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Dáil Éireann debate -
Tuesday, 28 Feb 1989

Vol. 387 No. 7

Adjournment of Dáil under Standing Order 30. - Dublin Bakery Closure: Motion.

I move:

"That the Dáil do now adjourn."

In moving this motion under Standing Order 30 I know that I speak for all in this House in expressing sadness at the loss of their jobs by 485 workers in Johnston, Mooney and O'Brien and 100 workers in other bakeries up and down the country in the last few days. It costs so much to create jobs nowadays — £10,000 or more if those jobs are created through the IDA — that the loss to the economy of jobs of this magnitude is a very severe financial blow to everybody in the House. However, the loss is immeasurably more severe for the families directly affected for whom there now opens a vista of idleness and emigration.

This tragedy can be traced to the failure of the Cabinet to devise any coherent or even consistent response to the crisis that has been evolving publicly before our eyes in the bread baking industry. In fact, this failure is directly traceable to an inefficient allocation of ministerial responsibilities by the Taoiseach. On coming to office the Taoiseach gave responsibility for the flour industry, and it would appear in part for the bakery industry, to one Minister, the Minister for Agriculture and Food but he gave responsibility for the IDA, for competition policy, for prices and for all matters that affect the survival of those jobs to another Minister, the Minister for Industry and Commerce. That inbuilt institutionalised confusion created by the Taoiseach has led to a paralysis as far as policy making is concerned in regard to the baking industry and is the direct progenitor of the problems that we see unfolding before us at present.

The Taoiseach's inability to get his Ministers to work together to evolve a strategy for the baking industry is something for which he directly and personally must be held to be culpable by the House and has led directly to the tragic news that we heard this morning. The most eloquent commentary on the Government's reaction to this grave situation is to be found in a quotation in this evening's Evening Press. The Minister for Industry and Commerce, who had a lot to say about the baking industry a few weeks ago, was asked for his comment on the loss of 485 jobs in Johnston, Mooney and O'Brien and this was the response reported:

The Minister for Industry and Commerce was unavailable for comment this morning. His press office was taking no queries on the crisis and attempted to switch the responsibility for the problem over to the Department of Agriculture and Food——

That is not correct.

The quotation continues:

—saying that bakeries are their concern.

That is not correct.

If it is in de Valera's press it has to be true.

This would be funny if it was not so tragic. The Minister for Industry and Commerce is trying to run away from the problem and the Minister for Agriculture and Food has run away from the problem long since. We have a situation in which they all seek to shift blame to one another in respect of this tragic closure. The dogs in the streets could have told the Government two months ago that this problem was going to be on their table this day but they have been evading it ever since. This is impermissible behaviour on the part of a collectively responsible Government and there is one man, and one man only, who is responsible for this political failure and that is the Taoiseach, Deputy Charles J. Haughey. It is his job to make sure that his Ministers work together to evolve a strategy for this industry and he has failed just as much as his two Ministers have failed.

There is, of course, other evidence available of confusion in the Government's thinking on this issue. In December, with some fanfare, the Government introduced a retrospective freeze on the price of bread the effect of which was to raise the price of bread in the shops, guarantee larger profits to those bakers who were able to sell bread below those prices and, it was hoped, stabilise the situation. At that stage the Government, obviously, believed that such a minimum price was a wise and good thing. At that time the Minister for Industry and Commerce spoke of the fears expressed of considerable job losses in the baking industry. What has happened since?

In February all that concern seemed to have evaporated because the Minister considered in that month that the order should be revoked. He said the order would produce a degree of rigidity in the marketplace which would be inappropriate and unfair to the consumer. First, it was necessary to protect jobs — that was the Minister's view in December — but in February he said the order created unnecessary rigidity. Is the man capable of making up his mind? Are the Government capable of making up their minds on a simple issue of economic policy, whether or not to have a minimum price on bread? They could not make up their minds and people are paying the price.

Of course, an investigation had taken place between December and February and the Minister claimed that that had shown that there was no evidence of below-cost selling. On that basis he felt he could revoke the order but yet the Minister admitted in the Dáil on 16 February, in regard to the findings of the Director of Consumer Affairs, that

The director did, however, consider it appropriate to undertake an investigation into the true production costs of an 800 gramme sliced pan. This would enable him to establish the prices at which an economic return can be made from the production of bread. It will be some weeks before this complex exercise can be completed.

In other words, the Minister admitted that he did not know the true cost of a loaf of bread. How could a Minister assert that somebody was not selling bread below cost if the Minister admits that he does not know the cost of bread? I believe that the Minister, again, has shown monumental incompetence and internal confusion in so far as his thinking is concerned. The fact that he continues to be allowed to get away with this is an indictment of the Taoiseach for retaining his services. I ask the Minister a simple question: "If you do not know what the cost of bread is, how can you say whether goods are being sold below cost?"

It is obvious from the events I have just described that the Government have no policy, no plan, no clue about the bakery industry. Jobs will disappear but the Government will be satisfied to continue fatuous buck-passing between Minister Burke and Minister O'Kennedy, and if they can find somebody else to take the ball from them I am sure it will be passed to him or her.

Liam Lawlor.

This is not good enough and I hope the debate, which the Chair has so kindly allowed to take place, will force the Government at last into facing their responsibilities in so far as this industry is concerned and come forward with clear proposals, a Government plan, under the responsibilities vested in them by law for the development of the baking industry. I propose, and my party have already proposed, a four point plan to provide hope and a secure future for the bulk of the baking industry. The first thing we need to do is to provide for amalgamation and rationalisation within the industry. At present we have a large number of small bakeries all producing a wide range of products, all duplicating one another, distributing those products. What is needed if our small Irish bakeries are to survive is that they be amalgamated, that they specialise, each one, in a particular product line, that they have a single distribution network and that they have together the market power to stand up to the multiples that they do not have individually.

The Government have a role to play in this. Under section 26 of the Industrial Development Act, 1986, the Industrial Development Authority have been given power and responsibility to promote mergers in industry. I tell the Minister that he should direct the IDA tonight, if he has not done so already, to undertake a programme of assistance through loan guarantees and otherwise towards the amalgamation and rationalisation of the structures of our existing baking industry. It is only through rationalisation that those industries will be capable of surviving in the face of the competition that they now must encounter.

Second, I call on the Minister to take steps to assure consumers of the quality of bread in our shops. At present there are many suggestions that this low cost bread has excess moisture content and is deficient in protein. These allegations may or may not be true, but the Minister has the power under section 10 of the Consumer Information Act, by order, to require bread manufacturers to display on the packages information in regard to all those characteristics of the bread they are producing so that somebody buying a package of bread will know what its content of moisture or protein is. Thereby the Minister can ensure that if people buy low cost bread which is low quality bread at least they know what they are doing. At the moment they do not.

Third, I call on the Government to prepare a long-term development strategy for the Irish baking industry. Major advances in recent times in enzyme technology, a branch of bio-technology, have resulted in much lengthened shelf life for bread. Bread is now claimed to and can, with modern technology, survive fresh on our shelves for much longer periods than hitherto. This has two implications for this country. It means on the one hand that it is now possible for bread to be imported. It is also possible for bread produced in one part of the country to be sold at the other end of the country. It also means that Irish bread can be exported and, in my view, the object of a long-term strategy in the baking industry should be to so rationalise it that instead of Irish bakeries fighting a defensive stragegy vis-à-vis the domestic market they are looking to the export markets with the aid of the State agencies and finding possibilities of selling Irish bread overseas. If there is such a big difference between the price of bread here and in supermarkets in Britain, twice those obtaining here, why should not Irish bakeries avail of the better prices across the water? That would be a positive response, one so sadly lacking from this Government to the present crisis, a response founded on seeking openings overseas.

Fourth, I call on the Government to introduce an outright ban on predatory pricing and the abuse of dominant positions in the industry. There have been suggestions, unproven but very persistent nonetheless, that some of the multiples are abusing their dominant position. If that is the case the law should be used to put an end to it and that can be done by incorporating Articles 85 and 86 of the Treaty of Rome directly into our Irish law because those Articles ban predatory pricing. We should make them part of Irish law and enforce them with criminal sanctions. A Bill to do just that came before this House two weeks ago, the Enterprise (Competition and Consumer Protection) Bill, 1989, presented by the Progressive Democrats. In section 2 of this Bill it was proposed that any abuse by one or more individuals, trade associations or companies of a dominant position within the State or a substantial part of the State shall be unlawful in so far as it affects trade within the State. Fine Gael proposed similar measures by means of amendment as long as 18 months ago and have another Bill, the Economic Development Bill, which will be coming before the House in the next few weeks proposing exactly the same measure. Yet that measure which would for the first time in Irish law have done something to stop the abuse of dominant positions was declared by the Government, if it were passed, to be a confidence issue. They said it was a matter of confidence that that Bill be defeated. They did not want in our law a provision to render dominant positions unlawful. They declared it a matter of confidence, and with the support of the left wing parties that measure was voted down. An opportunity was lost in that Bill which could have been amended to deal with any other difficulties that the Left might have had with it. An opportunity of dealing with that matter was lost by the voting down of that Bill by Fianna Fáil and others under their influence.

I believe those four points represent a comprehensive programme to strengthen the baking industry and are much more effective than the pathetic vaccillation between price freezes on the one hand and masterly inaction, visible inaction, on the other which currently represents the response of Government. I believe and hope that this debate which the Ceann Comhairle allowed will, by providing an opportunity for all sides in the House to express their concern about this situation, lead to the adoption by the Government of the four constructive proposals I have put forward. It is on that basis that we can go forward. I do not believe in reverting to minimum price orders, which in fact are not capable of being implemented under existing law because existing law only sanctions maximum price orders, but rather a constructive strategy banning predatory pricing, ensuring the quality of bread, instituting a long-term strategy for the industry and giving IDA a system for rationalisation. That four-point strategy represents a constructive answer to this crisis and I hope it will be acted upon by the Government and that we will not have more closures next week followed by more closures the following week. It is only if this House can be seen, through this motion, to take action on this matter that that can be stopped. It all hinges not so much on the Minister here at the moment, the Minister for Industry and Commerce, but on the Taoiseach. It is ultimately his responsibility to get the Ministers at last to work coherently together to deal with this debacle.

I welcome the opportunity to speak on this matter. As the House is aware, I have been consistent in raising this matter over the last fortnight. Indeed the Ceann Comhairle allowed this matter on the Adjournment Debate on 16 February when I made many of the arguments that we have just heard. It is sad that we have to make them here again this evening in the light of a very serious number of closures in the bakery industry.

It is absolutely clear now that the failure of this Minister for Industry and Commerce in this matter has caused grave problems to the bakery industry. As a matter of fact he has displayed a very serious error of judgment with regard to the bread price war that is in train at the moment. The failure of this Minister to act can now be measured in our very substantial job losses throughout the bakery industry which has been highlighted by the closure of one of our oldest established bakeries, Johnston, Mooney and O'Brien, with the loss of over 485 jobs.

The Minister must take responsibility as he is the primary individual in this Government responsible for this area. There may be confusion which has been brought about by delegation of authority within the Government but I am satisfied that this is the Minister responsible. He is the Minister charged with job creation on behalf of the Government and indeed he is in control of many State agencies which should help to bring that about. He cannot sit idly by and say he has no responsibility in this whole debacle we are now facing.

The Minister introduced a prices order because he believed that a short-term price war in the grocery trade would lead to significant job losses in the bakery and flour milling industry. They were the Minister's words. The response he got from Dunnes Stores was to immediately break the prices order. I ask this House, on that happening why did the Minister not prosecute the people responsible for totally ignoring a law laid down in this land? The Minister took a very cowardly approach to the whole matter and revoked the order he had set in place. Where is the consistency from the Government and the Minister on this matter?

The Minister then followed on by stating he was satisfied that stability had occurred in the marketplace and that there would not be any undesirable and uncontrolled developments. Surely his whole judgment in this matter is flawed. His attitude of hiding in the wings and the scandalous double standards he has displayed on this issue in my opinion, and in the opinion of the Progressive Democrats, puts into question his whole ability to function as a Minister for Industry and Commerce. The implications are far more wide-ranging than the issue we are discussing this evening.

It has been mentioned already, and I believe from the information I have received, that serious question marks now arise as to the quality of bread being produced in this country. I referred to this matter on 16 February. It is well known that much of the flour being brought into this country is unusable or largely not wanted on the British market and is of far less nutritious value than the bread the Irish consumer has enjoyed up to now. The Minister was at pains to point out that this is in the interests of the consumer. It is certainly not in the interests of the consumer. The consumer is being duped in this whole matter and is being forced to accept a very inferior quality of bread. Bakeries that have produced good quality bread, which is a large part of the staple diet in this country, are going out of business and, as a result, the quality of bread will be drastically reduced.

It is not right to say that rationalisation in the bread industry means that all the small bakeries must disappear. That is not true. There are many small bakeries operating in small towns and cities who have a market and are operating successfully within that market. They have invested large sums of money in the business to keep jobs in the industry and to supply the consumer in their areas with a very good quality sliced pan. It is misleading of the Minister to suggest that the consumer is benefiting. We know today the reactions of the consumer. They have stated that they are not just interested in cheap bread at the price of job losses, job losses which are resulting from the Minister's failure and total abdication of responsibility in this matter.

We have heard mention earlier — and I welcome Deputy Bruton's comments — of the Enterprise (Competition and Consumer Protection) Bill which was introduced to the Dáil. It is ironic that all the arguments made on this side of the House with regard to that legislation are relevant to what is happening in the marketplace. There is clear abuse of dominant position by Dunnes Stores and other multiples in the marketplace who are lowering the price of bread to the detriment of a whole industry. They want to gain control of the production of bread and its wholesale and retail operation in this country. That is not in the interests of the consumer and it is not in the interests of competition. As a party we have consistently favoured open competition but we have also said on many occasions — and the Minister has tried to misrepresent this point of view — that there must be ground rules in operation to allow for fair competition. The defeat of that Bill by the Government, in combination with the Labour Party, The Workers' Party and others in this House, was a total disregard for the type of legislation that was necessary.

When I raised this matter on the Adjournment debate the Minister's reaction with regard to job losses and what was happening was to spend 15 or 20 minutes complaining about the Bill the Progressive Democrats had introduced in this House. That was a very poor response from the Minister who was hiding behind words. He may have some smart words to say in this House but it is to the employees of these companies that he and the Government will have to answer, not just to me and others in this House. Those people want to see the Minister taking action in this area. They see the inactivity and the double standards he has displayed. Are we not going to face up to our responsibilities in this area? We want to see an end to monopolies because they are not in the interests of the consumer but are we to replace them with the law of the jungle as this Minister seems to want? That is exactly what is happening outside the walls of this building this evening. It is not a desirable course of action and it is not in the interests of employees, employers or the consumer.

There must be ground rules. As I stated two weeks ago, ground rules have already been established. Half of our economy operating in the international sphere are operating under these ground rules. That is the most dynamic and progressive end of our economy. Why will the Minister and the Government not allow the domestic economy to operate under the same rules? It is quite obvious to everybody in this House, and indeed to people on the street who fully understand this issue, that the Government will have to bring in legislation along the lines of what they conspired to defeat two weeks ago. That is the only long-term solution to the type of predatory policy and the type of abuse of dominant position that is evident in the marketplace. That must be our response as legislators to that sort of behaviour.

It is within the ambit of this House to set down the parameters of how business should operate and to allow open and fair competition. I am not interested this evening in listening to the Minister trying to point out that I have adopted some kind of a contradictory position. That is not true, and full well the Minister knows that. More importantly, those operating in the bread industry and the consumers at large also know it. It is quite clear what the Minister should do.

I have made attempts in the past fortnight to get the Government to see reason in this matter. We are now faced with asking the Government and the Minister what do they intend to do with regard to the bakery industry. Will the Minister say that he will allow this to continue, and that the job losses that are occuring would occur anyway? What we are seeing are enforced job losses.

There has been rationalisation in the industry over the past number of years but it has occurred in a reasoned and calm manner and I have no doubt that further rationalisation within the industry will probably be necessary and indeed will occur. However, it must occur in an atmosphere of calmness and stability and in a planned way and not in the way we are seeing at present. I assure the Minister that many supermarket chains are forcing their suppliers throughout the length and breadth of the country to come to new agreements to sell bread to them at ridiculously cheap prices or even at cost so that they can compete in the marketplace. These suppliers have nowhere else to go; in fact, up to 80 to 90 per cent of their production goes to the multiples. They know that if they do not supply the multiples effectively they will be put out of business. Therefore, they are forced to comply with what I would call false costs, and they have to show false costs simply to struggle to stay in business. Is that the way we want to see business operate? Is this a fair way to do business?

Is this what the Programme for National Recovery means? Is this the overview of the Taoiseach and the Minister for Industry and Commerce who have nothing to say on this matter, but who have been forced to respond because this House saw fit to allow a motion on the matter to be debated here this evening? Is this the way the Minister for Industry and Commerce is running the Department — not having the gumption to stand up to them but acting cowardly in the face of pressure from people such as Dunnes Stores? It is obvious that as a result of the price freeze they had put pressure on to have the Minister withdraw the order.

I would like to quote the Dunnes Stores response: "We did not agree with the order but yes, I suppose we broke the law". Does that mean that any future price orders the Minister may see fit to introduce will be a waste of time?

It is usual to give the source of the quotation.

I have quoted from Business & Finance of 23 February 1989. Are businesses to understand that in future prices orders can be ignored because we have a weak Minister for Industry and Commerce? Will they simply say they will do what they like, that the Minister will simply revoke the order and they will carry on as they see fit? Let me say that is exactly what has occurred when the Minister withdrew the Minimum Prices Order in the face of a company flagrantly breaching the order. Is that to be the future line of operations? Of course, it tells us that the type of legislation we have is completely ineffectual. It clearly says that we do not have sufficient legislation in operation to deal with these matters. I would like to hear what the Minister proposes to do about it.

I am not looking for a short-term solution. I believe the Minister — unless he has come up with some ingenious response to the immediate situation — has to introduce a minimum prices order again to create a breathing space in the market so that a planned and orderly rationalisation process can occur. What is happening at present is highway robbery — the robbery of jobs from people who have committed all their lives to working in the industry and are now out on the side of the road and many with literally no opportunity of re-employment. I heard a very apt comment today that if this Minister was announcing the creation of 485 jobs in Dublin what a great coup it would be with great pomp and ceremony surrounding its announcement, but it is interesting to see the quietness when 485 jobs in addition to at least 175 jobs, that I am aware of, have already been lost up and down the country. The comparison is rather interesting. I think it points out the way the Minister for Industry and Commerce views the importance of one of the major portfolios. We see the great job creating Minister.

As for the Programme for National Recovery, we can tear it up and throw it away because the Government are not interested in creating an ordered environment for maintaining existing jobs, and that has been one of our greatest problems. We have been creating jobs in industry against the tide but we have been losing jobs at the rate of knots and the Government seem paralysed and unable to put in train a plan to sustain the existing jobs we so badly need. This is the responsibility of the Minister for Industry and Commerce but he is trying to cloud the issue by pretending that it is in some way the responsibility of the Minister for Agriculture and Food. Certainly, I believe that the Minister for Agriculture and Food should have some view on the matter — and he, of course, is quite obvious by his silence, but he has far more important matters in Thurles to deal with.

Companies and people who abuse their dominant position in the marketplace must be called to task. They cannot be allowed to run riot over an industry having no regard for the huge job losses their behaviour might cause. That is not competition. I will not stand here and allow this Government to cloud the issue if that is to be their only response. Fair and open competition can exist if this Government have the nerve to introduce the necessary legislation but so far they have shown they have not got it. Time is of the essence and the Government have to behave in a responsible manner. In the long term the Minister must bring legislation before the House similar to that which was defeated two weeks ago. The ground rules for fair and open competition must be established or similar situations to what exists at present will continue until we bring about the necessary legislative changes. I await the Minister's response. I must point out that the people who are employed in the bakery industry, in flour milling and in retail outlets are awaiting his response. He should address his comments to them this evening.

A Leas-Cheann Comhairle, I thank you for allowing this debate to take place because it gives us a better opportunity to debate the matter than the Private Notice Questions which are down in the names of the various parties.

This is a particularly sad day. Not only are we seeing the disappearance of 485 jobs in Ballsbridge but we are seeing the demise of the last of the three great traditional bakeries that epitomised Dublin: Kennedys have long since gone; Bolands went two or three years ago and now Johnston, Mooney and O'Brien. There are a number of lessons that all of us — I mean all in this House and not just one side or the other — would be very unwise not to take full heed of.

First, the Government are responsible for the present situation in the general baking and food industries. The Minister for Industry and Commerce, who is here this evening on behalf of the Government, has a specific responsibility in the way in which he handled, or mishandled, the question of minimum and maximum price orders. I would be unfair, a Leas-Cheann Comhairle, if I were simply to concentrate the criticism on the present Minister for Industry and Commerce because sitting beside him should be the Minister for Agriculture and Food who has overall responsibility for the milling, baking and flour industries and their related downstream value added process, the baking of bread. However, having regard to the disastrous way the Minister handled the winding up of the Thurles sugar factory it is no wonder he is not in the House this evening.

Let us not personalise the criticisms against any individual Minister. This is a matter for collective Government responsibility and the Government must take responsibility and the blame for what has happened in the past couple of months. As Deputy Cullen and Deputy Bruton have said, it is not without fair warning that these things have happened. The point I want to make is that all the talk here tonight is not going to bring back the jobs of 485 workers who were given two weeks' notice that their jobs were gone but this seems to be Government policy on every other industrial sector. If this is the way the Government propose to respond to the changes occurring in our society from within and without, then we are in for very rough times indeed.

With the closure of Boland's Bakery three to four years ago, the Department of Industry and Commerce, the IDA, and the Department of Agriculture and Food knew exactly the difficulties in the bakery industry, yet little or no effort was made to get the sort of rationalisation, matchmaking and amalgamation which were essential if we were to retain a fairly professional baking industry. I use the word "professional" advisedly.

A large new entrant into the baking industry, led by the well known multiple whose name I am constrained from mentioning which had its own retail units, was not the first to get in an untrained unprofessional into the bread making business. That body was preceded by a major hotel chain which carried the name of the owner. They were the first to get into the business of trying to cut out the professional baker. Both those companies started the process whereby today, because of the changes in the process and in technology, our baking industry in baking the large 800 gramme sliced pan is completely vulnerable.

The Programme for National Recovery, a programme which has gone very flat in the last couple of days, like a cake without baking powder in it, talks about linkages, about ensuring that job creation opportunities will be maximised, about there being a partnership between the State and the private sector and about creative efforts to find new possibilities for job creation. Yet, for a basic industry baking a staple commodity such as bread, an industry known to be vulernable for a variety of reasons, nothing was done. The Minister and the Department with direct responsibility to the Government were at the front line of the early warning system that sent out distress signals to the effect that the traditional Irish, large size, pan baking industry was in crisis. The Minister, in reply, is duty bound to give some indication to the House what actions he took above and beyond imposing and then removing the price order. What actions, if any, were taken by the Department and the Department of Agriculture and Food to come forward with the kind of strategy about which Deputy Bruton talked?

I was mildly surprised to hear Deputy Bruton go on in such a coherent way suggesting that what was required was an extraordinary degree of sophisticated State interference in the banking industry. That is not the Deputy's normal line of argument, but he recognises that in this instance the private sector left to its own devices will produce the laws of the jungle which Deputy Cullen on behalf of the Progressive Democrats has so roundly condemned. The Government within the framework of discussions between the unions and the remaining sections of the private sector have to work out some kind of coherent strategy for this industry.

We are not just talking about the basic 800 gramme sliced pan. It is not without significance that the owners of Johnston, Mooney and O'Brien are major flour producers and flour millers and retailers in that area. They saw the baking industry as a natural and logical outlet for their primary product. If we do not have a coherent strategy then the continued importation of flour from other countries, particularly from Britain, will mean that not just the Irish baking industry will be at risk but also our flour milling industry.

It is accepted that changes are inevitable. Yesterday on the radio the general secretary of the Bakers' Union recognised that the new bakery which was going to be built by Johnston, Mooney and O'Brien would have resulted in considerable reductions in the labour force because of improvements in technology and productivity. Instead of the general secretary being able to talk about that new bakery he was confronted with the shock announcement of the closure of the bakery. There is recognition on all sides of the industry that changes will occur but to date there seems to be an extraordinary inability in the private sector to implement the sort of planned rationalisation which is the alternative to the commercial law of the jungle which the Progressive Democrats and Fine Gael are saying they are against tonight, without the positive intervention of the Government either directly or indirectly through the State agencies.

Tonight it is not the position adopted by the Labour Party, The Workers' Party, the Fine Gael Party or the Progressive Democrats which is to be challenged. It is the actions of this Government to date and the apparent confusion between Government Departments which share the responsibility for the pricing mechanism, for job creation and for the agriculture and food industry. It is ironic that only last week the Minister for Industry and Commerce blithely announced to the nation that he could proceed with the closure of Fóir Teoranta because there was absolutely no need for this kind of rescue agency. Is there no need for this rescue agency now in the light of the disappearance of 485 jobs?

This same Government have promised marvellous things in this city. In relation to the Custom House Docks site we were repeatedly promised upwards of 1,500 jobs on site. In that catchment area there is a maximum grand total of 205 jobs in the Custom House, of which 41 are filled by local people including 14 apprentices all from the north side of the Liffey and the remainder from outside. We have this much trumpeted achievement by the Government in part of the inner city area which was to produce hundreds of jobs. This has been in the newspapers day in and day out. Side by side we are losing nearly three times the number of jobs being created and the Minister is trying to walk away and disclaim any responsibility.

The actions of the Government to date in relation to the baking industry, and specifically in relation to the bread war, are riddled with indecision and with a lack of clear thinking in relation to whether there should be some kind of price control mechanism. There seems to be a timidity about taking on a large multiple which dominates the retail area in this country. It seems to be a law unto itself, in terms of its relationship with the Dáil and the Oireachtas not to say anything about the relationship of that multiple with its many suppliers. Deputy Cullen articulated the concern of many people about that aspect of the operation of this kind of large retail multiple. Is the Minister really that scared of dealing with this large multiple? Is that the extent of their power and influence in this land at this time? Will the Minister say who in this Government is responsible for the preparation of a strategy to produce jobs in the bakery sector? Is it the Minister or his colleague, Deputy O'Kennedy? If both Ministers are responsible, when did they last sit down and talk about this? At the very least, is there a working party in both Departments working on this problem? There must be a few spare working parties somewhere.

There were hundreds left over when the Deputy left office.

That is right and they have left a lot of documentation which was extremely useful, otherwise the Government would not have come up with any ideas. They have now completed some of their task and they could be put to some good use again. Surely, if such a body is not in place there is a need for one with a determined timetable in relation to when it will complete its report.

The last matter I want to raise relates to the dominant position that different companies have in our economy and what action, if any, the Government will take. We have to conclude where we started. We started this debate tonight because of the shock announcement of the loss of 485 jobs. This is a devastating blow to the people directly involved. It is a devastating blow to many of the suppliers of that particular company. I would ask the Minister for Industry and Commerce — according to the reports in the press that company is completely solvent and the major shareholders have reported good trading over the last few years — to assure the House that not a single supplier, not a single worker, not a single trader with a professional trading relationship with this company, will be left short of a penny for any longer than they would otherwise be, by the shareholders and directors of this particular company.

I must call the Minister at 6.40 p.m.

The basic item we are discussing here today is bread. It is perhaps strange that in some parts of this world when the price of bread is increased there are riots in the streets, and we are debating a problem which appears to have arisen because bread prices have come down. This has caused a considerable amount of confusion, particularly among the people who use bread to a far greater extent than most others, that is, those on low incomes, whether derived from low pay or social welfare. It is important to ensure that the confusion is not deepened by what is said in this House.

There is no doubt that there are thousands, if not hundreds of thousands, of people outside this House who want to buy cheap bread. It is important, therefore, that this House — at least those of us who are on the Left, as has been referred to by others parties — make it clear that we are not opposed to the provision of cheap bread for those who are obliged to buy large quantities. What we are concerned about specifically is that bread is made, distributed and sold in a way which ensures that the consumer is getting a quality product, and getting what they assume they are paying for. There is no guarantee that the bread, whether cheap or otherwise, which is being supplied to consumers at this time is of the quality they assume they are buying. That is an issue which the Minister should address. What precisely are people buying when they buy a loaf of bread? What is it made of? How much moisture is in it? What chemicals are in it? What are they eating? What are they buying?

The second point we should bear in mind is that price competition will not necessarily result in the most efficient or highly technological producers surviving or providing bread in the long run. I have no specific knowledge about the company which Dunnes bought out last year and who are presumably baking and supplying them directly with the cheap bread they are now offering for sale. I do not know what kind of operation they have, whether it is efficient, highly technical or if it is like a number of back street operations depending on cheap labour, young labour and female labour which is sweated, for long hours, late nights and early mornings. These are questions that have to be addressed when we are talking about this industry and supplying bread.

I have spoken to people who need to buy cheap bread. They said they do not want to buy a loaf of bread 10p cheaper if it means that their father, husband, daughter or whoever will lose their job as a result. That is another aspect we have to keep in mind.

Effectively, the Minister has washed his hands of the problem which the baking industry finds itself in. There is no doubt that efficiency is required. The socialist parties in this House, and the trade union movement outside of this House, have demanded efficiency, and the introduction of the best technology to produce goods, not just bread, because we and they see that industry can survive only if it is based on the most up-to-date and efficient use of technology.

We do not make those demands simply on the basis that those who control the technology and the industry can, at the drop of a hat, throw 485 people out on the street. That is not acceptable, particularly when the company sold the site on which it operates for £4.4 million less than a year ago. It is not acceptable that the company can tell staff they are out in two weeks' time and the company walk off with £4.4 million, and whatever else they may acquire in terms of its sale by the liquidator. The workers are left high and dry, some having given 40 years of their lives to the company concerned. That is not acceptable.

There is no way any Government should stand over that kind of activity. It is a very timely lesson for this House and for the people of this country in relation to 1992 when, we are told, there will be free and open competition between all the States of the EC. Is this the kind of competition we will have?

It is my belief that the Government must demonstrate to the baking industry that they are capable of ensuring that workers' rights to redundancy, fair play, notice, etc. are protected and defended. They must ensure also that the companies who are offering competition to established industries are not doing so on the basis of sweated labour, using part-time labour which is unprotected and which has no rights under social legislation. This Government have to demonstrate that in handling the baking industry they are capable of ensuring that an adequate social dimension is included in any negotiations with regard to 1992.

I can foresee a situation where there will be utter chaos coming up to 1992 and thereafter, with regard to the livelihood of tens of thousands of workers in this country unless this Government can demonstrate they have the capacity and the will to take on industry and insist that they abide by the common decencies. They must ensure at European Community level that there are adequate safeguards and protections introduced so that the law of the jungle is not spread throughout Irish society arising from 1992.

I have got the impression from reports in the press during recent days on this problem in the baking industry that the Minister does not have a concern about the misery which is being created and caused to many workers, not only to those who have lost their jobs already and those who are threatened with losing their jobs, but to those who are still in the baking industry and who may lose their jobs next year or the year after.

The Minister does not appear to appreciate that there is a real fear and problem in that industry. Certainly none of the statements he has made to date would indicate that he has a concern. He has indicated that competition must take its course but, as I have said already, there is no guarantee that competition as it is taking its course in the baking trade will necessarily result in the most effective or efficient baking industry. What may well happen is that one or two multiples will control the industry through their buying power and will, in turn, be able to indicate the price they charge for the bread they make available. It is commonly known that when multiples drop their prices on one staple item such as bread they cover themselves by increasing the price of other items. That has been a common feature of the grocery trade for many years since the development of the multiple supermarkets in the State.

The Minister has a lot to answer for in this House today, not only in relation to the jobs which were suddenly announced as having disappeared during the past few days, but also in relation to the future for those who are still in the baking industry. Like Deputy Quinn, I was surprised at the position taken by Deputy Bruton with regard to the baking industry. I welcome it but it is a change of position by the Fine Gael Party.

I do not think the Deputy was listening too closely.

I suppose as they say one should not read too much into it. Nevertheless it is a surprise and I welcome the fact that he has taken this position. There is no doubt that there has to be State intervention in relation to how capital competes with itself in society; otherwise the economy would simply operate in the interest of profit and not in the interest of the citizens of the State, as it should do.

The Minister has to take a number of steps in relation to the baking industry. First, he has to fix the price of bread at a reasonable level. He has already indicated that an investigation is under way to decide what is a reasonable production cost for a loaf of bread. That investigation should be completed as quickly as possible and a price should be fixed which will enable those already operating in the industry to meet that target and ensure that the multiples do not sell below that price.

Secondly, the Minister has to intervene, through whatever agencies he chooses, to ensure that the workers of Johnston, Mooney and O'Brien get a fair deal from the closure of that company. To date they have been unable to find out the whereabouts of the the £4.4 million the company received for the sale of their site. They do not know where that money is and they have failed to date to find out from the receiver where it is. It is essential for the Minister to step in and ensure that the workers of the firm get a fair crack of the whip from their former employers.

Thirdly, the Minister has to establish a long-term development strategy for the industry, as Deputy Bruton pointed out, and use whatever incentives he can whether it is a carrot or a stick, to ensure that the industry is in a position to compete not on the basis of producing a shoddy or cheap product but on the basis of producing a good quality product which is capable of being marketed because of its quality and the efficiency of its distribution, etc.

Those are the three steps which the Minister must take but I would add in relation to the development strategy that it is not good enough just to ensure that capital is capable of competing and that it modernises facilities and factories. The Minister must also ensure that the industry is developed in such a way that the workers who are displaced as a result of modernisation are not left high and dry in the dole queue. Alternative jobs should be put in place to ensure they do not end up in the poverty trap in which tens of thousands have already found themselves.

It is beyond doubt that rationalisation is necessary in the baking industry. I think this has been readily recognised by most people in this House, particularly by my party when our Deputy Leader, Deputy John Bruton, and spokesperson on agriculture and food, Deputy Avril Doyle, stated clearly the likely outcome of trends some months ago. Our policy can best be synopsised by the press statement from Deputy Avril Doyle on 12 January 1988 in which she called on the Minister for Agriculture and Food and the Minister for Industry and Commerce to get together with the Director of Consumer Affairs and Fair Trade and urgently investigate the bread war before irreparable damage was done both to an important indigenous industry and the long-term interests of the consumer.

That statement best sums up the situation we are faced with here tonight in that we are now talking in the aftermath of the closure of one of the most important industries in this city. The Minister and his colleague the Minister for Agriculture and Food must now recognise as a matter of urgency that there is need for cohesion and a strategy in determining what should prevail in the area of competition in the food industry. The Minister must determine as a matter of urgency what is competition and what is cannibalism. If he allows the situation to run as it has for the past number of weeks I fear that not alone will 400, 500 or 600 people lose their jobs but thousands of people will become unemployed in the industry and the whole baking industry may rest in the hands of two or three people. We will then have to ask whether the interests of the consumer or the industry concerned will be best served by allowing that to happen.

The Minister should first determine the actual costs involved. In determining these costs he should take into account quality control, the ingredients used, whether home produced or imported products are used and the quality produce which will be available to the consumer at the end of the day. If the Minister does not do this there is no possible way he can control the situation. I implore the Minister, in the interests of the industry, to take into account the need to preserve this indigenous industry both from the consumers' and the bakers' point of view. If he allows competition to be eliminated in the marketplace for whatever short-term reasons, ultimately the consumer will have to pay more.

At this stage — and I have to revert to the order revoked by the Minister before Christmas — it would appear that the Minister has done a double-take and he now has to ask himself who is determining the price of bread. Will the price of bread be determined by the Minister and his office in consultation with the Minister for Agriculture and Food or will it be determined by one or more multiples who obviously have their own best interests at heart in the long term? If action is not taken in this matter in the very future we will have to deal with this issue in this House on an ongoing basis over the next six to eight months.

I welcome this further opportunity of making the House fully aware of my position in relation to the current development in the bakery industry. I want immediately to refute the accusations made by Deputies Bruton and Cullen with regard to a supposed silence on my part on this issue. As recently as last Sunday I spoke on the issue. We had an Adjournment debate on it in this House and various other statements were made also.

Since I spoke last Sunday, one decision has been taken which has been referred to by a number of speakers this evening. I cannot allow the opportunity to pass without commenting directly on the decision announced yesterday to place Johnston, Mooney and O'Brien in voluntary liquidation. The simple reality of the situation is that Odlums, the parent company of Johnston, Mooney and O'Brien, are a very profitable operation. I would suggest that a question mark must be placed against this group's longer-term intentions for their baking subsidiary, Johnston, Mooney and O'Brien. This company, we have seen in the recent past, have had a prosecution for breaches of the health regulations. We have seen the sale by the group of the site of their present operations in Ballsbridge for a sum reported as £4 million plus. That must have contributed in no small way to the company's bottom line. We have not seen, however, any definitive commitment to the relocation of the operation by way of concrete proposals to establish a leading technology production unit capable of supplying not only the domestic market but also the export market.

Is it not therefore reasonable to ask in the clearest terms whether the company are not being opportunistic in attributing cause of closure to a temporary price war of recent origin when the real reason obviously lies elsewhere? Would it not have been more honourable for the company to acknowledge, particularly to their workforce, that they had long standing problems of such a nature as to raise serious questions about their plans for continued involvement in the bread area? I take this opportunity in this House tonight, even at this late stage, to call on Odlums and ask if it would not be proper for them, including their flour mill operations, to reconsider their decision and invest in a modern, cost efficient, high technology bakery, making bread available to the Dublin consumer at reasonable prices. In view of the fact that their company have been loyally supported by the people of Dublin over the past hundred years and also loyally supported by their employees over those years, I ask them to think again, and clearly, about the matter and not to take the opportunistic road and blame the short-term price war for what has obviously been a long-term strategy.

Government policy in this area is to provide a legislative and economic framework that will allow competition in the marketplace to operate in a free and fair manner. The Restrictive Practices (Groceries) Order of 1987, which bans below-cost selling among other things, provides such a framework in the retail grocery trade. A policy that stifles legitimate competition, however, will result in continued stagnation in the economic sector concerned. Such competition cannot be held back in the long term; the longer it is held back the greater the shock when free and fair market forces are allowed to operate.

One thing that struck me about this debate this evening and this whole issue of bread pricing is that there has been much talk about the bakers, and rightly so, much talk about the employees, and rightly so, but there has been very little talk in relation to the rights of the consumer. It was referred to by Deputy De Rossa more than most in the House. The consumer also has rights in this issue. Surely he or she is entitled to buy bread, or any other item, at the lowest available price once it is not a predatory price. We should never, as a Government, force any manufacturer to sell at a price which will be to the detriment of the consumer, once it is above the production cost.

This issue started originally with the director of Consumer Affairs and Fair Trade still investigating whether there was a breach of the groceries order. I considered it desirable at that stage, because of the fears, rightly expressed, of considerable job losses in the bakery industry and the failure to achieve a voluntary pause, to introduce a Retail Prices (Bread) Order in 1989. This order fixed white bread at its pre-Christmas price. The order, contrary to the impression given by some, was not a minimum price order. What it did was freeze prices so that there could be no upward or downward movement in relation to the prices charged on 20 December. This type of order is necessarily inflexible. It meant that if there was one outlet charging a lower price than another, it was not possible for the competitor to adjust his price.

I should like to point out, in response to the various suggestions that I introduce a minimum prices order, that such power is not vested in me under the prices Acts. I simply do not have the power to make a minimum prices order.

That is absolutely right.

Even if it were, and I would not use it if I had it, what price level would be chosen? The current lowest retail price is 39p, which appears to be above production cost for Dunnes, and I shall come back to that topic in a few moments. It is not my normal practice to mention companies but because of the particular circumstances it is hard to have a debate without doing so. Fixing a price above that would be statutorily to guarantee increased margins for Dunnes, or for other producers. Is that what I am being asked to do by anybody in this House? Deputy Cullen now shakes his head. He talked about my being cowardly and running away from things and asked me to make a minimum prices order. He does not know the law.

That might be impressive here, but it will not be impressive out on the street.

I shall not, could not and would not even if I had the power, fix a price that would statutorily guarantee increased margins of profit to any company. If I did so, the results could be appropriated as pure profit or used to cross-subsidise cuts in other retail prices. Is that what I am being asked to do? Furthermore, a price close to 39p, even if that were to be brought in, would not satisfy the current complaints from the bakery trade. How long should such prices be fixed, if there were such an order? Fixing artificial prices——

That is why Deputy Burke is the Minister.

——removes the market mechanism that will induce rationalisation. We had much talk about rationalisation, and rightly so, and the need for it. With every statement I have made on this issue and as late as last Sunday, I referred to the need for rationalisation because of the inefficiency in the market.

What is the Minister doing about it?

I have said previously that inefficiency of production is at the core of this whole issue. I want to take the opportunity to reject something that has been said outside this House by the CII. Unlike the normal representations one receives from that body, in this case they had been bleating about, of all things, a form of subsidisation which existed for years, brought in by successive Governments and supported by successive Governments, a subsidy that was for the benefit of the consumer, saying that in some strange way this subsidisation stopped rationalisation. That is sheer unadulterated nonsense, coming from an organisation for which I have much time and respect.

Inefficiencies in some bakeries, acknowledged by the Irish Bread Bakeries Association, must not be allowed to prevent the benefits from free competition flowing to the consumer. It is my belief that many of the present difficulties have been brought about by the failure of some firms in the industry to make use of the most efficient means of production. Once again, I strongly urge those in the industry to modernise, in their own long-term interest and that of their employees.

Deputy Bruton and other speakers referred to the quality of bread and said that there should be identifiable and proper labelling. The 1982 food labelling regulation requires that a full list of ingredients — as well as a number of other items of information — be shown on bread. All legal requirements in this regard are in full compliance with the EC provision as set out in the 1979 Directive on Food Labelling.

Deputy Bruton and Deputy Cullen said that the dominant position of one company should not be allowed to distort the marketplace. The fact is that the bread making capacity of the bakeries involved in Dunnes is of the order of 10 per cent of the market. Under legislation dealing with monopolies, abuse of dominant position would not arise unless a particular supplier controlled over 50 per cent of the market. That is not the case here and the company involved control about 25 per cent of the market.

Not in each individual locality.

Deputy Cullen is shaking his head. When he asked about minimum prices and I answered him he said I did not propose them. The Deputy came into the House with consumer legislation two weeks ago which was anti-consumer——

It was not and well the Minister knows it. He should talk to the people who have lost their jobs.

I wish to remind the House that a very strict time limit applies to this debate and——

Did the Minister ask the supermarkets to raise their prices?

I was about to say that interruptions are particularly unwelcome if not disorderly. The Minister without interruption.

The Director of Consumer Affairs and Fair Trade made a report on bread prices available to me today. He states:

In my investigation to date into the recent bread price war, my first objective was to establish whether Dunne's Stores or any other competitors were selling bread below net invoice cost in breach of the provisions of the Restrictive Practices Grocery Order, 1987. I was quickly satisfied that there was no such breach and that bread sold retail at 35 pence was being invoiced to the retailer at 35 pence or slightly less.

Of course bread is now being sold at 39 pence for a large sliced pan.

The next charge was in relation to predatory pricing and I am concerned about this. In that connection the director said:

In view of all the foregoing considerations I have to say that I have found no evidence of predatory pricing on the part of Dunne's Stores or the relevant bakeries.

There will be further reports but I want to emphasise that there was no belowcost selling or breach of the order. The director also said that two firms of consultants engaged by him had examined the matter and found that there was no question of predatory pricing on the part of Dunne's Stores or the relevant bakeries.

There is a genuine need for rationalisation but I want to make it clear to the House that in any area of rationalisation there will inevitably be a number of casualties, especially among the less efficient companies. Let us all be clear that rationalisation causes casualities. This is the harsh reality and there is no point closing our eyes to it. In today's competitive consumer bread market the introduction of new technology, efficient work procedures and an effective distribution system are essential for the survival of the industry. There will be a greater specialisation and the companies involved have concentrated on the sliced pan. However, there is a bright future for those who will concentrate on niche sectors of the market and there are — and will be — considerable jobs in that area.

I want to refer to Odlums because they probably triggered this debate. It is appalling for a company to treat workers and their families in the manner in which they have been treated. They have a very profitable organisation, they have sold the site on which they were running their bakery but they have not made serious and determined efforts — I discussed this with the IDA earlier today — in relation to an alternative site. I invite them to come forward with proposals for an alternative site for a high technology bakery because they owe that to the workers who have served them loyally and the people of Dublin who purchased their products for many years. It is not sufficient for the Odlum company to pull back at this stage into flour milling and to ignore their bakery workers who have served them loyally and whose trade union representative last night said that the workers recognise that in rationalisation and a move to a new plant there would be job reductions. That was a very positive and constructive approach and I congratulate the unions for it. Odlums cannot pass the buck and take the opportunistic approach of a short term bread confrontation to try to hide the fact that they want to walk away from their employees. They should meet their obligations to their employees and if they invest they will be assisted in every possible way by every existing aid of Government. What has happened is a disgrace.

The Minister is passing the buck.

Whatever else happens in relation to bread prices, the role and position of the consumer will be of paramount importance as far as I am concerned.

(Interruptions.)

The sooner the House recognises that the better for all concerned.

The Minister's reply concludes the debate. How stands the motion?

The motion is withdrawn notwithstanding the fact the Minister has not dealt with any of the serious issues.

Does the Minister intend to meet the Odlums group?

I have already made the offer. The Deputy heard me say in this House that all the services of Government will be available to talk to them. I will also be available to talk, to them.

Motion, by leave, withdrawn.
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