Minister for Industry and Commerce promised the introduction of legislation to effectively control the abuses that are being perpetuated by what I would describe as discriminating practices in the issue of trading stamps. Trading stamps are desirable from a public point of view. They are very desirable in many fields. In many country towns there is a company-owned outlet in a position to avail of these trading stamps at expense to himself admittedly, but normally to the detriment of his competitor who, because of the franchise system as it works, cannot, even if he so wishes, get those trading stamps. There are controls that the companies have been imposing on the independent outlets regarding trading hours. It is significant that in the May issue of the National Prices Commission this whole subject was gone into in great detail. The most significant point made on it was that retail sales for petrol were expected to be the same for 1975 as they had been for 1974. This means that it is a business that is stagnant. I ask why? At the entrance to Cork city there are three stations within a few hundred yards of each other, all company owned, and I notice another one being erected, again company owned. That is four within a few hundred yards. How does that station come within the scope of the present restrictions?

Mr. Bruton

If the Deputy will give me details of that I will have it examined.

Mr. G. Fitzgerald

I certainly will. I will give the details and the name of the company.

Mr. Bruton

That is fair enough.

Mr. G. Fitzgerald

The hours of opening of that service which is being provided by the independents is another important matter. It is the livelihood of these people. They are trying to cater for their own local areas, whether they be urban or rural, in a reasonable sort of way. The companies demanded that they stay open for longer hours. They kept their own stations open for longer hours, thus imposing additional hardships on them. According to the National Prices Commission Report No. 39, April, 1975, the table on page 123, shows that there are 106 wholesale stations with a company manager in them. There are 387 with tenants, that is a total of approximately 490 stations. They are catering for 35 per cent of the nation's business. They are only 11 per cent of the total number of stations. On the other hand, there are 89 per cent owned by independents, 3,841 catering for 65 per cent. Obviously, the cream of this business is that operated through the wholesaler or through their tenants. The independents in various areas by location, by size of enterprise, by effort made are catering for a far less throughout on an individual or an average basis within their own outlets. This is why the independents deserve to be looked after to a greater extent. The Parliamentary Secretary and his Department are not taking steps fast enough. They are merely doing what was done by Deputy Lalor in 1972 and the need was there then. The reason why so many independent outlets closed in 1974 is an economic one. If we accept the situation I have outlined, that there is no increase this year, we will have a similar situation arising. I would go further and say that the multi-national companies need to be protected against themselves, but certainly against the measures they can take against the independents because they are completely in their hands.

I cannot understand why the three-mile extension has been given instead of the one mile. If we are to endeavour to give a decent livelihood to these independents and make it worth their while to provide the service they are providing for the community more stringent measures should be taken to ensure this. We have had a recent merger or take-over by one of the multi-nationals in the Cork area and as a result a distribution company was deprived of its supplies by the new multi-national company taking over. Ten or 12 jobs were put in jeopardy and would still be in jeopardy but for the actions of the parent company to that distribution company, even at a loss, to keep the operation going.

There are implications behind what I am saying, and I cannot spell them out as clearly in the House as I would like to, but I would be critical of the Minister and his Parliamentary Secretary if they could not ensure control in those situations.

Mr. Bruton

Company owned?

Mr. G. Fitzgerald

I am talking about a distribution company. Details are already in the Parliamentary Secretary's Department. I am talking about a distribution company deprived of its supplies because of a take-over of an oil company by one of the multinationals. Because the distribution company's parent company was a contributor elsewhere——

Mr. Esmonde

Was there no previous contract that established what the relationships were between the distributing company and the parent company?

Mr. G. Fitzgerald

For Deputy Esmonde's information the details are with the Department of Industry and Commerce. There was a promise before the take-over or the merger that supplies would be maintained but this was not done for other reasons. Admittedly, it was a hit-back by the multi-nationals. I am trying to point out the power that these people can and will wield in order to achieve a hit-back at a company who may be doing them harm in other areas.

We must accept that it is one of the problems we have with our multi-national companies. It is working against competitiveness. I have had a lot of experience in dealing, from that side of the fence with oil companies. I can tell the House that if one had a worth-while contract for substantial gallonage there is no fear of the price one has from that company being beaten by any other company.

If we take it that 89 per cent of the independents, or 3,841 stations, are depending on 65 per cent of the petrol sold, it points to these people having difficulties. In my opinion the oil companies are trying to expand and control as much as they can of the retail outlets as well. The Minister, and his Parliamentary Secretary, have an obligation not only to extend what was introduced by Deputy Lalor in 1972 but to go further to control the situation.

Parliamentary Secretary to the Minister for Industry and Commerce (Mr. Bruton)

I should like to thank the House for the welcome given to this legislation. As expected, it is not a partisan measure and it was treated as such. To put the matter in perspective, in 1973, 86 million gallons of petrol were distributed through company-owned stations, and in 1974 that was down to 81 million gallons, roughly—I am quoting from the report of the Restrictive Practices Commission. The equivalent figures for independent dealers is 140 million gallons in 1973, and 147 million gallons in 1974. There has been a concrete rise in the dealer distribution and a decline in company-owned station distribution volume. I can assure the House that the examiner of restrictive practices will keep a careful eye on the developments over the coming year or so. It would seem that the trend disclosed there is being reversed. Action can be taken at any time and the figures will be available to substantiate action.

Deputies Lalor, Fitzgerald and others referred to the extension of the permission to replace company-owned stations within a three-mile limit of a station which was closed due to compulsory acquisition or road widening. I should like to stress that it is necessary for that station to be closed before this allowance comes into being. It is not a question of allowing them another station within three miles of the existing station. The other station must be closed before that can happen. Deputies will realise that the strictures of the planning laws in relation to petrol stations can be such which require certain matters in relation to visibility on either side from a road point of view. It might not be possible for a company to obtain a suitable site within the strict mile of where the other station was closed, particularly if the other station was closed by virtue of certain road-widening arrangements. Therefore, it is equitable to allow this change to the three-mile limit. The three-mile limit was recommended to me by the Restrictive Practices Commission; it was not an issue of the Minister. Needless to say the operation of a three-mile limit as against the one-mile limit will fall within the ambit of the review of the new order which will take place.

Mr. G. Fitzgerald

Is it not true that in fact this could accommodate the type of thing I mentioned about Cork, of a fourth company station——

Mr. Bruton

We will be coming to a Committee Stage discussion, and perhaps the Deputy would like to put a question to me then. If the Deputy gives me the precise details of this fourth company-owned station he referred to I will have it investigated.

It is always open to people who have a fear about the application of this order to refer it either to me or direct to the examiner for restrictive practices who will have the matter investigated very quickly. We have an efficient system in this respect which I think we all can be pleased with.

Deputy Power raised the question of front men operating in such a way as to allow separate company-owned control of the station while technically complying with the provisions of the order. I would refer him, in this respect, to article 4 of the existing order which defines this question very precisely and I think he will find that the definition there is very comprehensive and should cover most situations. It is the words on the paper which constitute the law of the land and stand to be interpreted by the courts. I could read the definition but I think it would be so long and laborious that it would be unnecessary but if the Deputy is unhappy with the wording of the order in any respect I will gladly look at it again.

Deputies Lalor and Power raised the question of the treatment of managers of company-owned stations by the companies themselves. This does not come within the terms of this order. But this general question is being examined very actively in the Department at present and if it appears appropriate I can ask the examiner of restrictive practices to look into the matter. I think Deputy Power is satisfied with the situation in the sense that an independent retailer could open up.

Deputy Lalor asked that the review of the operation of this order which encompassed matters other than the strict question of company-owned stations, such as the effective increase in cost, petrol outlets, the effect of various types of agreements and the significance of promotional schemes and hours of trading should take place right away. I am well disposed towards that suggestion and I will see if it is possible to have the Restrictive Practices Commission look at those matters rather sooner than the final date before the expiry of the order now being approved by the House.

In relation to trading stamps Deputies are aware it has been decided to introduce secondary legislation to control this practice in the advent of consumer protection legislation. I think we in the House will have an opportunity of debating that matter therefore in greater detail on another occasion.

Mr. Lalor

When?

Mr. Bruton

I listened with sympathy to the points made by the Deputies on the other side of the House and if, as I said to Deputy Fitzgerald, they have specific problems, I would be glad to have them examined by my officials and, if necessary subsequently by the examiner of restrictive practices. However, I would say that while the interests of independent retailers are of great importance in themselves and also of great benefit to the consumer because they ensure competition between independent retailers and company-owned directors, in the final analysis there is, of course, the interests of the consumer which must be paramount and the House in general must look at that aspect of the matter as well to ensure that any constraints introduced which may be justified should not in any way deleteriously affect the interests of the petrol consumer. This, of course, is a consideration which I will have to take into account in dealing with representations which may be made to me. I thank the House for the generous welcome which they have given to the first Bill which I have had the pleasure of introducing.

Agreed to take remaining Stages today.

Dáil Éireann debate - Wednesday, 2 Jul 1975

Restrictive Practices (Confirmation of Order) Bill, 1975: Second Stage.

Dáil Éireann debate -
Wednesday, 2 Jul 1975