asked the Minister for Industry and Commerce the action, if any, he intends taking to ensure that jobs are not lost in the H. Williams supermarkets as a result of the appointment of a receiver to the company; the measures, if any, he intends taking to assist firms which are in difficulties as a result of the H. Williams collapse; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - H. Williams Group Jobs.
7.
The Deputy will be aware that since he put down the question the receiver has made an agreement for the sale of the stores in question which he notified to me under the Mergers, Take-overs and Monopolies (Control) Act, 1978. I have decided not to make an order under the Mergers, Take-overs and Monopolies (Control) Act, 1978 in relation to the proposal.
In arriving at my decision, I had particular regard to the position of the former employees of H. Williams, and those employed in shopping centres in which H. Williams was the anchor tenant and whose jobs would be jeopardised by delay in having the stores reopened. I received written undertakings that at least 18 stores, including four Quinnsworth, will reopen over the next six months, giving employment to 700 staff, with a further 75 jobs later in 1988.
I also had regard to the position of suppliers and consumers who would wish to see as many as possible of the former H. Williams stores reopen quickly as outlets for grocery goods. It seemed to me that this offered the best prospects for the suppliers concerned.
I appreciate that part of this question at least has been overtaken by recent events. Is the Minister of State satisfied that suppliers to companies such as H. Williams are adequately protected against sudden closures in view of the fact that, unlike the banks, they do not normally have access to the accounts of these companies? Would the Minister of State consider introducing legislation or a regulation which would enable companies supplying supermarkets to have sight of accounts so that their investment in these companies would be protected?
I agree that those supplying any company are exposed but the Companies Bill which is at present before the Senaad will, when enacted, considerably strengthen company law, although it does not address that particular problem. It is a complex one and I will certainly take a look at it.
Can the Minister of State tell us in relation to the guarantee which has been given by the purchasers of these stores as to the number of jobs which will be retained, whether a guarantee was given that those who were formerly employed by H. Williams will automatically be retained by the new purchasers?
An indication has been given that the staff of H. Williams will be given preference in restaffing the stores. The purchasers expect that about 75 per cent of those who will be employed will be former H. Williams workers. I am satisfied that a genuine effort is being made to retain these workers.
Does the Minister of State accept that many hundreds of jobs will be lost? Can he tell us whether it is still the case that the same legal and other trading circumstances in which the H. Williams debacle occurred, still obtain in the marketplace? Is there any reason why some form of inquiry into the reasons for the closure should still not take place?
I fear there will be job losses but much will depend on what will happen to the other 13 stores. As the Deputy is aware, an undertaking has been given that 14 stores will be reopened, and a further two stores will be reopened some time in 1988. As the Deputy is also aware, Quinnsworth have acquired four of the stores and they are going to reopen them, hopefully before Christmas. That leaves an additional 13 stores and much will depend, quite frankly, on what happens to those stores and on the plans which the new owners have for them. The only undertaking we have received relates to the 16 stores I have mentioned plus the four which Quinnsworth have acquired. I encourage everybody involved in the remaining stores — if there is anybody involved in them at this stage — to reopen them. I would like to see them reopened as independent stores and trading as soon as possible but the Deputy will appreciate we cannot dictate to the owner in that regard. I hope there will not be job losses. It depends on what happens to those stores.
Will the Minister answer the second part of the question which is perhaps the more important part? The same circumstances still apply and the same thing could happen again. So why not some form——
Of course, but I thought it would be a good idea if I replied to the questions in the order in which they were asked. The second question was in regard to whether an inquiry was needed. The public are aware now of the whole saga of H. Williams. It has been put before the House. Details I have given now, such as the number of stores, what is happening to them, who is owning them, represent the position. There is a liquidator in place in H. Williams at the moment and he has statutory duties to finish out the liquidation of the H. Williams company. Therefore, in that context an inquiry would not be sensible and I do not think it is necessary just now.
Has the Minister or his Department any view to express in relation to the conduct of the banks in this whole debacle? What does the Minister think of the conduct of the banks in allowing extended credit lines which at the end of the day when they withdrew this facility resulted in the immediate collapse of this group? Has the Minister or his Department considered the role of the banks in this?
In regard to H. Williams, the role of the banks has been looked at as has the role of the extra credit, for example, extended to suppliers. There are many people with different roles in the collapse of the H. Williams operation. All one can say with regard to the banks is that we have not concluded that any action is necessary there other than to advise both banks and customers of normal commercial caution.
Regarding the sale of the four stores to Quinnsworth through the monopolies why did the Minister not refer them to the Restrictive Practices Commission? Would he agree that by not doing so he has compounded the problem in the grocery trade because of the imbalance created in that market, and has put at risk further the whole question of the suppliers in the market by increasing the control of the market by companies such as Quinnsworth and Dunnes who have nearly 50 per cent of the market between them?
Can I add to that question?
I would like the Minister to reply to the questions posed by Deputy Cullen first.
Every consideration was given to the point the Deputy made in coming to a decision not to refer it. H. Williams had 6 to 8 per cent of the grocery market in the country and the four stores taken over by Quinnsworth would have accounted for less than 1 per cent of the market.
One per cent extra.
The additional turnover in Quinnsworth is very small. It is less than half of 1 per cent. That was one of the factors taken into account.
That is a short-sighted view. It is an appalling statement to make. Recently in Germany the largest supermarket chain which has 8 per cent of the market was not allowed to expand further because it was considered they were large enough to operate. The Minister has now increased by 1 per cent——
Half of 1 per cent.
I thought the Minister said 1 per cent. Dunnes have something like 23 or 24 per cent of the whole market——
This is leading to argument. I wanted to bring in Deputy Ivan Yates.
Can I——
A question please, Deputy Cullen. I am anxious to facilitate the Deputy by way of eliciting information. We cannot debate the matter now.
Will the Minister not agree that he has taken an extremely short-sighted view and has made the marketplace more vulnerable?
Absolutely not. I do not think one should panic about half of 1 per cent of the grocery market. Secondly, there was the question of jobs to be considered which meant that we had to get those stores open and as many of them as possible back into operation before Christmas.
It is short-sighted.
Short-sighted perhaps to close down all the stores until after Christmas because we are afraid of a half per cent of the market? That does not make sense to me.
(Interruptions.)
Did the Restrictive Practices Commission extract any commitment from Mr. McTaggart in relation to the resale of any of the properties in view of the persistent rumour in the grocery trade that a number of the stores are now going to be sold to Dunnes?
We have neither exacted nor received any gurantee in regard to the remaining 13 stores.
The Minister has been duped again.
We have received guarantees which protect employment, much of it between now and Christmas. To take any other course of action or to pretend there was an ideal solution could have put all those jobs at risk between now and Christmas, all for the sake perhaps of protecting a half of 1 per cent of the market.
You started the grocery war.
(Interruptions.)
If this exchange across the floor continues I shall pass on to the next question.
Has the Minister had any discussions with Fóir Teoranta in regard to the plight of some of the manufacturing firms who were suppliers to the former H. Williams group? Secondly, in regard——
I ask for brevity.
——to the vulnerability of many companies to a collapse of this kind, will the Minister consider introducing a mandatory requirement for the publication of the level of credit outstanding to creditors of large purchasers like supermarket groups in order to protect small suppliers from a further debacle of this kind?
I have had no discussions with Fóir Teoranta on this subject and I do not think that would be appropriate. Any supplier can approach Fóir Teoranta for assistance on the basis of their normal criteria. In regard to the Deputy's suggestion about the publication of trade credit outstanding, I will have a look at that to see if there is any way it could be undertaken sensibly, but the Deputy will be aware of the fourth directive and subsequent legislation which makes it easier for the public to get access to some accounts.
Not for multinational companies.
Yes, but there is a procedure whereby the accounts of those operating here are available. I will have a look at the suggestion, anyway.
Have the Minister's Department had any role at all with regard to any of the major groups such as Dunnes or Quinnsworth buying up or taking leases on empty stores which would presumably increase their share of the market? Has he any powers or does he propose to take any powers in that regard?
I understand, subject perhaps to correction, that the Monopolies and Mergers Act would come into effect if there was an obvious disproportionate increase in any company's share of the market. Our aim is to get maximum competition into the marketplace, and we have tried to achieve that. We will use the Monopolies and Mergers Act to ensure at all times that there is genuine competition in the market. We are not anxious that any stores or multiples of stores would get an over-dominant position in the market. What is a dominant position we have to judge as best we can. That is why I hope these 13 additional stores will fall into the hands of independents and will provide genuine competition to the existing supermarket structure.
If the remaining 13 vacant shops were bought by Dunnes or Quinnsworth would the Monopolies and Mergers Act come into effect in this respect?
Question No. 8. The Chair has called the next question.
That is my view but I am subject to correction on that.