asked the Minister for Industry and Commerce when the inquiry by the Director of Fair Trade into the time cost of bread production will be completed; the action he proposes to take if this inquiry discloses that bread is being sold below cost and if the criteria for determining cost will include norms for depreciation of assets which should apply in all bakeries.
Ceisteanna—Questions. Oral Answers. - Time Cost of Bread Production.
7.
I expect to have very shortly the final report of the Director of Consumer Affairs and Fair Trade into the cost of production of standard sliced pans in a modern bakery.
Powers of prosecution in relation to any breach of the Restrictive Practices (Groceries) Order, 1987, which prohibits, inter alia, below cost selling of bread, are vested in the director. Any breach of this order would be prosecuted by him.
The cost structure of bakeries, including depreciation, would vary from one to another.
Will there be standard criteria for judging cost or will it be judged in respect of each individual bakery on a separate basis?
I will have to wait to see what the report contains. I am due to receive it next week and I will then be in a better position to answer the question.
Is the Minister aware that some of the smaller bakeries who are adversely affected by the bread price war feel that some of the bread sold at a relatively low price is from plants where normal depreciation does not apply because the funds in question were not borrowed, which is the case with other bakeries? Will the Minister agree that this gives an inbuilt advantage in relation to prices? Will he indicate if the criteria under which the examiner is working are such that there will be a standard measure of cost across the whole industry or will it be judged, under the existing rules, on the basis of a bakery by bakery?
On the question of funding, further accusations have been made in relation to some of the bakeries and I want to assure the House that the bakeries which have been the subject of a lot of recent publicity received no grants from the IDA. The director, having carried out his initial examination which produced no evidence of a breach of the groceries order by the multiples concerned, said that there was no basis upon which to institute a prosecution and found no evidence of predatory pricing on the part of the relevant bakeries. However, after the initial investigation he decided that it would be appropriate to undertake an investigation into the true production costs of an 800 gramme sliced pan which would enable him to establish the price at which an economic return can be made from the production of bread. He said that all factors would be taken into account.
Is the Minister satisfied that there is an adequate definition of what constitutes bread in terms of its ingredients and so forth, given the allegations that some of the bread which is being sold below cost does not conform to all the norms in terms of moisture and protein content which other bakeries consider normal?
That point was raised last week in the Adjournment Debate and, as the Deputy will recall, I said it was essential under EC Regulations for the contents to be shown on the packaging. There are various qualities of bread but that applies to clothes and many other areas.
How can the Minister decide on the cost of producing——
I must now deal with Deputy Spring's question.