As is the case with regard to so many things that this Government do, they have not really sought to get to the nub of the business at all. They have not moved far enough this time either in dealing with the thresholds as outlined in the 1978 Act. It took long enough to get that Act on the Statute Book in the first instance, seeing that it was considered by a Coalition Government in 1974 and had to be withdrawn some years later, never having completed its Committee Stage. It was then introduced in 1978. It is a pity that some of the matters indicated at that time in so far as thresholds were concerned could not have been taken on board even at this late stage. There should be no obstacle placed on desirable mergers which will help to maintain and expand employment in industry. That is what it is all about. We must not do things which are, or might be, restrictive in so far as ordinary development of employment in industry is concerned.
The situation is different from what it was in the early seventies in so far as this type of legislation is concerned. We must take into consideration that we are now a full member of the EC and this legislation was initially considered immediately after our accession to that body. There are different attitudes now towards the free movement of goods, of capital and of labour. The industry of this country is under quite severe competitive pressure from imports from foreign companies which have no base here. The Minister should have considered that when contemplating a movement in the thresholds in section 2. The numbers of cases referred to the Examiner, or to the Minister and subsequently to the Examiner of Restrictive Practices, have grown, but the delay factors have not been considered at all by the Minister. If amending the legislation, and that is in effect what the Minister has done, whether by order or by amendment in the House, the Minister might have considered bringing in a short Bill whereby the decision period would have been substantially reduced from that in the legislation to about three months from date of notification. He should have taken note of the position which applies in other jurisdictions, now that we are a fully fledged member of the EC. That is the market about which we are talking. That has not been reflected in the Minister's attitude and it is regretted that he did not do a more sizeable job, seeing that he tinkered with the legislation. He might have taken on board a practice that exists in Germany whereby after date of notification a decision on the application is available to the promoters inside one month. We shall not speculate on how long it might take in this country, but certainly it is disadvantageous to people seeking an early decision in so far as proposed mergers are concerned. I would have thought that the Minister might have gone that far.
On the question of monopoly, that monopoly is coming direct from foreign suppliers. There is no restriction whatsoever on the Irish market in so far as industries supplying into this market are concerned. Here we are talking in grandiose terms about restrictions on monopolies and mergers when we should be talking about the situation obtaining here at present, that if a foreign-based company, with no establishment base here, are introducing a product here there is no restriction at all on them whether they be supplying 1 per cent, 50 per cent or the whole of the market. The native company is not on a par at all with its counterpart in other EC states. One week we are here introducing legislation resulting from an EC directive and the next week we are imposing restrictions which are incompatible with the situation which obtains now in so far as our participation in the EC is concerned.
One might take the example of the supply of food into this country where upwards of £800 million of food is imported here. There was talk of that in Private Members' time. A considerable proportion of the sale of that food in the retail sector is controlled by a very small number of multinationals that are not Irish-owned, they are foreign-based. The three major ones between them have in excess of 55 per cent of the total retail sales of food here at present. One of the companies involved has a turnover in the United Kingdom of £3 billion. That company has a market share here of 10 per cent. But what is that in relation to its overall operation? If one were to apply mergers and monopolies legislation to that situation, these people would not be allowed to operate in this economy at all. We now have a situation in which 80 per cent of the food trade in our capital city is controlled by these three or four multinationals, the majority being foreign-based, foreign controlled, who do the vast majority of their purchasing outside this State. The Minister might have considered the pressure these multinationals are putting on our suppliers, native industries, who find themselves at the begging bowl when it comes to dealing in the share of market controlled by these multinationals. Yet the Minister seeks to put restrictions on the Irish company trying to survive here, introducing threshold increases that are laughable, to say the least.
The Minister referred to the number of applications notified to him and the increase therein over the past year or two. But there is no talk whatever about the number of applications notified to him and how many were reported on by the Examiner of Restrictive Practices. I should have thought the Minister might have taken the report of the Restrictive Practices Commission of last year and given us a treatise on how this legislation was actually operating in the national interest. Companies with 50 per cent of the Irish market in internationally traded goods can hardly be termed to be monopolies.
Irish industry manufactures less than 1 per cent of the total industrial output of the EC. And we are here talking about thresholds of £10 million turnover and £5 million assets when Irish industry has such a minimal share in the overall industrial market of the EC. Direct imports, accounting for 50 per cent of the Irish market, cannot be controlled. The Minister cannot persuade me that this legislation is effective in controlling foreign-based companies selling directly into this economy and supplying 80 per cent of the market in certain items. There is no control at all unless such companies have an establishment base here. They are not now doing so; why would they? This is restrictive control specifically on Irish industrial output and contrary to the spirit we thought would exist following our entry into the EC.
Much of the turnover of companies trading in Ireland includes trade outside the European Community as well as within it. Therefore, when the Minister talks about companies here with a turnover of something like £10 million, one must ask: how much of that £10 million is sold into the home market? A lot of that turnover will be sold in Third World or EC countries. Here there is a restriction being put on the home market base when we should be talking about the EC market and what percentage they would have of that market, if we are to talk of freedom of establishment and freedom of services rendering the whole system a European one. Here we are slavishly following criteria that apply in a restrictive way to Irish industry. Using the turnover yardstick is a very simplistic way of doing it, but it gives little indication of market power, particularly for multi-product undertakings. Using that yardstick it has no relevance at all. In view of the outturn taking place over the past few years, I should have thought we might have realised that, that we might have moved away from that base in ascertaining whether mergers and monopolies legislation should use as its base the question of turnover at all, particularly in the case of the multi-product undertakings.
The limits as now envisaged by the Minister are demonstrably too low. They were too low in 1978. That was pointed out then by interested parties, by concerned people in industry here. There was not an open mind on it at that time; but, seeing the outturn that has taken place, one might have expected a greater degree of entitlement as far as the thresholds were concerned. The Minister says there might be up to 500 firms affected by this resolution. I should like to think that there might very well be up to 1,000 companies that would come within the limits now specified by the Minister. The figures relate to small companies with less than 100 employees. The spirit of that 1974 drift-on-to-1978 legislation was never intended to be applied to the small and medium-sized industries.
The Minister had an opportunity to depart from that now, but he did not take it on board. He is still confining it to the small company. That is a burden that could easily have been lifted by the Minister in a generous way at this time. When the Minister talks of £10 million turnover, I would put it to him that a small supermarket in his own town would have a turnover per annum in excess of that figure. I made an inquiry today as to the turnover of a supermarket in my town and I learned that last year it was a staggering figure of £14 million — one shop in a town in the west. A turnover of £14 million represents a lot of loot. But it is an indication of the amount of money we are now talking about as against that in 1974 when these limits were devised, not in 1978. Taking modern capital flows, labour situations and so on into consideration I should have thought that a figure of £10 million would have been seen by the Minister at this time as too small. If we are talking about a dominant position in so far as companies that might be involved in mergers are concerned, then we should be talking about much larger amounts of money. If we are to consider manufactured products alone we should be concerned only with the creation of dominant positions on the Irish market in the provision of goods and services which are sheltered from international competition.
International competition constitutes the critical point. If the Minister says to me that companies with a turnover of £15 million, £20 million or £30 million were insulated against input from international industries, then I would say he has a point. There is no cover whatsoever against foreign-based industries selling directly into Ireland and putting Irish industries at a disadvantage. Arguably it is not a major disadvantage and will not affect that many industries but that is not what legislation should be about. It should be seeking to free Irish industry from restrictions, not place any further burden on it. It is restrictive to think of any company's share in the Irish market being brought into line by this type of legislation.
The Minister's approach is very narrow and does not take into account the reality of our being members of the EC market. It should be looked at in the global sense. There are German and French companies which are much larger than our biggest Irish concerns and it is against their products that Irish industry is competing both at home and abroad. They have no restriction in selling into this market or other markets since their legislation is much freer then ours. We are trying to compete against them while at the same time restricting companies from merging to provide better administrative arrangements to compete not just on the international market but also on the home market. Irish legislation cannot control direct sales by firms outside the State on the Irish market if the firm do not have an established base here. Certainly none of these large conglomerates will be setting up Irish-based companies following last week's introduction of legislation in relation to the Fourth Directive. That has made it final and forever that no multinational or major company will consider taking limited status liability. They will be coming here as subsidiaries of EC-based companies. They will be coming as branches and taking unlimited status and limited partnerships in the German sense. The whole range of options will be open to them. All this is by way of being good Europeans and doing everything requested and demanded by Europe. I have yet to see the quid pro quo in so far as the protection of Irish industry is concerned from that quarter.
