Ceisteanna—Questions. Oral Answers. - Cross-Border Price Difference.


asked the Minister for Industry and Commerce if he is aware that shopkeepers in County Donegal, particularly those near the Border, are embarrassed by having to charge considerably more for goods of Irish manufacture, such as biscuits, than the same goods are costing in retail shops on the other side of the Border; and if he will make a statement on this anomaly.

I am aware that certain Irish manufactured goods such as biscuits are cheaper in Northern Ireland than in Donegal. The UK is a net importer of agricultural goods and traditionally has operated a policy aimed at keeping prices for agricultural goods as low as possible. The corollary is that manufacturers of foodstuffs such as biscuits in the UK have cheaper raw materials available to them and their output can accordingly be produced and sold more cheaply than comparable products here. When Irish manufacturers compete in the Northern Ireland market with such goods they can do so only because of the benefit of export rebates, including EEC compensatory amounts which are not available to them in respect of home market sales. In the specific case of biscuit prices mentioned by the Deputy, a further relevant factor is the difference between indirect taxation here and in the UK and Northern Ireland.

Was the National Prices Commission asked to investigate how certain firms can sell cheaper to Northern Ireland than to our wholesalers or retailers?

I have instituted inquiries by the National Prices Commission in general in relation to different movements in the consumer price index in Ireland by comparison with the retail price index in Britain. I believe that the circumstances in the biscuit market are fairly explicable in terms of factors of which we are already aware.

Is the Parliamentary Secretary aware of the difficulties for retailers to maintain business on the Donegal side of the Border when people can go across the Border and purchase goods in the North at a cheaper rate up to a limit of £52?

I realise this poses a problem for retailers.

Has the Parliamentary Secretary any proposals to deal with this situation in the context of the overall inflationary situation which is sending prices up almost daily? Is any effort being made to tackle the problem?

The situation here is one of comparison between the price of biscuits in Northern Ireland and the price of biscuits here and there are special circumstances at work there. Firstly, there is the position in relation to the rate of indirect taxation applied to biscuits in the Republic as against the rate of indirect taxation applied to biscuits in Northern Ireland. There is also the fact that biscuits exported from the Republic to Northern Ireland attract in respect of income derived therefrom export tax relief. In addition, there is further the arrangement in relation to accession compensatory amounts which are payable on exports of biscuits to Northern Ireland from which biscuits produced here and marketed on the Irish market do not benefit. These are identifiable factors which are not related to specifically inflationary matters but rather to fiscal policy here and in the Community at large.

Would the Parliamentary Secretary suggest to the manufacturers of biscuits that special offers on their products be introduced in Border areas to help the position? There is a difference of about 10p in the price of Dublin biscuits sold in the North and those sold on this side of the Border. If there was a special offer of 5p off on this side it would help the sales of those biscuits.

I do not think it would be a matter for me to make a suggestion of that nature but I am sure the manufacturers of biscuits will read the Official Report and see the Deputy's suggestion.

Since the question relates to commodities other than biscuits manufactured in this part of the country, is the Parliamentary Secretary aware that one can legally buy a bottle of whiskey £1 cheaper in a town north of the Border than one can in a town south of the Border?

I do not as a rule travel across the Border to purchase alcohol so I have no personal awareness of the matter. I am aware that there are variations in prices.

It is far beyond a joke. Does the Parliamentary Secretary appreciate the embarrassing position traders running a business close to the Border find themselves in?

I am well aware of the problems created, particularly by the situation in relation to monetary compensatory amounts and accession compensatory amounts.

It has nothing to do with those things.

It is also due to the fact that the United Kingdom Government secured a different rate of devaluation in this context than we did. As the House is aware, the Government are making strenuous efforts to change the situation.

Would the Parliamentary Secretary indicate in what way he relates monetary compensatory amounts to whiskey and biscuits?

Accession compensatory amounts apply to biscuits. Monetary compensatory amounts apply to the ingredients used in the manufacture of biscuits; flour is used in the manufacture of them.

Does it not apply mainly to agricultural exports?