Ceisteanna — Questions. Oral Answers. - Baking Industry.

7.

asked the Minister for Agriculture and Food if his Department have had any discussions with the bakery industry; if so, the proposals which have been made; and if he will make a statement on the matter.

52.

asked the Minister for Agriculture and Food if he will ask the IDA and CTT to form a task force to assist the Irish bakery industry to protect jobs by (a) rationalising its production facilities (b) specialising in individual plants (c) rationalising its distribution system and (d) developing export markets.

55.

asked the Minister for Agriculture and Food the Government's policy for the future development of the baking industry, especially in light of the decision to appoint a liquidator to the Johnston, Mooney and O'Brien bakery in Dublin; and if he intends to take any steps to try to save the jobs of the 485 workers involved.

99.

asked the Minister for Agriculture and Food if he intends to take any action following the recent announcement of the closure of the Johnston, Mooney and O'Brien bakery; and if he will make a statement on the matter.

I propose to take Questions Nos. 7, 52, 55 and 99 together.

There is considerable over capacity in the baking industry, giving rise to intense competition and narrow margins. The Department of Agriculture are studying the problems of the industry in consultation with the relevant State agencies with a view to identifying ways of safeguarding employment to the greatest extent possible in the industry as a whole. However, it is for the individual firms involved to decide what steps they should take to adapt to present market conditions.

Would the Minister indicate the amount and quality of the wheat being imported for the baking of bread here?

These seem to be separate questions.

They are related.

They may be related, but you are asking very specific questions now.

With regard to my question, No. 99, unfortunately events have again caught up and this is now history. In view of the recent closure of another bakery in my constitutency which was giving a considerable amount of employment, would the Minister not accept that there is now an urgent need to lay down some kind of ground rules or markers within which the industry can operate without allowing some operators to proceed on what appears to be a predatory pricing system, the consequences of which will be the elimination of much of the competition?

I do not have with me the exact figures to reply to Deputy Gibbons' question but I have a figure of 60,000 tonnes for flour having been imported into the country last year. Any additional information he wants in relation to importation of raw materials I can give him.

What were the protein levels?

I will let the Deputy have those figures later. In relation to Deputy Durkan's question, the present rationalisation taking place in the bakery industry has been considered inevitable for some time. There is about 50 per cent over capacity in that industry now. The industry have been advised of this. I have spoken to a number of individual firms in the industry and, together with the IDA and Coras Tráchtála, have made it absolutely clear to them that in the general sliced pan section of the industry there is 50 per cent over capacity. If they want to survive and improve their position in the future, they will have to look at speciality products and meat products. I have pointed out in this House and in the Seanad that you have only to stroll through any supermarket, either here in Dublin or throughout the country, to see the Mr. Kiplings and various other imported confectionery and flour and rape products to see that there are opportunities there for the individual firms. The resources of the State agencies are available to them to make the most of those opportunities.

Particularly with regard to Question No. 55 and in the light of recent events culminating in the loss of 485 jobs in Johnston, Mooney & O'Brien Limited and since there are many small bakeries around the country whose management and employees are very worried about the situation, would the Minister agree that it is important that the Government should have a policy and would he state what that policy is?

I want to emphasise again that the Government have a very clear policy laid out in the documents to which I referred and the industry are well aware of this.

With regard to Johnston, Mooney & O'Brien Limited, I met with the principals of that firm on two occasions to try to solve their problem, on 2 March and 22 March last. Together with the IDA and some financial institutions, they sought a management buy-out arrangement but were unable to come up with a satisfactory package to implement this arrangement and could not proceed with it. With regard to the industry in general, its future development is laid out in "A Future in Food". Additionally, in the document "Supplying the Supermarket", 26 individual products are earmarked for the industry to go after and treat commercially. If they do not do that, I am afraid that there will be additional job losses facing the industry. That has been made absolutely clear to them. The only way of avoiding job losses is for consumers to subsidise inefficiencies within the structure of the industry.

Could I ask a very brief supplementary question?

Order, please. We have dwelt rather long on this question. If the Deputy will be very brief, I shall hear him.

The real crux of the matter arises from below-cost selling. Would the Minister, rather than rationalising, address the problem of below-cost selling to see if his colleague, the Minister for Industry and Commerce, would take action to prevent such practice?

That is a matter for another Minister.

Notwithstanding what the Minister has said regarding competition and rationalisation, may I put it to him that the firm of Bradbury of Athy, County Kildare had undergone quite an amount of rationalisation and in the ordinary sense should have been well able to compete with any kind of competition? In view of that, how does he see the industry developing, considering that the competition may be fair, or may not be fair? If the competition is not fair, would he then be prepared to take any action? I qualify that by saying that the competition could be healthy and open, or could be specifically geared towards eliminating another enterprise from the market-place, with the consequence of opening up the business or monopolising it. In the event of a monopoly resulting in an increase in price to the consumer at a later stage, would the Minister then see his role as intervening to introduce some type of regulations?

As I have said, I am in continuous contact with the bakery and flour milling industry. Unless the whole integrated industry rationalise and become competitive there is a serious risk of loss of even more jobs. It is not so much a question of scale. There is a number of industries and firms in this area who are doing quite well on a relatively small scale of production. For example, Braycot Biscuits, Seery's Biscuits and Kelly's Biscuits. These firms have been established only relatively recently, have identified a market niche and are doing quite well. They are improving and expanding their position. That is the advice I am giving and the direction in which I am pointing the industry. I have no doubt that, together with the floor milling interests, the bakery industry will put their house in order and be able to face the competition between now and 1992.

Question No. 8 from Deputy Pat O'Malley.

But the below-cost selling——

I am sorry, Deputy Hegarty, I want to deal with other questions.