Dáil Éireann debate -
Thursday, 29 Oct 1987

Vol. 374 No. 8

Restrictive Practices (Confirmation of Order) Bill, 1987: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Sheehan

I hope the Bill will safeguard the consumer against manipulation by international combinations of chain stores. I also hope that suppliers will not be under extreme pressure from dominant buyers. It is clear evidence that two multiple superstores in this country control half the Irish food market. Equally serious, each one of the two multiples owe Irish suppliers an estimated £60 million at any given time. This is alarming information when one considers the serious implications it could have on the future of those suppliers if anything went wrong. For instance, one can imagine the serious situation that would arise if there was a collapse of that magnitude and the high unemployment that would be created.

While I would describe the sections of the Bill as modest by international standards, I am convinced that they will restore the competitive balance between the multiple and the independent grocery sectors. The Bill should safeguard the interests of indigenous manufacturers and suppliers to the Irish retail trade. Ultimately, therefore, the interests of the Irish consumers would be best served through the protection of employment in Ireland.

Far too often products that are sold below cost by these superstores in the Irish retail grocery trade are manufactured outside this country and are dumped here by companies who over produce in their own countries. The multiple chain stores that are incorporated in this gimmick often do not have to depend on the grocery trade. They have other interests such as drapery, hardware and so on. If they use, as it were, a sprat to catch a salmon, they do so only to lure in the customer and to make sure that when that customer leaves the grocery department he will go to the hardware department or the drapery department and buy goods which are probably as dear as in any other shop in that city or town. Some of those multiple organisations are taking advantage of the situation to lure in the customers by advocating these fancy offers to the detriment of the Irish manufacturer and worker. I am convinced that this Bill will go a long way to relieving the anomalies that exist and will be in the interests of the consumer. If we can cut out this business of below cost selling we will be taking a step in the right direction.

In the past four years I had the privilege of being a member of the Oireachtas Joint Committee on Small Businesses. A lot of valuable work was done by that committee in highlighting the serious injustices of below cost selling. In their submissions to the Minister they said that the planning authority should have regard to certain matters when giving permission for these superstores to be erected. They are as follows: (a) the need for the development taking into account cthe existing retail shopping outlets; (b) the suitability of the development as to size and location relative to existing retail shopping outlets; (c) the effect of the development on existing communities including in particular its effect on established retail shopping outlets and its effect on employment; (d) the quality and convenience of available retail shopping outlets; (e) the needs of the elderly, the infirm or disabled persons and of other persons dependent on the availability of local retail shopping outlets; (f) the need to combat urban decline and promote urban renewal and to promote the utilisation of infrastructural facilities in urban areas.

Finally, that committee believed that multiple stores do indeed have an unfair advantage in (a) obtaining from suppliers prices and credit terms that are in effect unsustainable and unfair to the producers and the manufacturers who deal with them and (b) can be punitive to Irish manufacturers. In the long term this is not in the public interest. The committee therefore recommended three modifications to the existing controls on retail trading and development. The first was to extend the existing order banning advertisements at below cost to include retail selling at below suppliers' net invoices plus VAT in accordance with the High Court ruling. Thus the necessary new legislation would make it an offence to retail goods at below cost as defined. The second was to legislate to the effect that no one retail group or multiple may control in excess of 25 per cent of the retail market.

As we already know it is clearly evident that two of the five supermegastores here already have well over 25 per cent of the retail market. This is outrageous. It is a situation that has been uncontrolled until now. The third was to amend the Irish local government planning and general policy directives to provide for the establishment of proper indices and ratio of square frontage per head of the population with suitable demographic biases. Included in this would be the qualifications of a stated number of outlets over and above the 5,000 square feet as part of the indices to ensure competition. These indices would be revised every five year as part of the local authority plan.

These are very sound suggestions. The general public will gain from this Bill. In May of this year Consumer Choice magazine proposed that the Government prohibit any further increase in market share of the retail grocery market by any multiple or distributor that currently holds 7 per cent or more of the market and after a reasonable interval require existing multiples or distributors who hold more than 7 per cent of the market to dispense with the excess. It said that it is extremely concerned at the concentration of buying power in the hands of a few megastore chiefs.

Finally I hope the Minister will insist that when this Bill is enacted it will be rigorously enforced. I do not want to see it watered down to the detriment of the consumers. The consumer, the supplier, the family grocer, butcher and baker must be given a chance to survive and the only way to do that is for the Minister to make sure that when the Bill becomes law it is enforced.

Mr. O'Donoghue

I would like to preface my remarks this afternoon by heartily congratulating the Minister on this innovative and brave measure. Suffice it to say that RGDATA described it as a gigantic step forward. It is brave because it takes on the major stores which were and are in danger of becoming monopolies. The Treaty of Rome at its inception recognised one of the great dangers to trade, monopolies. It is fair to say that a stage was being reached here whereby the grocery trade was becoming monopolised. Monopolies, of themselves, are inherently dangerous. They place power in the hands of the few to the detriment of the general public and the majority of the population. As of October 1986 Attwood Research gave the market shares nationally for the multiples as follows: Dunnes, 24 per cent; Quinnsworth, 25 per cent; H. Williams/Tesco, 6 per cent; Superquinn, 6 per cent and L & N/Roches, 4 per cent.

This totalled 65 per cent. As Deputy Sheehan correctly pointed out two buyers control half of the Irish food market and, equally serious, each owes Irish supplies an estimated £60 million at any one point in time. It is clear therefore that the 7,000 independent family grocers are under serious threat of extinction and this measure is, in my view, support for the smaller shopkeeper and his family who were and are in danger of extinction by these megastores because of the measures they undertook.

The great fallacy created by those firms which are becoming monopolies is that there is in some way a benefit to the consumer. The opposite is, in fact, the truth. A small number of items are sold below cost but the effect is spread around the store on different items leaving the consumer no better off than he was. The reality is that a selfish few decided to take it upon themselves, at the expense of the general public, to make a quick buck in the easiest possible manner by engaging in a certain amount of subterfuge. This was the extremely serious situation which the Minister had to face. It is in this context that he is to be greatly congratulated because he took on, and in this measure I believe beat, those large monopoly companies.

The Consumers' Association of Ireland support the measure. They propose a prohibition on an increase in the market share of the retail grocery trade. The fanciful notion that big is beautiful has been disputed at several levels besides the grocery trade, in different spheres and walks of life. The Consumers' Association greatly welcome the Bill and have stated that after a reasonable time interval they will urge that the existing multiples or distributors who hold more than 7 per cent of the market be asked to dispense with the excess.

Around Christmas time you see in every supermarket drink being sold at below cost price, or almost at cost price. Throughout the length and breadth of the country this has proved to be a tremendous burden on the licensed vintners and the licensed trade. One might say that this would benefit the consumer, but the reality is that the difference in price will be spread among the other goods in the store, leaving the consumer no better off and the local publican much worse off. There is a great deal to be said for the small individual in business. Over the years we have seen small businesses serve their communities tremendously well and in a very honest and open fashion where nobody was fooled or drawn in under a false impression. It is these people this Bill seeks to protect, and rightly so. These people were being driven out of business and that would be a tremendous blow to many families who rely on small businesses for survival.

I congratulate the Minister on his practical approach to what had become a major problem in the retail food trade. This is a £3 billion trade and there is sufficient for many, but the few decided they wished to take all. We should assist in maintaining the 40,000 jobs on the manufacturing side and the 35,000 jobs in the food retailing and wholesaling side. Again, I congratulate the Minister who, not for the first time in his career in politics, has led the way for those who depend on a middle income for a living and who will be eternally grateful to him, as will the consumers.

Mr. Cullen

I am delighted at last to get an opportunity to speak on this Bill, having waited patiently since 10.30 a.m. to do so. At the outset, I have great sympathy with what the Minister is trying to do in this Bill. His heart is in the right place, but I seriously question whether his head is going in tandem in the same direction.

I have worked in this specific area for the past seven years or so. I can bring in some practical knowledge on how the real world operates as opposed to many other speakers who are removed from reality. I have been used to dealing with multiples, independent grocers, small and large, wholesalers, the whole gamut. I was an employee of a supplier but am no longer working for them so I have no vested interest. I just hope to bring a few enlightened words into this debate.

The Minister is trying to get at two areas with this Bill. The objective is that it may ultimately benefit the consumer and, secondly, that it may create a fairer system for the independent grocer. There are grave question marks over whether the Bill will achieve those two objectives. If below cost selling were an isolated tool of marketing on its own and could be tackled in simple isolation, there might be possibilities of doing so, but I contend it is not an isolated tool but is very much interlinked with the whole structure of the grocery industry. It cannot be tackled simply on its own. There seems an impression abroad outside this House, and at times inside it, that "hello-money" means somebody running around with a suitcase full of money — you name your price and money passes hands. I suggest that in the main this is certainly not the case.

What we are talking about here is a whole range of areas in which suppliers and companies come to agreements which may be long term agreements — LTAs — or short term agreements STAs. These areas are interlinked into what ultimately will be the cost of the product to the retailer which, of course, in turn will dictate the price to the consumer. This varies tremendously in a free market such as ours because it is bound up in the ability of the buyer to purchase quantities which will enable him to lower his price ultimately. That is a fair and open market. Many speakers have suggested here today that this has been achieved in France, Germany and other countries. It may have but they are not working within the same parameters as we are.

The problem has been identified by everybody. In all the speeches to which I have listened nobody referred to below cost selling. Everybody referred to the monopoly of the multiples and these I contend are two separate matters. In actual fact, the multiples have a monopoly here whereas, as recently as in the past few weeks, when the largest supermarket chain in Germany wanted to expand and the Government found they had 8 per cent of the market they were told that that was enough. In those instances one would certainly be in a position to make the effect of below cost selling far more real, effective and tangible. In our situation where the figure has been bandied about of from 60 per cent to 80 per cent of the market being controlled by the multiples — it is certainly up in the high sixties — this is the real area of concern. If there is to be any long term benefit for the independent grocer, this is the area that must be tackled.

I will tell the House what I know is going to happen when the multiples are unable to sell below cost. Up to now they have been selling not a huge range of products below cost but the odd product at varying times throughout the year. In future, because they will not be allowed to do this they will put a vast range of products for sale at cost to the consumer with which the independent grocer will be unable to compete. Whereas up to now he might have had to contend with the individual below cost item, the multiples will see this as another way of taking on the independent grocer and further diminishing his role. That is a matter of serious concern and having spoken to a number of people in the trade I am quite satisfied that this is what they are going to do and that no benefit will accrue to the independent grocer.

As I have said, below cost selling is a tool of marketing which is linked to a number of other areas in the overall marketing strategy. We must remember that agreements which are drawn up between the multiples, the suppliers and the manufacturers can have a very stablising effect on companies. Nobody has referred today to the fact that such agreements can lead to job security in a market in which there is at present very little such security. If the retailers and the manufacturers can reach realistic long term agreements where each can gauge the quantities that are needed job security would be ensured and the companies involved would be able to reinvest their profits within their companies. They would know that they had a market for their products. Not alone would this lead to job security but the companies would be able to expand knowing what their cash flow would be. That is a very important aspect of business today, both in this country and throughout the world.

As I and other speakers have said, if we want to tackle this problem why not start by restricting the growth of the multiples even at this late hour? This Bill will have no effect in curbing the growth of the multiples and the multiples will be able to expand, to become more powerful and to dictate to the consumer what products will be available and at what price. The role of the independent grocer will continue to diminish. One of the key elements of marketing strategy which has not been mentioned is the question of the credit terms that are on offer. The days of a company buying a product at a certain price and selling it at a profit are long gone. Nowadays, the multiples are able to receive between 60 and 80 days credit while they are able to turn these products over in a short period of time. The money they receive by turning over these products quickly can be lodged in the bank where it will earn interest. That is one of the ways they make their profits. It is one of the key elements in the way suppliers, manufacturers and retailers operate and no independent grocer will ever be able to compete at that level because he will not have the buying power to receive the long term credit terms.

I am surprised that no one has made the point that the buyers for the multiples, just like everybody else in this walk of life, are fallible and do make mistakes. They may buy a certain line of product but, because of a sudden shift in the market, they may be unable to sell it. A large proportion of their funds may be tied up in that stock and as has happened in many companies they will have to sell that product at some price in order to get cash back into the company or the company may well go under. If the public, fickle as they are, change their desire for a particular product how are those companies who have made an error of judgment to shift a large quantity of that product at some price in order to get cash back into the company to enable them to reinvest in other areas? This will criminalise that area of business and may well have serious consequences for both large and small companies.

There seems to be an impression in this House that only the multiples sell at below cost. That is untrue. Independent grocers and wholesalers also sell below cost. The small shopkeeper at the end of the street also sells below cost. I accept that the scale will vary enormously but it is not a marketing tool exclusive to the multiples. It is used by many different trades, not just by the grocery trade.

One of the bones of contention in this area is that the multiples break down their turnover by agreement with the taxman into the various VAT bands. They get agreement in advance that so much of their turnover will be zero rated, so much will be at 10 per cent and so on. The Minister is well aware that this gives the multiples a fair degree of flexibility on products which have a high VAT rating. They are able to sell products which have a high VAT rating by loading them into the system at the lower rates of VAT. I am not saying that this is illegal but, again, the independent grocer is not able to compete at this level. Because his is a small business it is far more easy to define his turnover. Someone mentioned earlier that a multiple might have 4,000 products for sale. I can inform him that they could have up to 12,000 different products on sale. That is a fact as I know from experience in trying to computerise all of these products.

Can the Minister tell us what cost price we are talking about? Are we talking about the cost price which is available in Ireland, the cost price which is available on the Continent or the cost price which is available on spot markets? Where does the Minister draw the line? The small grocer may be able only to buy from the wholesaler up the road whereas the big buyer can buy in bulk on the spot markets at a reasonable price and at a price which is much lower than the independent grocer could ever hope to be able to buy it at. In this country the toy trade buy their products immediately after Christmas, in January, at the toy fairs around the world. In fact, many of these are now going direct to Taiwan to buy their products and in effect are bypassing the middleman.

Is that the cost price which is to be reflected in the Minister's order or is it to be an artificial cost price put together by the wholesaler? Many of the major buyers on the world market are going to be in very serious trouble if they cannot price their product at the cost they themselves have to pay for it. We may be an island but we are inexorably linked to Europe and indeed to the rest of the world, which is where there are the markets today for many of the products I have outlined.

Another factor arises in the legitimate area of paralleling in this country which is taking place in particular between Southern and Northern Ireland. There is a legitimate system of parallelling under which I can go to England or Northern Ireland, buy my product, less any duties — I mean the cost price less all of the taxes — and bring it into this country. Yet one may find that the same product on offer here will have a much higher base price than that obtaining, say, in Northern Ireland. One might well ask: which cost price will prevail? Will it be the cost net of all taxes in Northern Ireland or the cost, net of all taxes in the Republic of Ireland?

These questions are not being addressed by the provisions of this Bill. I do not want to sound as though I am anti-multiples, independent grocers or whoever; certainly I am not. What I want to see is a market operating in which the consumer and all participants get a fair deal. I know the provisions of this Bill set out to achieve that goal but I do not believe that, at the end of the day, they will do so.

There is another feeling throughout this House today, that the shopper somehow is incapable of being discerning, that every shopper in the country is incapable of deciding what is or is not good value. I dispute that assumption. While shoppers may not know a specific price at any given time the majority of people would know, within a reasonable range, whether a product was reasonable value for money or whether they were being ripped off. I do not believe that anybody going into a grocery shop, wholesaler or a multiple does not have some idea of the cost of the product range in which they are interested. The provisions of this Bill purport ultimately to protect the consumer. I prefer to describe them as shoppers rather than housewives because many men are shopping nowadays as well, so I will use that term.

Mr. Carey

It is a sensitive area.

Mr. Cullen

It is, particularly when one is a member of the Joint Committee on Women's Rights. But it is fair to say that I cannot really envisage — and I mean this in a genuine sense — where the benefit will arise for the consumer. I do not honestly believe there will be a huge benefit. There will be a huge downslide for the independent grocer. This Bill gives carte blanche, is giving the direction to the multiples to go in. It is saying: you cannot sell the odd product you used at below cost. This question really only comes to the fore at Christmas time. One must remember that there is a seasonal element in all of this we have not addressed at all, vitally important to manufacturers, suppliers and consumers alike. At certain times of the year the particular season will dictate the volume of goods of a particular type that will be sold on the market. The season that springs to mind immediately is Christmas. This seasonal aspect has huge effects on companies in terms of their financial projections, in terms of ascertaining their position after the season's rush: have goods, stocks been cleared? All of these elements are enormously important in the successful operations of many companies.

Again, under the provisions of this Bill, we will be penalising companies who may be stuck, many of whom are, both small and large, with products on hand at the end of a season occasioned by either their having been a bad buy or by a change in demand in the market place. These provisions will prevent them from unloading that stock onto the market, I might add, for the benefit of many consumers who could not afford to buy such products at the very high prices pertaining around Christmas time. I suggest that one could go into any store after Christmas and find toys and so on which had cost £40 and £50 in Christmas week selling for £16 and £19 the following week. I might add that many people in the poorer sectors are dependent on that end of the market. This is the real world about which I am speaking.

I cannot accept that the provisions of this Bill, of themselves, will have any benefit anywhere. That is my real concern. I genuinely want to support the Minister in this Bill. Hopefully he will be able to alleviate some of my worries when he is responding. As we are a small country with a small population I contend the Minister should address the real problem which is the size of the multiples here. That is the real problem leading to the hiccups and the total imbalance obtaining in the market place. I have had experience of a single manufacturer producing a given product who obtains a contract for that product, all of whose business may go directly to a particular multiple. At the end of the year that manufacturer may find — when the revision of his contract takes place — that the multiple is able to squeeze him very hard. Many companies have gone to the wall because of being unable to meet the new contract price demanded. That is inherently wrong, but below-cost selling will not abolish that. The only way in which one can deal with that problem and attain a fair proportion of the market is by addressing what I believe to be the real problem — which is what other countries have done — restrict the growth of the multiples. In so doing, in turn, such countries have allowed a freer, fairer market which not only benefits the multiples but the independent grocers and, at the end of the day, the consumer. That is the type of legislation needed if we are to tackle this problem seriously, and I admit it is not an easy one to tackle.

In the course of his introductory remarks today the Minister said that details of the supplementary terms negotiated with suppliers during the previous month will have to be reviewed on a regular basis. I can tell the Minister that the market place out there is war; the cake has got a lot smaller with companies competing with each other fighting desperately for survival within a very small segment of the market. Whether they like it or not at times throughout the year market forces dictate to them so that they must adjust their prices to the prevailing wind if they are to survive. That is how a free market operates. Part of that activity will be comprised of a changing price, different incentives, a promotion on television, a promotion within stores, tasting of a product. How do we legislate on below cost selling in all of those areas? I contend that we cannot. If that were to be the case the Minister would need a huge staff available twelve hours every day, 365 days a year, to deal with changing prices. Assuming that there are at any given time 12,000 products on offer in any of the multiple stores, and let us assume that 10 per cent of them change on a daily basis, that amounts to 1,200 changes per day. Some multiples buy products on a long term basis because of the deal they might get; some other products are bought on a weekly or even on a daily basis and the prices change accordingly. To cope with that amount of revision one would need a huge staff. I believe that to be impractical and cannot foresee how it would work.

There has been mention here today of the problems surrounding H. Williams. I do not believe that group went to the wall on account of below-cost selling only. It might have been one factor involved in the business of operating a multiple chain supermarket. One must remember that other companies have been extremely successful, have grown, survived, have been in a better financial position. Perhaps the operations of the H. Williams chain were not properly thought out in financial terms, in terms of the products they carried, presentation and so on. I believe all of those factors were involved in the collapse of that chain.

I do not think one can contend that below-cost selling and its control constitutes the answer to all of those problems. We have always been critical of ourselves as being poor at marketing, which is a fair criticism but ironically, one area where certain groups of people have proved to be world leaders is the multiples. There are fine companies in multiple business. Some of them, Tesco, for instance who are very experienced and one of the largest operators in the UK, failed in this country. Why? They were beaten by better people, Irish people, and I am proud to say that.

I heard today that all of these supermarket chains are multinationals. They are not, and that is a misnomer. I can think of only one that is a multinational. All the rest are totally in Irish hands and I am delighted that is so, that they are not in foreign hands. I am delighted also that they were equipped better than some of the multinationals. They understood early all of the marketing techniques required and those marketing techniques have led to the consumer, the shopper, getting an extremely good deal overall. You can pick out the isolated case and the isolated problem but the consumer has benefited greatly.

There is still a long road ahead and we must continue to address the various problems in this area. If people are really serious about doing something about the independent trader, this Bill on its own is not enough to do it. It may be a small start, I am willing to give the Minister his head on it, but I hope he will take on board at least some of the things I have said here today and will consider other areas where legislation may be necessary.

Mr. Carey

I congratulate the Minister on bringing in the Bill. He has adopted the role in the current Government of good news Minister. Since he took office he has on all occasions reminded the troops of the tremendous decisions the Fianna Fáil Government and the Fianna Fáil Party have taken since they were returned to power.

One of the major decisions was to introduce the Restrictive Practices Bill. Below-cost selling has received major attention in this House. The Joint Committee on Small Businesses and other groups have made representations and given their different points of view. A Deputy spoke here of the problems they experience in this area. Let me continue in Deputy Cullen's vein and say that in examining the consumer side of the problem it seems the multiples have performed very well in some areas where the population is fairly numerous and competition results in the Irish multiples giving fairly favourable price ranges to the consumer, whereas about 20 miles down the road another multiple has an monopoly and is extracting the maximum from the consumers, many of whom are not mobile and cannot go elsewhere to shop.

We have heard why the consumer should be protected. We forget about the service given by the small grocer in all villages and towns, particularly in a constituency like mine in County Clare. There small grocers have to contend with heavy groupings of multiples to the north in Galway and to the south in Limerick. At present a proposal that a second multiple should come to Ennis is being examined by An Bord Pleanála. The Chamber of Commerce saw fit to propose the establishment of this new multiple in Ennis. Deputy Cullen said that the Minister should tackle the spread of multiple business. The Department of the Environment and An Bord Plenála are to deal with the commercial proposal of this multiple. The Department of Industry and Commerce are expected to control restrictive practices and trading as they stand. I am a little confused about how both parties will protect in the long run the interests of the consumer which are wider than even those of the small grocers whom we all would love to see protected.

Where does this Bill lead us? As has been said, the Minister has his heart in the right place but, desirable as this measure is, how is it going to be policed? Surely we should start at the beginning. The Restrictive Practices Commission are so limited in their remit that we need to expand that area enormously. They expedited the grocery review which led to the Minister bringing forward this Bill. It would have been considerate of the Minister to publish the findings of the commission so that the House would have had all of this detail to help him steer his Bill through the Dáil. I am a little flabbergasted at this tactic——

Mr. Reynolds

It was not a tactic.

Mr. Carey

Nevertheless, other Deputies have asked the Minister to explain various matters, and as an obliging member of the Government I think he will prove to be forthcoming on this occasion as always.

The people who are to administer these provisions are in his ministry, the Department of Industry and Commerce and the Restrictive Practices Commission. Their scope is so limited that this Bill really is just a pious statement of terms which cannot be delivered. If the Minister when replying announces he is going to expand the RPC and put more inspectors on the road and that he has a formula to meet the problems that will arise in establishing basic costs, then we will be well on the way. However, I fear for the small grocers and the independent grocers in my area. The multiples muscled into small, seasonal matters like the production of the small fruit packet that was sold over the counter in the small grocers' and hucksters' shops in order to provide a kind of leader — the Minister is shaking his head.

Mr. Reynolds

Not at the Deputy, at somebody behind him.

Mr. Carey

In a small industry in Kilmihill in County Clare a number of jobs were lost because the multiples saw as an attractive advertising job the distribution of this fruit at a third of the cost the independent grocer had to pay for the raw material imported from the Mediterranean area.

The Minister needs to provide a greater policing system. He said today that the central theme of Government policy is to bring down costs on all fronts. That means that costs should come down in the west as well as in Dublin. If we do not restrict the multiples' share of the market the cost burden outside the grocery trade will rise because greater numbers of independent people who create a lot of employment will go to the wall. There will be losses in the west while the greater service and the greater marketing initiative are in the east.

I wish the Minister well and I hope this Bill will be effective. I would make the point that there has been a greater examination of this whole area by Members of this House than has been evident in the debate today.

Mr. Leonard

I welcome the introduction of this Bill. I wish to refer to the problems caused by the large multiple which was taken over by the receiver in recent times. The problem affects not only their workforce but some of the major suppliers. In my area there are two firms in the food processing field who have built up very efficient organisations, to the extent that they are a showpiece of industrial development. They were both primary producers in the poultry area and there has been a great diversification of products. They were in competition with many others and were called upon to give such concessions as extended credit, which the multiples have used to good effect. They have looked for their own terms and often secured them. Real problems have been created for these firms who now find that a substantial sum owing to them is not likely to be recovered. I would ask the Minister to consider this matter. Some years ago a similar problem was encountered by farmers supplying cattle to meat plants which went into liquidation. These farmers had to take their chance of recovering only a few shillings in the £.

In my constituency we also have the problem of the price differential across the Border. The Minister for Finance made a serious effort in his 1987 budget to redress the imbalance and almost discontinued the practice of travelling across the Border for such things as drink, groceries and petrol. However, people can still shop within a nine-mile corridor and this is causing serious problems for a number of towns in the Border region, particularly in Monaghan and Cavan. People in these counties did not benefit from the Minister's measures. While coach loads of trippers were strongly discouraged, the measures made no difference to the person driving a car who could cross the Border and do his shopping because he was within a nine-mile radius. I do not know what the Minister can do in this situation.

The region has been devastated during the past few years. The complete trading structure has been damaged and is now in shreds. Many garages have closed. In Clones there is only one petrol pump remaining and it too would be closed but for the fact that it is used by the Garda and by post office personnel. Just across the Border there has been expenditure of well over £500,000 within the past two years in erecting filling stations and grocery outlets. I discussed the problem with the Minister and he came up with the bright idea which was contained in his budget. In general it is very effective but this is one area where it has failed.

The recent failure of H. Williams must raise serious questions, not only for the suppliers but for the financial institutions who allowed this over expenditure. We heard that this firm failed because of competition from another multiple, but it is very hard to accept that because a firm does not fail overnight. The financial background of all these multiples should be closely monitored.

It is extremely doubtful if the customer benefits from this "hello-money", loss leader products and other incentives. This Bill will eliminate this problem. In his speech the Minister said:

The grocery trade has an important role in our economy. We are talking about a business where total spending is about £2.6 billion a year and which accounts for over 26 per cent of average weekly household expenditure.

It could be said that in many large families it accounts for a much higher percentage than that.

The Minister goes on to say:

The intense competition which exists in this area might be expected to work for the good of the economy as a whole.

Price controls were introduced in the war years. I remember discussing price controls on fertilisers during our 1973-1977 term of office and pointing out the dangers involved. We were told at that time that competition would be generated by this move and that it would benefit the consumers. That measure did not have the effect the Department hoped because prices increased dramatically.

The Minister said:

I might perhaps mention here that detailed price control as such was abolished by my predecessor last year but I want to make it clear that I still have power under the Prices Acts and I will not hesitate to take action where I consider it necessary and justified.

I want to pay tribute to the Minister because since he took office he has managed to stay away from head-on encounters with different groups. Most of us would be inclined to take the easy way out, but he did not. He has made his presence felt in many areas and he has created confidence among purchasers and people who depend on fixed prices. He has put on pressure where it was needed.

He went on to say:

While on the subject of prices I would also like to say a few words on the alleged divergence in prices between here and the UK (notably Northern Ireland) which has been the subject of much publicity of late. As Deputies may be aware I asked the Restrictive Practices Commission to carry out a special investigation and report to me on the situation. I have now received that report and I hope to publish it very shortly.

I ask the Minister to give this his close attention because I know he is very concerned about this imbalance of trading. People have the view that everything is much cheaper in Northern Ireland but this is not so. If we were to compare item for item, we would see there is very little difference. Last week I was on a farm in Northern Ireland where they were erecting cattle drinkers in a cattle shed. I asked the price and I was told it was £19 plus VAT. Since then I bought a similar item and it cost 50p more in our currency. In other words, comparing the punt with sterling, it was cheaper in the Republic. The general belief is that everything, from a needle to an anchor, is cheaper in the North, and that is not so. There are some articles cheaper there and these attract people from the South. Cheaper petrol is another attraction.

The Minister said:

I have asked the Director of Consumer Affairs, who is acting as Examiner of Restrictive Practices, to contact the suppliers of a number of products where there appears to be a notable divergence in price as between North and South and to report to me with an explanation.

That is the most welcome news I have heard for a long time. The Minister has raised a hare here. In business if one has to reduce prices to compete one will do so, because where there is a will there is a way. I welcome that comment and if the Minister had made no other statement but that, this legislation would be very useful.

The Minister went on to say:

On a more general note I would like to say that the prospects for the Irish economy have been greatly improved by the new spirit of optimism which is evident in the country since this Government came to office. Through their strong and decisive stance confidence has improved.

The most important result of the Government's policy is that they have created confidence in the economy. There is nothing as important in trade or sport as the instilling of confidence in the participants. A former Member who graced these benches for many years, the late Paddy Smith, stated on many occasions that it was important for those involved in politics and political parties to have the ability to instil confidence in the people.

Debate adjourned.