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Dáil Éireann debate -
Tuesday, 18 Dec 1990

Vol. 404 No. 1

Private Members' Business. - Competition in Food Processing Bill, 1990: Second Stage.

I move: "That the Bill be now read a Second Time." Ireland should never again find itself in a position where one private enterprise becomes so dominant in the domestic marketplace that their collapse precipitates a national crisis. When a private company develop into such a power they behave as if they are immune from the market forces which would put smaller companies out of business. Fine Gael want to see fair competition. This is why we as a party are committed to private enterprise and continue to promote competition legislation.

In February 1989, Fine Gael published an economic development Bill. Section 14 of that Bill sought to incorporate into Irish law Articles 85 and 86 of the Treaty of Rome. In fact we had gone further earlier by proposing an amendment to the Restrictive Practices Bill, 1987, which endeavoured to achieve the same objective. We also published a document known as "1992" which also sought the incorporation into Irish law of Articles 85 and 86 of the Treaty of Rome. These Articles would ban price fixing, limitations on supplies, market sharing and other similar cosy arrangements. Unfortunately, the Fianna Fáil Government of that time voted down that Bill. In the same year the Progressive Democrats introduced the Enterprise (Competition and Consumer Protection) Bill, 1989, which endeavoured to do much the same as our Bill but it was also voted down by the Fianna Fáil Government.

Since the Government came to power 18 months ago we have been waiting for the introduction of new competition legislation. However, despite the fact that the responsible Minister is none other than Deputy Desmond O'Malley, the Leader of the Progressive Democrats nothing has happened. It is very difficult to understand the delay in dealing with this most important issue. I now call on the Minister to allow this Bill to pass Second Stage even though it refers only to the food processing business. I will explain later why Fine Gael are introducing this limited Bill. I ask the Minister not to give us the standard reply, that the Government intend introducing their own legislation, which we will have to wait for.

Deputy O'Malley, and his party, campaigned vigorously during 1989 for more scope for the introduction of Private Members' Bills, something which I totally support, and introduced their own Bill on competition. I find it very difficult to understand why, having had the opportunity in Government, no such Bill has been introduced two years later.

We as a party support legislation which outlaws restrictive practices and anti-competitive conduct in all sectors of industry, trades and professional services. As I stated earlier, we endeavoured to deal with this issue by way of a Private Members' Bill. We have brought forward this Bill, which deals solely with the food processing sector, in response to the recent rescue package announced by the Examiner to the Goodman Group. This package could have serious implications for the Irish beef industry unless steps are taken immediately to avoid possible difficulties.

I do not think anyone is under any illusion that this rescue package is designed to gain the maximum recovery of funds, loaned imprudently in my opinion, by a large number of banks to the Goodman Group, leaving Mr. Goodman with a 40 per cent stake in the company and with the prospect of regaining majority control over a relatively short period of time. I do not make an apology for saying that that is the sole reason this legislation has been brought forward. We prepared this Bill over a couple of days in order to indicate the fears we on this side of the House have in relation to the proposed rescue package which will be going before the courts for confirmation.

If this package is agreed it will mean that the Goodman Group will hold a dominant position once again in the beef industry — it will control 40 per cent of the market. This figure includes Classic Meats which controls about 10 per cent of the market. This dominant position could lead to price fixing and result in excessive profits being made at the expense of the Irish beef producer. The Bill being discussed this evening would deal with this problem by making all anti-competitive agreements, decisions and concerted practices automatically void. In addition, it would make these practices an offence subject to a fine not exceeding £100,000 or six months' imprisonment.

The Bill also deals with monopolies and prohibits the abuse of a monopoly or a dominant position in the food processing business by limiting the share held by any one company to a maximum of 30 per cent of their market.

There are many lessons to be learned from the near collapse of the Goodman Group, not least that it was downright irresponsible on the Government's part to depend solely on Mr. Goodman to develop the Irish beef industry. This was done at considerable expense to the taxpayer, and we are not finished yet. My understanding is that the examiner and the banks are confident of winning the court case resulting from the cancellation of export credit insurance. The taxpayer could then be faced with a bill well in excess of £100 million if the Goodman Group are successful with their legal action in this regard. This is a daunting prospect facing the taxpayer and while I accept that the present Minister for Industry and Commerce did what he thought was fit, right and proper at the time, he was left with a situation which should never have been allowed to develop in the first place.

It is also my understanding that when negotiations took place on the reintroduction of export credit insurance, negotiations took place between the Taoiseach and the then Minister for Industry and Commerce and Mr. Goodman in relation to the sourcing of meat that would be supplied to Iraq. My clear understanding is that the Government of the day were left in no doubt that some of this meat would have to be sourced from outside the country because of the non-availability of meat in Ireland. Despite this, the Government decided to proceed and grant cover to the maximum level which, I understand, amounted to something in the region of £120 million.

On a point of order, without wishing to interrupt or to be disrespectful to the Deputy, he is now engaged in a detailed consideration of different aspects of a very serious claim against the taxpayers of this country in which he is informing the House, and thereby the country, that he expects the Exchequer will lose. I find this quite unacceptable. He is seriously prejudicing the public interest, the national interest, in this matter. I do not accept that it is common gossip that this case being taken against me and the Irish taxpayers for more than £100 million is one that I will lose. It has always been a tradition of this House, perhaps taken to extremes, not to discuss cases between two private individuals which have nothing to do with this House, but here is what I understand is the largest individual claim ever made against the State and Deputy Barrett is regaling us at some length as to why the State is going to lose it.

I think that is quite wrong. He is saying there is an acceptance in the circles he works in, or moves in, that that will happen. That is quite wrong, Sir, and I must earnestly ask you to intervene and put a stop to this. That may be Deputy Barrett's belief but I certainly do not think he should be purveying it around here in this way because it can only be to the detriment of the State. It does not matter to me, personally.

It does matter to you.

I am gravely perturbed about references to matters which are deemed sub judice and I would earnestly appeal to the Deputy to steer clear of that area. We know the case before the court is about to be heard and I would beseech the Deputy not to prejudice the hearing of that case or to reflect unduly on the personalities involved at this juncture.

On a point of order, I am a bit surprised that the Minister has intervened because it would not be right or proper to hold this discussion without at least referring to the matters the Minister objects to.

The Chair is concerned about the sub judice aspect of the matter.

I have no objection to the Deputy referring to it.

Surely, the Minister is not suggesting that we should not mention it on the floor of Dáil Éireann?

No, but a lengthy and prolonged assumption that the State will lose the case is going a bit far.

I respect your ruling, Sir, but it is not my intention nor do I wish to jeopardise any court case that is proceeding. I have read in the newspapers that the examiner in taking into account, as part of the overall package presented to the bankers, the possibility and the likelihood of winning a court case which involves an action against the State for the cancellation of export credit insurance. Part of the package we are talking about involves a sum of money that is likely to be recovered from the taxpayer because of the actions of the State in cancelling export credit insurance.

The Chair is not concerned with what happens——

I respect the fact——

Should I not have cancelled it?

Deputy Barrett, I am not concerned about references to this case outside; I am concerned about reflections on individuals or the danger of prejudicing a case before the courts from this privileged assembly against which outside interests or individuals have no proper redress.

With respect, Sir, I suggest that if you check the record you will see that I did not attack any individual; I just stated facts.

The guidelines are traditional in this House; let them be adhered to.

Of course, but I am stating that part of the package being considered by the examiner for the rescue of the Goodman Group involves a sum of money which could exceed £100 million likely to be won in a court action against the State. I do not deny that the Minister for Industry and Commerce had the right to do what he did. He took his decision and if he took the wrong one he and the Government will ultimately be answerable to this House and the public at large. I did not say any more than that nor will I repeat it.

Another lesson to be learned is that monopolies are bad for Irish business, for the consumer, and can lead to doubtful practices. It is clear beyond doubt that the Government and the Opposition were misled with regard to the ownership of Classic Meats. The examiner is taking into account in his restructuring package the sale of Classic Meats which, it is hoped, will repay a sum of £16.5 million owed to the Goodman Group. Proper competition legislation would have prevented the concealment of the ownership of Classic Meats. The concealing of the facts did nothing for the reputation of Irish business and damaged our image abroad.

It is time that this Government put in place a plan for the beef industry based on the principle that no more monopolies would be allowed to be developed. This plan should recognise the need to develop new markets based on the excellence of the product and the quality of production. The quality of Irish meat and our reputation for a clean environment must be the cornerstone of our drive for new markets. For far too long we depended on sales into intervention and on sales to countries outside the European Community. This policy is extremely dangerous bearing in mind that it depends to a great extent on EC subsidies which are becoming extremely dubious in the context of the current GATT talks.

To help us in our drive for new markets, we must of course accept that we need strong companies capable of competing in the international field. A company does not have to have a domestic monopoly — in Fine Gael's view 30 per cent — to be able to compete abroad. There is no good reason this country should not have a number of efficient food processing companies exporting high quality food products. These companies would be better off putting their profits into marketing abroad than in ill-advised takeover deals or investments in dubious enterprises outside the business they know.

If the Taoiseach and his Ministers had pursued such a policy rather than depending on one individual to develop the beef industry by way of tax concessions, grants and export credit insurance, we would not have witnessed such a crisis. Indeed, my colleague, Deputy Connaughton, who is sitting beside me, would know all about promises in relation to grants following the announcement involving the Industrial Development Authority, the Goodman Group, the Taoiseach, and his Government. This great announcement eventually led to the closure of the Tuam sugar factory on the false assumption that it would be replaced by a meat processing factory. Instead there is a vacant site.

When news of the Goodman collapse was announced in August I called for a full inquiry into the whole affair. That call still stands. The Taoiseach and the Ministers involved have refused to answer the important questions posed by Fine Gael and other Opposition parties in relation to a number of key issues, some of which I have mentioned already. Why were so many tax concessions agreed? Why was export credit insurance reintroduced, despite the fact that other countries had refused to introduce such insurance in relation to Iraq? What discussions took place about this matter and with whom? What understandings were reached? All these questions remain to be answered and the public will not be satisfied with silence on the part of the Taoiseach and his Ministers, who hope that all this will go away if a rescue plan is put in place.

The full report prepared by the examiner may not be made available to the public. This has serious consequences not only for the agricultural sector but for business in general. The misdeeds of one man should not damage the reputation of a country or its citizens as a place to do business or lend money. We still do not know the whereabouts of the £25 million lent by the Goodman group which is the subject of a court case in Cyprus. I read in some articles of the possibility that this money was used for the procurement of arms, which could have serious security implications for this country. These doubts, rumours and allegations should not be allowed to continue. I hope the matter will be fully cleared up once and for all.

It would be foolish to think that the reputation of the beef export business has not been damaged over the past few months. The Government's job is to restore that reputation by developing a sound beef export business involving the producer, the processor and the marketing skills available to us. Farmers must be involved totally and have a say in the development of their industry. They must never again be dependent on a monopoly to purchase the raw material and find markets for the finished product.

While the Bill before us refers only to the food processing sector, it is my opinion that one of the major structural problems in the economy is the prevalence of restrictive practices and anti-competitive conduct in many sectors of industry, trade and professional services. A general ban on anti-competitive practices is in my view the best way of ensuring that the economy will operate in an efficient manner to protect traders and consumers from anti-competitive practices, provide for adequate price competition and more generally prepare this country for the rigorous competition which will be opened up as a result of the Single Market in 1992.

Fine Gael propose to incorporate into Irish law Articles 85 and 86 of the Treaty of Rome. These articles of the Treaty of Rome would then become directly enforceable in the Irish courts as regards domestic as well as international business transactions. Predatory pricing, market sharing and all other abuses of the dominant position in the market would then become crimes in Irish law and the courts would have power to award damages. This would be far more effective than our present cumbersome procedure whereby there has to be a complaint, then an inquiry, a report, a recommendation to the Government, the drafting of an order which has to be approved in the Dáil, and finally action. All this can take a considerable time. This Bill will make such activities illegal from the date of enactment and legal proceedings could be instituted without any of that wasteful process.

One of the best means of enforcement of this proposed legislation is provided for in section 4 (c) of the Bill, that is a remedy to seek damages. The greatest possible deterrent to somebody who may be contemplating a collusive arrangement, a price fixing arrangement or an abusive, dominant position is to realise that if, for example, he pushes someone to the wall it will cost him money. It is only right that the courts should have the power to award damages to an injured party who has suffered as a result of anti-competitive practices.

I sincerely hope it will not be to long befoe the Minister himself brings a Competition Bill before the Dáil which will deal with the areas not covered by the Fine Gael Bill and I can assure him that if and when this happens he will have the full support of this side of the House in having it processed through this House as quickly as possible.

We have a bad history in terms of the development of monopolies. We spoke at Question Time today about trying to achieve a balance between competition, the good of the consumer and the possible development of monopolies. In relation to motor insurance, the PMPA eventually gathered a huge percentage of the market and then found themselves in difficulty. This House had to pass urgent legislation to protect the consumer so that motor insurance would continue to be available. We have seen continual supermarket wars. The average consumer is delighted when prices go down as a result of keen competition between supermarkets. Keen competition is one thing but endeavouring to put a competitor out of business is another. When the Minister is bringing in legislation he must recognise the necessary balance between the protection of the consumer and the protection of jobs in industry. He must not allow the suppliers to supermarkets to be forced out of business as a result of unfair and improper competition.

If this Bill is put on the Statute Book it will give guarantees to the Irish beef producer that the proposed rescue of the Goodman Group will not be carried out on the basis of excessive profits being made at the expense of the Irish economy. The Fine Gael Bill will ensure that (a) there is competition in the sector by banning, on pain of criminal penalties, all collusion or price fixing, and (b) no one group would be able to hold more than 30 per cent of the killing capacity in the beef industry. If the rescue plan goes ahead without proper competition legislation being in place, the Irish economy will have to meet the cost of the rescue of the banks and the owners of the Goodman Group. This is almost as bad as asking the taxpayers to rescue the group. Any rescue should be based on normal profits, not on excessive profits resulting from lack of competition.

I commend the Bill to the House.

There is a story told of the writer, Ernest Hemingway, in his declining years. While drinking in a bar he was approached by a lout looking for a fight. Hemingway's response was to indicate that, at his stage in life, he had few decent bar room brawls left in him and he was not going to waste one on such an insignificant individual as the lout who had approached him. His description of his erstwhile opponent was more colourful, if unparliamentary.

In relation to this Bill I feel similarly. Unfortunately, it is a cheap, cynical and unworthy attempt to attract publicity and nothing more. It is cheap because it is clear that little effort has been put into the Bill. I will demonstrate why. It is clear also because, in the almost half hour that Deputy Seán Barrett spent speaking on the Bill, he scarcely referred to it but dealt instead with a topical matter. It is cynical because competition policy is important and deserves to be treated as such.

——and has been ignored by the Minister's Government.

They have problems.

It is unworthy because, in the past, some of the promoters of this Bill made serious attempts to address the real issue of competition policy. This proposal makes a mockery of that work done in the past by some members of Fine Gael.

Because of its opportunistic nature the Bill is fundamentally flawed. I will deal with these flaws first and then set out the Government's position. Leaving aside technical difficulties I see three areas of fundamental difficulty with this Bill. They are: first, its restricted scope; second, its mechanical approach to market shares and, third, the imposition primarily of criminal, as opposed to, civil sanctions.

The Bill, in its title and content — this is taking the restricted scope question first — deals with just one sector of the economy, namely, the food processing sector. Important as is this sector, it should not be singled out as being the only area of the economy with regard to which competition policy should be reformed. This is the most fundamental flaw in the Bill and arises directly from the opportunistic motives which gave rise to it. Indeed that was borne out in the contribution just made by Deputy Seán Barrett.

One of the defects of existing legislation on competition — the Restrictive Practices Acts and Orders — is that there is a piecemeal approach to problems. While there are orders in relation to the grocery trade and petrol distribution, whole sectors of the economy are not subject to direct control. Collusion, price-fixing and other undesirable anti-competitive practices are quite within the law. At present, in order to regulate them, a lengthy and involved process is required before an order under the Restrictive Practices Acts can be made. I will not detail all of the necessary steps here; that was done very well by Deputy John Bruton in February last during his contribution to the debate on the Enterprise (Competition and Consumer Protection) Bill, 1989, brought forward by the Progressive Democrats, which I was involved in promoting.

——and which are supported.

Knowing what was said then by Deputy John Bruton and which hardly can have been forgotten in the meantime, I am very surprised that an approach based on dealing with particular sectors is now being advocated because he made it very clear then that that would not and could not work. I wonder what sector will come next? I suppose whatever is the political flavour of the day.

The Minister is well practised at it.

That is no way to deal with an issue so fundamental to economic well being as is undoubtedly competition policy. If reform is necessary — and I agree it is essential — certainly it should not be confined to one sector.

It is worth while looking at the implications of the proposed scope of the Bill because, in confining it to one sector, it seems to me, on reading the Bill, it is not just confined to food processing alone; it is confined only to some aspects of food processing. According to section 2 of the Bill the "food processing trade" has the meaning assigned to it by section 25 of the Finance Act, 1987, which section defines "processed food" as:

goods manufactured in the State in the course of trade by a company which—

(a) are intended for human consumption as a food, and

(b) have been manufactured by a process involving the use of machinery or plant whereby the goods which are produced by the application of that process differ substantially in form and value from the materials to which the process has been applied and, without prejudice to the generality of the foregoing, the process does not consist primarily of—

(i) the acceleration, retardation, alteration or application of a natural process, or

(ii) the application of methods of preservation, pasteurisation or any similar treatment.

It is some mouthful, as is the case with definitions, particularly those contained in Finance Acts. However, it is interesting more particularly for its exclusions than for what it covers. It does not include preservation, pasteurisation or any similar treatment. Therefore it does not cover one of the most significant activities of the dairy sector, namely, the preparation of milk for the liquid milk market. Equally it does not cover, for example, the preparation of yoghurt.

The omission of milk sold on the liquid milk market is an important omission especially as far as the consumer is concerned. It is also contrary to the clear impression conveyed in the press release which accompanied the publication of this Bill, which statement made great play of the importance of the milk market. The omission of milk from the Bill now is curious, especially since there is a total and collusive lack of competition in the liquid milk retail trade commented on within the past couple of weeks by the Director of Consumer Affairs who deplores the collusion present in that trade. I would like to add my voice, for what it is worth, to that of the Director of Consumer Affairs in deploring that collusion. No matter where one goes in this country, no matter to what form of outlet one goes, the price of a litre of fresh, liquid milk is exactly the same — in the largest supermarket, the smallest shop or delivered to——

(Interruptions.)

——the door; they are all the same.

There are prosecutions about it.

Please, Deputies, let us hear the Minister without interruption.

The Minister does not know what he is talking about.

Why? Is what I have said wrong? Is there competition in the milk trade?

The greatest competition in the country is in the liquid milk trade.

At retail level? God help the Deputy if he thinks that.

(Interruptions.)

Doubtless Deputy D'Arcy will have an opportunity to speak on this Bill later. In the meantime he must contain himself in quietude. The Minister without interruption.

Likewise, the definition used in the Bill does not include packaging of produce in preparation for retail sale. As a result it would seem to exclude a great deal of food. These are significant omissions arising, I imagine, because the source of the definition is a provision in a Finance Act designed to address issues such as capital allowances and the treatment of grants. This deficiency underlines the lack of thought in the preparation of the Bill.

Even if it is correct to approach competition policy on a sector by sector basis — an approach which, I must make clear, I do not at all accept — it cannot be correct to deal with just one element within that sector. Food processing is an important link in the chain between primary producer and the final consumer. Market behaviour by processors can have an effect on suppliers of raw materials and on consumers, but that is not the complete picture in the food industry. The primary producer does not always deal directly with the processor. Similarly the processor need not deal directly with the retailer. This Bill deals, as I have said, with just one link in that chain. What about the rest? If the fixing of purchase or supply prices is undesirable if carried out by the processor what makes it acceptable for primary producers, wholesalers, retailers or other middle men to engage in such practices? It makes no sense that only the processors are singled out and all the other people involved can go scot-free even if they do exactly the same thing and it is equally damaging and equally undesirable. The idea of trying to apply new competition rules to just part of one sector is quite unworkable. Rather than improving matters it creates obvious anomalies. Competition policy is too serious an issue to be dealt with in such a frivolous fashion.

One of the proposals in the Bill is that, in effect, a ceiling of 30 per cent limit should be applied to any company's share of capacity in either beef or dairy processing. Later on I will deal with the practical difficulty of operating simply on the basis of measuring such shares. For the moment I want to address the principle involved.

I do not believe that it is realistic to fix an arbitrary fixture as a ceiling on the market share of any enterprise in a particular sector. The extent to which competition exists or can exist cannot be decided in the abstract by reference to some automatic formula. It is a matter that requires examination on a case by case basis. The market share held by one enterprise has to be judged in the light of other factors, including the share, actual and potential, of others in the market.

Competition policy is directed at something more than the structures within the marketplace. It is also concerned with behaviour. Most of the provisions of the Bill recognise this to the extent that something close to the provisions of Articles 85 and 86 of the Treaty of Rome appear in 4A and 4B of section 3. These provisions deal with anti-competitive agreements, arrangements and practices and with the abuse of dominant positions. These are essentially issues of behaviour.

Structures do play a part, of course, but only a part. In assessing mergers under the terms of the Mergers, Take-overs and Monopolies (Control) Act, 1978, the market share that would result from a proposal is an essential part of the assessment process, but it is not everything, nor are there handy mathematical formulae that will produce ready answers. The reality of the marketplace is different and much more complex. It is interesting that in applying its Regulations on the Control of Concentrations the European Commission does not apply automatic criteria in respect of market shares.

I would like to turn now to the question of how such an automatic ceiling might operate. As a generous gesture I will assume that there is no difficulty in measuring the share of processing capacity that is held by each company in the sector and that it is plain where the control of each company lies. I might add that these are big assumptions, and I know from practical experience that they are unrealistic, but I am anxious to get to the core of the difficulty with this proposal. Two examples will illustrate the point.

First, from 1 January 1993 companies will be free to trade across national boundaries within the Community. This has increasingly become the case already. If the size of operation that would be viable in that Community market, with more than 340 million consumers, is such that it would exceed 30 per cent of the processing capacity for the sector in Ireland, are we to condemn that sector in Ireland to failure by limiting it to a size that means it cannot compete in Europe or the world at large? That would be absurd, but that is what is proposed in this Bill.

It is. Let the Deputy read it. It provides that 30 per cent shall be a monopoly.

That is a simplistic approach and the Minister knows it.

I am afraid the approach in the Bill is simplistic. The Deputy should read the Bill. That is the way it is. It is absurd but unfortunately that is what is in the Bill.

Native sourced material.

Native sourced?

Sourced in Ireland.

Beef and milk presumably are sourced in Ireland are they not? If you have 30 per cent of those you are not out of business.

Not necessarily.

(Interruptions.)

Would Deputy Connaughton explain to the House how you are not out of business under the provisions of the Bill?

Deputy Connaughton should await his opportunity to contribute. In the meantime——

I would hate to deprive the Deputy of his opportunity to explain to me if I am wrong. Of course I know I am not wrong. There is the Bill. Would the Deputy like to explain to me how if you have 30 per cent you are not out of business?

You are trying to cover up for your lack of action in the last 18 months.

Let the contributions be made through the Chair.

The Minister brought in no legislation, that is the trouble.

We will see the Minister's when it comes in.

He is more arrogant by the day.

I am pretty grateful to Deputy Connaughton. He is allowing me to continue.

The pre-election agreement seems to be great.

The Minister wants a scriptwriter as well to take the sarcasm out of his scripts.

We are fairly touchy, are we not?

I hate hypocrisy.

Let us not inject personalities into the debate.

(Interruptions.)

Please, Deputy Barrett. The Deputy made his contribution virtually without interruption of any kind.

He was seriously interrupted by the Minister.

It is very hard to take hypocrisy.

The Deputy is free to leave if he does not want to listen to me.

More arrogance.

Secondly, take a sector evenly divided between four companies. Each has a share of 25 per cent of the capacity. One of the companies closes. The reason for its closure does not matter. It could be a matter of losing a licence or its premises going on fire. Am I, then, as Minister for Industry and Commerce, to order that each of the three remaining companies who now have 33 per cent of the capacity are each to divest themselves of some of their capacity because of what has happened? What if they have only one plant each? What happens when the fourth company rebuilds its plant? Again this is absurd and so divorced from reality as to defy belief. One could not order the companies concerned with one plant each to close down in order to comply with the requirement set out in this Bill. This particular provision is totally unacceptable and undermines whatever value lies in the remainder of the Bill.

This Bill provides for both criminal and civil sanctions. In the United States criminal sanctions are available in respect of offences of the type envisaged here. However, the pattern within the European Community is for civil remedies. The Enterprise (Competition and Consumer Protection) Bill, 1989, which was debated here last year followed this pattern. It provided for civil sanctions only. It was not confined to damages being awarded, as this Bill is, but also provided for injunctions to be granted. This is an adequate range of remedies to deal with relationships between businesses and between them and their customers.

It does place on onus on the people concerned to decide what really affects them and to what practices they should give priority in taking action. That is the way it should be in business. There may be a need for some authority to provide support but the emphasis should be on people relying on themselves.

The over reliance of this Bill on criminal sanctions is a mistake. It may be worthwhile for a business to risk a fine being imposed if the likelihood of conviction, requiring proof beyond reasonable doubt, and the level of the fine is much less then the excess profits to be obtained.

The full range of civil action is a better option. In certain cases on injunction may be far more valuable than an award of damages or the imposition of a fine. This element of the Bill requires a fundamental rethink.

The other point that occurs to me on looking at the criminal sanctions that are included in the Bill is that it is not made clear whether or not the offences created are to be regarded as indictable offences or summary offences. In the absence of the statement to the contrary I presume one would have to assume they were indictable offences which would have to be tried before a jury. So far as the penalties are concerned the six months imprisonment certainly would be well within the limits of the District Court and of a summary conviction, but the proposed fine of £100,000 would be rather beyond that. Unfortunately, the Bill does not make it clear what type the various offences are. In those circumstances it would probably be impossible to prosecute.

Incorporating provisions similar to Articles 85 and 86 of the Treaty of Rome into Irish domestic law involves a new and radical approach to competition policy. It involves taking a qualitative leap from a system based on the control of abuse to a system which prohibits anti-competitive activity in general. Such a giant leap which is to change the way we look at problems with business behaviour requires much more than this fashion conscious two page effort loosely stitched on to a piece of existing legislation. It is particularly disappointing to see that this is all that could be produced after a fairly full debate on this very subject in February last year. There are many gaps and omissions and I am talking here about points of substance and not just minor drafting details.

What, for example, is to become of all the existing legislation on competition? Where are the safeguards? Where is the provision for review? What about appeal? Should the activites of the Commission not be made transparent and what about accountability?

To begin with the status of existing legislation, the Bill refers to the Civil Liability Act, 1961, the Finance Act, 1987 and the Restrictive Practices (Amendment) Act, 1987. No reference is, however, made to the Mergers, Take-overs and Monopolies (Control) Act, 1978. Nor is there a reference to the vast body of legislation under the Restrictive Practices Act — namely the Restrictive Practice Orders. Are they to exist side by side with this proposed Bill? If so, surely the Bill amounts to nothing more than just another Restrictive Practice Order for a part of the food processing sector. I thought the idea was to move away from this approach. Indeed, it is difficult to know just what the intent of the Bill really is. It would seem to have started out rather ambitiously but has failed to carry through. Was it a case of cold feet or is a manifestation of the clear opportunism which prompted a Bill with this title at this time.

There is a need to amend existing legislation. This I acknowledge and it is part of the approach we are taking in our competition Bill which will be before the Dáil in the next session. Our existing legislation based on a control of abuse system involves a complex and time consuming process and is a cumbersome way of achieving fairness in business behaviour. It has to follow that provisions similar to Articles 85 and 86 of the Treaty of Rome, if incorporated into Irish law, will require changes in existing legislation and a different approach.

Something which should concern any legislator and which should be built in to any Bill which seeks to regulate behaviour to the extent that is purported in this Bill, are safeguards. The Bill before us gives the Fair Trade Commission the power to make declarations as to the applicability of section 3 which amends the 1987 Act. Without providing for rights of appeal, this surely amounts to giving the Commission extraordinary judicial power. This is certainly not desirable and it amounts to a serious and dangerous omission in the Bill. If this subject were treated seriously it would have been plain to see that the courts must have a role to play in this process.

Another problem which arises with the Commission relates to the status of its declarations. How long do they last for and what happens if circumstances change? It would have been very simple to include some sort of review clause in this section. Yet its omission places such a shadow of uncertainty over the Commission and its powers that I doubt if it could ever be brought to operate effectively following such scant and incomplete guidance.

Compounding the uncertainty is the absence of definition in the Bill. What, for example, is an undertaking? Is it a business, a person, a group of persons? Is it the public sector or the private sector? It is all the more curious that these questions have to be asked now as it appears that a discussion document on 1992 produced by Fine Gael two years ago advocated that Articles 85 and 86 of the Treaty of Rome should be introduced into Irish law and made applicable to commercial activities in both the public and private sectors. Why now shy away from such a bold approach? And if this is still the intention why not make this clear in the provisions of the Bill?

Still on the subject of the Commission, how, we must ask, is it to cope with this new volume of work and additional power? Does the Deputy think that these new duties can simply be subsumed under the mantle of their existing responsibilities? This is naive to say the least. Surely a competition Bill, if it is to approach the problem of prohibiting anti-competitive behaviour in any meaningful way, should contain provisions for a reassessment of the role and functions of the Commission and, if it is warranted, provide for increased resources, powers and facilities. If the machinery for implementing this new policy approach is not put in place then it is futile to argue that anything can be achieved or that anything can be changed.

There are numerous other questions that could be asked about the role of the Commission. What is the procedure for an undertaking requiring an exemption? Should it follow a procedure similar to that established by the EC Commission? Will the Commission be empowered to carry out investigations and what is the role of the Commission in relation to section 3 which amends the 1987 Act? I could proceed but I doubt if I would get any satisfactory answers to these queries.

In summary, it should be abundantly clear to all who are concerned about competition policy that we need serious, reasoned, comprehensive and balanced legislation in this area. This policy area has long been neglected but its importance has come to dominate the agenda at many different levels. The Government have recognised its importance and will very soon be in a position to present their response. The social partners, in the context of the programme for economic and social development, have also seen the importance of competition for stimulating economic activity and thereby increasing employment. We have been reminded at European level that we cannot survive if we do not have the competitive edge. For too long we have sheltered under the protectionist cloak whether this was in the form of subsidies, artificial price controls, restrictive practices or cosy business arrangements.

All by Fianna Fáil.

It is heartening to see the general level of agreement on the desirability of a new conceptual approach to the problems of competition policy. The growing awareness and appreciation of the conceptual problems, even if still flawed and incomplete, can, however, only be welcomed and, although I cannot support and must oppose this Bill, I look forward to a full and thoughtful debate on the Government's Bill during the next session. The definition of the food processing trade, as I quoted it from section 25 of the Finance Act, 1987, includes only trades carried on by a company. As I am sure most Members are aware, much of the business in food processing is not carried on by companies but by friendly societies or co-operatives of one kind or another. This is another omission in the Bill which would have a serious effect so far as its application is concerned.

Deputy Barrett devoted much of his speech to the Goodman problem and various items related to that. It is not appropriate for me to deal with that. I came in to deal with the Bill before me and with nothing else. I do not want it to be assumed that, because I did not reply to some of the matters raised by Deputy Barrett, and in particular the points raised in relation to a court case, I accept in any way what was said. If assumptions are made by the examiner or anyone else in relation to a particular court case I do not accept those assumptions. I regard them as very big assumptions and I will fight them to the greatest possible extent. If the Deputy feels I was wrong, as he suggests I might have been, in cancelling export credit insurance——

I never said that nor did I imply it.

It is time to call another speaker.

The Minister is getting some indulgence on this.

All these things are negative.

I do not accept that the results of this case will be on the lines some people speculate.

I thought we would have a decent speech when the Minister commenced with a Hemingway story which I heard 20 years ago. However, it went downhill from there on which was disappointing.

Despite the Minister's latter remarks that we need serious and reasonably comprehensive legislation in this area, I resent the fact that he does not seem to take this Bill seriously, despite its flaws and weaknesses. That is surprising given his comments in Opposition over the last five years. He portrayed himself as a person concerned about many weaknesses in our competition legislation.

His speech was disappointing to say the least. It verged on insulting to those who drew up the Bill. Deputies in Opposition do not have the back-up of civil servants or the parliamentary draftsmen when drafting legislation. Notwithstanding the difficulties the Minister has with the Bill, I hope tonight's debate will spur him into taking action in this area which, as he said on many occasions, is one which needs urgent attention. I am glad he recognised the fact that we need legislation in this area. Despite his reservations about the possibility of this Bill focusing on one sector of the food processing industry, I do not feel any inhibition because of these remarks. The reality is that this Bill might not be before the House were it not for difficulties being experienced in that area at present.

We support the Bill as far as the food processing sector is concerned. This is very timely in view of the anomalies and weaknesses which have been highlighted in this area. We would like to add to the Bill and improve it. I do not believe that any party can claim to have all the knowledge, wisdom or best ideas on how to deal with reforming legislation and the Bill could do with some improvement. However, the basic principles should be welcomed. If the Government saw fit, we could, on Committee Stage, strengthen the Bill as it deals with competition in the food processing industry.

Unfortunately I do not have any confidence in this Government. Up to the last ten or 15 minutes my lack of confidence was in the Fianna Fáil component of the Government but now I have no confidence in the Coalition accepting the Bill in its present form or even the principles of it. They will see it as a measure aimed at curtailing the monopolistic tendencies of a small number of entrepreneurs, particularly in the beef sector. The history of Fianna Fáil in Government, particularly since 1987, suggests that their primary interest has been to facilitate and encourage those monopolistic tendencies. In the course of the past six months we have seen the disastrous results of this policy.

As this Bill is aimed at removing the possibility of a monopoly in the beef processing sector in particular, I will confine my remarks to the fall-out from the Goodman affair which, after all, provided the principal impetus for this Bill.

In a previous debate I spoke about the necessity to clean up the beef industry in the interests of workers, farmers, consumers and the country generally. We are now facing a situation where a large number of foreign banks, with little or no interest in our economic development, are on the verge of becoming major players in the beef processing sector. For that we have to thank one Mr. Larry Goodman. It has become a trite and convenient argument advanced by most lobbies on behalf of the Goodman Group that the banks are entirely to blame for the debacle we witnessed last August. In this House the Taoiseach gave credence to that propaganda in his dismissive references to bankers and the attitude of bankers towards business. The truth is that Ireland as a small trading economy must be able to hold up its head and assert that in all its business dealings, including its dealings with banks, it has behaved honourably. We cannot make that assertion in respect of the Goodman fiasco. It bears repeating that that fiasco was caused by the decision of one man and his advisers to mislead banks quite deliberately about the purposes for which money was borrowed and spent. If most of the rest of us did that in our dealings with banks, we would have spent the last six months defending ourselves in court against civil actions, if we were lucky, and possibly against criminal charges or fraud.

Instead what do we find? The banks are forced into a rescue plan in which Mr. Goodman will retain 40 per cent of the new business, the banks will hold 10 per cent and the remaining 50 per cent will be placed in trust to revert to Mr. Goodman if a certain profit target is met. This is as close to getting away scot free as I have ever seen, especially when Mr. Goodman's personal wealth has not contributed in the slightest degree towards the cost of the restructuring. However there are, in my view, a number of serious obstacles still be to overcome before this agreement can be seen as fitting the letter or the spirit of Irish and European legislation in this area.

I have today written to the Minister for Industry and Commerce to outline my views on the agreement which will be before the High Court tomorrow. I would like to take this opportunity to read that letter into the record of the House because I believe what must be paramount in any consideration of the latest developments in this case is what our Constitution calls the exigencies of the common good, and what we often refer to in this House as the national interest. The letter states:

Dear Minister,

I understand that you will be considering the Goodman re-structuring under the Mergers, Takeovers and Monopolies legislation of 1978 and 1987. I am accordingly taking this opportunity to express to you a number of concerns that I have in relation to this whole matter. As I understand it, the relevant legislation gives you the power to refer this matter to the Examiner of Restrictive Practices for examination and report under a number of headings. These headings include inter alia:

—the extent to which the proposed merger or takeover would be likely to prevent or restrict competition or to restrain trade or the provision of any service;

—the extent to which the proposed merger or takeover would be likely to affect employment;

—the interests of shareholders and partners in the enterprises involved;

—the interests of employees in the enterprises involved; and

—the interests of the consumer.

In addition to the various matters which must be considered by the Examiner on your referral, the Act of 1978 also empowers the Minister, "if he thinks that the exigencies of the common good so warrant" to prohibit a proposed merger or takeover absolutely or to lay down conditions for such merger. Having regard to all of these provisions and, in particular, the responsibility vested in you to ensure "the exigencies of the common good" I would like to make the following points:

1. Serious question marks continue to surround aspects of the operations of this company prior to the re-structuring. In particular, it is my understanding that the security and intelligence authorities of several countries are investigating the provenance and purpose of a loan, the proceeds of which are lodged in a Cyprus bank and subject to a number of legal actions.

2. The principal suppliers to this company (i.e. beef producers) have a moral right to be satisfied that prices for their product will not be artificially controlled in order to facilitate the making of excess profits to finance the re-structuring.

3. The trade unions seeking to organise workers employed by the company have been continuously rebuffed (and in fact only succeeded in meeting the Examiner of the company following a threat of widespread industrial action). Conditions of employment in the company are very much inferior to standards commonly regarded as acceptable throughout industry.

4. It is understood that there is no intention of securing any contribution from the personal wealth of the former proprietor of the company towards the cost of the re-structuring.

A number of other issues also arise, and in my view they too are fundamentally important. The first of these arises in connection with recently enacted European Community merger and takeover legislation. Council Regulation No. 4064/89 (21st December 1989) on the Control of Concentrations between Undertakings entered into force in this country on 21st September 1990. On my reading of the regulation, its provisions appear to apply to this case.

Under Article 4 of that Regulation, concentrations with a Community dimension "shall be notified to the Commission not more than one week after the conclusion of the agreement, or the announcement of the public bid, or the acquisition of the controlling interest. That week shall begin when the first of these events occurs." In this case, it would appear that the first event to occur was the agreement between the banks, Goodman, and the Examiner, and that the one week deadline has therefore expired. Responsibility for notification rests on all parties to the transaction.

Third parties with a sufficient interest in the agreement (in this case both farmers and employees would surely feel that they qualify) are entitled to be heard before the Commission before it arrives at any conclusion. An important aspect of the notification procedure is that it enables a member state to complain to the Commission that a concentration threatens to create or to strengthen a dominant position as a result of which effective competition would be significantly impeded on a market within that member state. It is a matter for the Commission to decide whether to take action under the regulation. The point is that the agreement should be notified to the Commission in order for it to make up its own mind, and that once the concentration has a "Community dimension" the obligation to notify arises. Finally, in this connection, a copy of any notification sent to the Commission should be sent to the competent authority of the member state, (in this case, yourself) within three working days and the Commission is obliged to carry out the procedures under the regulation "in close and constant liaison" with the Minister.

Arising from this, it seems to me, there are certain questions:

—whether to your knowledge any notification of the agreement reached between the Goodman Group and its creditors was made to the European Commission pursuant to EC Regulation 4064/89 within the one week time limit provided by that regulation;

—whether a copy of any such notification has been received by you from the Commission;

—whether an opportunity will be given to interested parties to make representations to the Commission.

The third area in addition to "the exigencies of the common good" and the European dimension, which needs to be considered, is the City Code on Takeovers and Mergers.

As you are aware, this code is issued by the Panel on Takeovers and Mergers, a body consisting of representatives of the Bank of England and a series of British professional bodies. There is no representative of any Irish body on the Panel — however, because the London and Dublin Stock Exchanges are linked together, the Panel exercises jurisdiction in the Irish Republic as well as in the United Kingdom. The Code does not have the force of law, but all persons professionally concerned with the securities markets are obliged to comply with its provisions. The Code applies to all offers for companies listed on the Stock Exchange which are resident in either Britain or Ireland.

The purpose of the Code is to regulate "offers" whereby "control" of a company is to be obtained or consolidated ("control" in this case means a holding of shares carrying 30% or more of the voting rights of a company).

Following the vote in favour of the rescue plan by the banks, Mr. Larry Goodman will retain a 40 per cent shareholding in the new business, while the banks will hold 10 per cent. The remaining 50 per cent will be placed in trust and will either revert to Mr. Goodman (if certain profit targets are met), or to the banks. The banks therefore could potentially end up holding 60 per cent of the company.

The holding company in this case, Goodman International, is a private company to which the takeover Code does not apply. However, one of its subsidiary companies, Food International plc, is a public company. Depending on the precise details of the proposals accepted by the banks, it may well be that an offer is being made for control of at least 30 per cent of that company, within the meaning of the Code. If there is doubt on that question, it is one to be resolved by the Panel.

The major rule of the Code which would be relevant to this case is Rule 9. This provides that where a person, or a series of persons acting in concert (such as a group of banks), acquire shares which carry 30 per cent or more of the voting rights of a company, he or they must extend offers for all the remaining equity share capital, at a price which may require to be adjudicated upon by the Panel. The Panel is entitled to waive this obligation in circumstances which seem to it to be appropriate.

The question this must give rise to in your consideration of the Goodman case is whether or not your Department has considered the question of the applicability of the City Code on Take-overs and Mergers to the Goodman proposals. If so, you must be satisfied that the provisions of Rule 9 of the Code (already set out above) have been complied with.

I would appreciate if the Minister would take the opportunity of this debate to clarify the questions raised, which I believe are very important. It will be clear from the contents of that letter to the Minister for Industry and Commerce that it is not my view that the interests of the common good will be well served by allowing this take-over to go through. The Minister has, as I outlined, a number of options; he can refer the matter to the examiner of Restrictive Practices; he can reject the agreement or make it subject to conditions; he can ensure that it is referred to Europe or he can insist that it be made subject to the take-over panel rules. He must exercise these options in respect of this agreement. I would welcome the Minister's comments in relation to clarifying his attitude as he has not spoken in this regard since the announcement of the agreement by the banks.

The agreement is in the interests of only one person. It is not in the interests of people who depend for their livelihood on the production of beef; nor is it in the interest of those who are at present employed under, sometimes, very dubious circumstances in this industry. I do not even believe that it is in the long term interest of the banks involved and that there will be any protection in the agreement for them in the event of another debacle like the one we witnessed last August.

In the context of the Bill the Government have missed a very significant opportunity to bring about an improvement in this area. When we debated the Companies (Amendment) Bill last August in an emergency session, there was a very clear understanding in this House — and outside it — that we were buying time and facilitating the orderly dismantling of this business with a view to putting something better and more creditable in its place in the medium term. That opportunity only exists if the air of short term crisis in the beef industry can be dispelled. In particular, the opportunity is only there between killing seasons. The Government, instead of embarking on the restructuring of the industry to take account of new conditions in the market as well as in the manufacturing end, have given the time to restructuring Mr. Larry Goodman instead. It is regrettable that the Minister for Industry and Commerce, in particular, who made his strong views known to this House in the past two to three years, has missed the opportunity to restructure the beef industry.

The Bill before the House again affords an opportunity to the Government to restructure the beef processing industry because there was a debacle, despite promises, press conferences and a launching of a major private sector company by the Government and, indeed, in association with the Government, over the last couple of years. It has all come to nought. Not only that but the whole of the Irish beef processing sector has been brought to the brink of a major disaster and many people will regret the failure of the Government to grasp the opportunity which presented itself, albeit in very unfortunate circumstances, over the last couple of months. It appears that the Minister for Industry and Commerce has lost his nerve in relation to the statements made in this House over the last two or three years.

The Bill is worthy of debate within this House and of acceptance on Second Stage. As I said at the outset, there is room for improvement but I do not think anybody who has ever presented a Bill to this House would attempt to claim that this Bill has all the answers. It is regrettable that the Minister — and, indeed, the Department of Industry and Commerce — seem to consider this Bill unworthy of improvement or serious debate, from the comments the Minister made.

I propose to share my time with Deputy Browne of Wexford.

This proposal must have the agreement of the House. It is agreed? Agreed.

On the face of it this Bill seems to be designed to help the food industry. However, if the Bill is enacted as it stands I very much doubt if any benefit will accrue to the food industry. The purpose behind it is not to help the food industry but to gain short term political advantage for a political party and their newly elected leader.

The Bill was circulated some time ago.

The Bill looks exclusively at one sector and that is not the way to do it. We must look at every link in the chain from production and processing to marketing.

That is not what they are saying at the marts.

There are a number of progressive industries in the country and some of the most progressive are in my constituency. They concentrate on an integrated approach but this Bill adopts a negative approach. It is not in line with the attitude we should be adopting in our preparation for the Single European Market. All right thinking people know how important the food industry is to this country; its development is a major part of Government policy to increase employment, prosperity for farmers, processing workers and marketing staff. All these people, and many more, dpend on it.

There are shining examples of success in that industry. Two in my constituency are beacons, the poultry and the mushroom industries. There are many similar examples throughout my constituency. There are many industries in Cavan and Monaghan based on processing by competent factories of the products of hard working farmers in the area. It would be a pity if my constituents were misled by this Bill into thinking that it would benefit them.

The food industry needs all the help it can get from State sources and, above all, it needs a steady economy, very low — or nil — levels of inflation, good employer-labour relations and Government finances to be on a sound basis. Since 1987 all those conditions have been developed by the Government and that must be admitted. It is a pity the Government of which many of the speakers tonight were members in the years 1983 to 1987 caused so much damage, through their irresponsible policies, to the economy. One only has to look back at the levels of Government borrowing which were a constant millstone round the necks of our people to know how irresponsible they were.

There were high levels of inflation during the years of that Coalition Government. What kind of help was given to the food industry during those four years?

We got inflation down to 3.5 per cent.

We all remember the 1983 budget when practically every development aid to farmers was withdrawn.

The inflation rate was 9 per cent in November 1986.

I was very glad to hear the clear explanation of the Minister for Industry and Commerce regarding the intentions of the Government on legislation covering all aspects of trade, which we look forward to implementing in the new year. If this Bill is to be taken seriously, as I have no doubt speakers opposite wish, I suggest they accept what the Minister said about incoming legislation and withdraw the Bill.

We are a long time waiting for it.

We have more important matters to discuss than this Bill.

Larry is up and Deputy Leonard wants to keep him there.

I wish to comment on section 3 of the Bill which talks about controls by a company or companies of more than 30 per cent of the total processing capacity in the beef or dairy sectors. Speakers on the far side kept talking about beef but they forgot about milk and the dairying sector. Of course, it was embarrassing for them to mention the dairy sector.

How was it embarrassing?

Recent events in the beef sector gave rise to this section and indeed to the Bill. There will always be problems in any industry which gives an excessively large amount of control into one person's hands. However, I wish to remind Deputies opposite that that is not necessarily bad. It only becomes bad when the dominant position is abused. This Bill seems to give no discretion to the Minister. The proposed section 4D states that if a company, or a group of companies, controls more than 30 per cent of the total processing capacity in either the beef or dairy processing section the Minister shall by order require that company or group of companies to sell, within six months of the making of such order, such plants or processing facilities as are necessary to reduce the share of the processing capacity to below 30 per cent of the total processing capacity.

This Bill is not operable. The Minister mentioned the serious situation which could face a number of industries if they were divided up. This Bill does not allow any discretion to the Minister. Is that sensible? Have the Deputies opposite given any thought to international markets with whom we will be competing very shortly? Have the Deputies opposite never heard of 1992 and what it means?

They know what it means now.

There could be an Irish company or a group of companies with 31 per cent of the total capacity operating successfully with great benefit to producers and employees generally. I would always advocate that the ownership of trading and processing facilities in agricultural products should, to a large extent, be in the hands of farmers or farmer co-operatives. Before I came into the Dáil I helped to build up a co-operative which is very successful now. Since I came to the Dáil I have tried to ensure the development of all possible industries in my constituency. I am satisfied with how those industries have prepared for 1992. They looked at every aspect of industry from production to marketing. This Bill confines us to competitiveness in processing.

It is well to recall that from 1983 to 1987 I harassed the Coalition Government to implement measures suggested by the EC to break down barriers, to get rid of the monopoly which the Dublin District Milk Board had since the thirties. The Government reacted against that suggestion at all times.

When was it done, Jimmy?

As soon as Deputy O'Kennedy became Minister for Agriculture, he ensured that the dairies throughout the provinces could sell milk in Dublin. Until then the provincial dairies could not come to the city but the city dairies could go to the provinces and reduce the price of milk leading to uncompetitiveness in the provinces. The provincial dairies are at the moment building a strong distribution base.

This is a time to instil confidence in the meat processing area. The difficulties of the industry are not of our own making. Most of the difficulties are outside our control. They relate to Iraq and Iran, to disease problems and so on. These problems have been amplified to our disadvantage.

Deputies opposite referred to monopoly in the meat area but I notice that few people have moved in to invest money in this area in the past six or eight months and I do not know whether they will in the future. We need to develop this industry. We need commitment and good labour relations. In my constituency we have an adequate, adaptable labour force and much could be done there. In County Monaghan, we produce two thirds of the eggs for the Twenty-six Counties, half of the broilers, 90 per cent of the turkeys, and 100 per cent of the ducks, quail and pheasants. These industries have been built up in an overall way.

Nobody has a monopoly there either.

There is not a monopoly because these industries are based on a very solid structure.

We should concentrate on providing skills in our VECs. We should recommend classes in food hygiene, food treatment and general hygiene standards to prevent disease and ensure that we can continue with disease free status.

In the mushroom industry in Monaghan we have an example of a well structured integrated approach, from the manufacturing of the growing tunnels to the manufacturing of compost to the purchasing of mushrooms to supply the British fresh market, to the mushrooms which are not of the first quality and which are processed and sold on the European market. The whole mushroom industry has been developed from A to Z. That is the type of approach to take and not the sector by sector approach advocated by the people on the other side. It is important to have an integrated approach.

There is great employment opportunity in the food sector. It should be developed further. We have to compliment our food processing industries on their initiative and enterprise in product development which is a very expensive area. The industries from their own resources have developed products very effectively.

I referred to mushrooms and poultry which have been developed. On the radio a few days ago, a young Irishman who had gone to work in a German factory was featured. He returned to Ireland and set up in Clones, recruiting all his own staff in the 18 to 20 age bracket and training them. He has built a small factory employing 70 people. He will be increasing employment to 85, and he has a £5 million turnover. These unique "Billy" products were featured on radio and television last week. The designs on the meat comprised various animals and so on. This made the meat very attractive to youngsters. This is an example of where a young man with initiative — in this case the person concerned came from a family who had been involved traditionally in the dairy industry — has a £5 million market exporting sausages to Germany.

This Bill will help him.

Or change the shape of the sausages.

I am pointing out that every aspect of production from the farm to the factory and to the supermarket, transport, etc., was examined.

We agree with you. What part of the Bill will prevent you doing that?

That is a sectional Bill which deals only with one area and for one purpose.

It will not prevent people marketing and doing research.

We cannot be cackling across at each other. Deputy Browne has 13 minutes and I would remind him to address the Chair.

(Wexford): I always respect the position of the Chair. I would like to remind Deputy Leonard that the mushroom industry started in Wexford and that we sent a Wexfordman, Mr. Howlin, to Monaghan to start the mushroom industry there.

We did not hold that against him.

There were mushrooms growing in my back garden 13 years ago.

(Wexford): It is a pity Deputy Barrett and his party did not go for a more wideranging Bill to deal with competition in different industries and monopolies.

It was emergency legislation.

(Wexford): He has been very selective in the legislation he has introduced. It is a pity it is being introduced on the basis of getting at the Goodman Group rather than on a proper legislative basis. A Bill which deals only with competition in the food processing industry does not go far enough. There is a number of industries in Wexford which deal with food processing; among them are Slaney Meats — they provide 300 jobs — sheep processing and value added cooked meats, and Halal also deal with sheep processing. This industry, despite the problems of the last six months, have made tremendous strides over the past decade. The food industry is a major component of our exports. It is geared reasonably well to deal with and to compete on the European and world stage in the years ahead. To single out the food processing aea as the one that needs a Bill to deal with competition is not on.

Food processing is an important link in producing food for the consumer. One cannot deal with food processing in isolation because as the Minister stated, other areas need to be looked at. In many cases the processor is not the person who deals with the farmer — there are many people in between — wholesalers and retailers. In my constituency usually the dealer purchases the product from the farmer and sells it to meat factories and the food processors. One could say there is very little competition among the dealers or that a cartel is in operation. That area needs to be looked at, but when one thinks of cartels and lack of competition, there are many other areas that spring to mind solicitors, insurance companies, banks and the liquid milk industry to which somebody referred earlier. There is need for a Bill to examine this whole area and any new legislation must cover all the areas that need to be looked at.

I welcome the fact that new legislation will be on stream to reform the present competition law. As we are all aware, this is part of the Programme for Government agreed between Fianna Fáil and the Progressive Democrats. The Minister has given a commitment to introduce legislation in the next session to deal with all aspects of competition and monopolies. Two years ago we had a very good debate on this topic. Any debate in this House that awakens the need for new legislation in this area must be welcomed. The Minister should proceed as quickly as possible to ensure that the legislation is before the House in the next session.

When dealing with competition and monopolies, one has to look at it from different sides. In the supermarkets at present there is much competition, but who is benefiting? We have had open competition and open warfare on prices. It certainly helps the consumer in the short term but down the road it affects a great many people. When we look back at the bread war of about 12 or 18 months ago, we see that severe problems were caused for the bakeries at that time. In my constituency the £6 voucher has caused severe problems for suppliers to supermarkets in the last few week because pressure was put on them to supply vegetables and other products at very low prices. It also meant having to wait six months for payment and in many cases they were not able to survive. This whole area of competition needs to be looked at.

A Bill to deal with below cost selling was passed but I am not sure it is operating very well when we look at the situation that developed in the supermarkets in the last few weeks. Certainly some of the prices at which goods were being sold involved an element of below cost selling. That puts pressure on suppliers and causes problems down the road in regard to job losses. If we are to look at competition we will have to look also at the effects it will have on small industries and industries which are supplying supermarkets and other large multiple chains.

When open competition on the airways was introduced in the United States many airlines went out of existence. While there was a short term reduction in prices, in the long term it meant a monopoly was created and many airlines were put out of business. We now have a few of the larger airlines charging what they like. I hope that will not happen here.

Hence the need for the Bill.

(Wexford): As I said earlier, the Bill before us should be far more wide-ranging. I would not be particularly opposed to it if it dealt with all the areas we talk about.

Deputy Barrett called for a plan for the beef industry rather than a monopoly. With 320 million people in Europe, and because of the Single European Act, there are new markets to be tapped. What worries me a little — leaving aside the Goodman debacle — is that the leading co-operatives or the leading industries do not appear to be rushing to get involved in the beef sector.

It amazes me that some of the major co-operatives which have been amalgamated and are regarded as big players have not become involved in the beef industry or, as Deputy Leonard said earlier, the pig industry. There must be opportunities for these co-operatives to become involved in the beef industry with the development of European markets and the removal of the barriers in Eastern Europe. I do not think it is good enough for the co-operatives to just continue what they are doing at the moment. Farmers should have a bigger say in what co-ops do in the future. At present it is a case of the tail wagging the dog, in the sense that the directors and chief executives seem to make the decisions for the co-operatives, and some of those decisions are not seen to be in the best interests of farmers, particularly smaller farmers. Farmers themselves are somewhat to blame for this because they have not encouraged the co-ops to get involved in the beef and pig industries or other areas where they can develop.

Reference was made to liquid milk. I do not want to get involved in the argument about Dublin Dairies——

The Deputy is from Wexford.

(Wexford): Even though the price paid to farmers for milk has dropped by 15 to 20 per cent over the past three to six months, this drop has not been reflected by a reduction in the price of milk to housewives. I believe housewives are being ripped off in this respect and both the Minister for Industry and Commerce and the Minister for Agriculture and Food should take a direct interest in this area. There should be some reduction in the price housewives have to pay for milk. I ask the Minister for Industry and Commerce and the Minister for Agriculture and Food to take an interest in this issue.

A direct hit twice.

(Wexford): I want to refer to the Bill itself. As the Minister said, under section 3 the commission will be able to take action against anyone who steps out of line and they will have full judicial powers. If the Bill is to operate fairly surely there should be a right of appeal to a higher court or to the Minister? I am not sure what Deputy Barrett has in mind in this section, but under any system there should be such a right. I ask that that point be clarified.

I am glad to have had the opportunity to participate in this debate. Any debate which deals with monopolies or the lack of competition in any industry is to be welcomed. I hope the Minister will introduce new legislation to deal with this area shortly after the Christmas recess as I believe such legislation is needed.

I wish to give ten minutes of my time to my colleagues, Deputies Bernard Durkan and Bill Cotter.

Is that agreed? Agreed.

I found the contribution of the Minister for Industry and Commerce, Deputy O'Malley, to be extremely negative. I have been in this House for ten or 12 years and I do not think I have ever heard such a dismissive or insulting opening sentence as that at the beginning of the Minister's speech tonight. I do not care who wrote the speech but I want it to go back to him and his Department that I do not think it is appropriate to bore holes in this legislation. We can all do that but it is not needed. I am sure that when the Minister introduces his Bill into the House there will be ample opportunity to do that. We acknowledge, of course, that the Bill is not all-embracing — we never intended it to be. We found that there was a particular problem in the food processing industry which may in the next 48 hours or couple of weeks dictate the prices Irish farmers will receive for their produce for the next seven years. I do not think there is anything wrong in bringing legislation on to the Floor of this House which will not alone deal with the competition aspect in the food processing industry but will also throw light on many other aspects.

In fairness to the Minister, I have to say I believe he has a genuine interest in this industry. As Deputy Spring said, he has the full back-up of the Department, and I assume he has put a lot of time into the preparation of the proposed Bill. However, I have listened for a long time to promises to introduce such a Bill. If the Bill is as important as the Minister suggested tonight I cannot understand why it has taken almost 18 months to introduce it. After all it has been part of the agreed legislative programme of the Progressive Democrats and Fianna Fáil since the last general election and was part of the Progressive Democrats' policy before that, which I remember voting for in the House one night. Therefore people should not think that we were trying to jump the gun by introducing this Bill. The Government have had plenty of opportunities over the past two or three years to introduce such a Bill. There must be a wealth of information in the Department on this issue which means such a Bill could have been introduced by the Minister long before now, and I object strongly to the tone of the Minister's contribution here tonight.

This Bill, which deals with restrictive practices and monopolies in the food processing sector, is of vital importance. Never before has there been such a necessity to create an environment where genuine competition would be allowed to prosper. This Bill is in the best interests of producers, consumers and, in the long term, processors. This Fine Gael Bill fills a void in existing legislation, and the Government would do well to study it line by line before voting it down. It is a genuine honest effort to strengthen the Restrictive Practices (Amendment) Act, 1987, to ensure that a true competitive spirit will be fostered and that all food processors will at least be able to play on a level pitch.

Deputy Browne and Deputy Leonard asked why others in the beef industry do not want to get in on the act. After the announcement of the food processing package by the Fianna Fáil Government two or three years ago which was built around the Goodman organisation, other processors must have felt left out on that occasion and believed that Fianna Fáil wanted the Goodman empire to do the food processing for them. That is the reason they feel left out and are not getting involved.

This Bill will not in any way help lame ducks, far from it. It will gear the food processing industry to capitalise on the vast potential arising from the opportunities which will be presented with the completion of the internal market in 1992. The cornerstone of any modern economy is its ability to provide an effective competition policy. Ireland has much to gain by having an imaginative policy on competition in the food processing industry, as we export 80 per cent of our beef and dairy produce. The agri sector represents 40 per cent of our total balance of trade and is vital to our economy. A properly organised competitive environment is, therefore, vital to get the best value in terms of low cost production, thus leading to competitive market prices for finished products.

In the food processing industry, the primary producer must be protected against excessive profits being creamed off in the processing, marketing and distribution chain. The beef industry is a case in point. Because the vast proportion of Irish meat, unfortunately, goes into intervention and intervention prices for a pre-determined quantity of beef are determined in Brussels there should be no problem whatsoever in ensuring that the producer gets the financial reward that is due to him. It is worth pointing out that in an effort to help farmers in difficult times the concept of buying surplus beef, storing it in intervention and allowing it back onto the market at times of scarcity has always formed a major aspect of the Common Agricultural Policy. However there is no doubt whatsoever that during the past few seasons the primary producer did not receive payments consistent with intervention payment levels; in other words, the beef processors were able to create a cartel arrangement with the result there was little or no difference from one week to another in the quotations offered by the major processors. When speaking about this matter I should make it clear I am referring to the telephone calls which are made on Monday mornings between factories.

It has been alleged given the involvement of one particular group, namely, Goodman International, that there was a conspiracy between all the players in the food processing sector to depress prices to a stage where huge food profits were to be made by processors while farmers suffered losses of up to £50 per head. In more recent times the Commissioner, Mr. MacSharry, and the Minister for Agriculture and Food, Deputy O'Kennedy, have publicly stated that in their view the full benefits of intervention are not finding their way directly to farmers. Indeed, I have a copy of a quotation by the Commissioner, Mr. MacSharry, as reported in the Irish Farmers Journal of two weeks ago stating this. However nothing has been done about this matter and this sad saga persists.

In reply to a priority question which I tabled last week the Minister, Deputy O'Kennedy stated that there was little either he or the Commissioner, Mr. MacSharry, could do and the matter now rests with the Minister for Industry and Commerce, Deputy O'Malley. From what we have heard today, it appears that there is not a lot he can do about it either. What I find most galling is that despite the plaintive request made by the Commissioner, Mr. MacSharry, and the Minister, Deputy O'Kennedy, it appears that in law little can be done.

Back in October 1989, when this rip-off was apparently extremely transparent to all farmers and the factories were having a holiday hayride, I took it upon myself to write to the chairman of the Fair Trade Commission to ask him, in view of the alleged collusive activities being undertaken by the meat factories, if the commission would investigate the allegations. I explained to him that, despite a European Community funded APS scheme which was designed to boost beef prices for our farmers, it had become apparent that the very week this scheme came on stream that the quotations from the factories had been reduced. I also pointed out to him, having regard to the enormous financial muscle of the entire meat processing sector, that if such a formidable pressure group were to act in an internal but non competitive environment the results could be disastrous for thousands of farming families. Furthermore, I asked him to clarify if European Community aid earmarked for beef producers was getting to its destination. I sought an immediate report from the Fair Trade Commission. As the House will appreciate, such a report would have had to be carried out with great haste and almost 50 per cent of cattle are slaughtered in the months of October, November and December.

My worst fears were well founded. In early October 1989 I received a letter from the chairman of the Fair Trade Commission in which he stated:

I refer to your letter of the 18th of October, 1989 in which you stated that it is your intention to ask the Fair Trade Commission to investigate alleged collusive activities by Irish meat factories over the past few weeks. While it would be interesting for the Fair Trade Commission to conduct such an investigation we do not believe we should accede to your request at the present time. We think it is preferable that the Commission should at present concentrate on completing its report on competition law. The Commission is also endeavouring to complete reports on the legal profession, the petrol inquiry and on architects, surveyors and estate agents.

If that was all the Fair Trade Commission could do in the circumstances is it any wonder that this Bill is before us tonight? It is clear that the rip-off continues and will continue until such time something along the lines of this Bill is introduced.

Many farmers understood that the Enterprise Bill, presented by the Progressive Democrats when in Opposition, would have solved many of the problems referred to. That Bill proposed to update competition law by making Articles 85 and 86 of the Treaty of Rome part of domestic law. Fine Gael on that occasion supported the Bill because it would have made abusive monopolies and dominant trading positions an immediate criminal offence. As the House is aware, under the law at present there is only a very limited range of sectors where a prosecution of a criminal offence would be successful and in any event the case must first be identified after a lengthy public inquiry as outlined by Deputy Barrett earlier this evening.

The Programme for Government of the new Government of Fianna Fáil and the Progressive Democrats who came into power in July 1989 contained a specific commitment that legislation would be introduced and, for better or worse, the Minister for Industry and Commerce, the Leader of the Progressive Democrats, Deputy O'Malley, was given the specific responsibility for this legislation. Even though they are now almost 18 months in office legislation has not been introduced even though it has been promised on many an occasion. That is one of the specific reasons this Bill is being introduced in the House tonight.

I put it to the Government, if their public statements on the importance of the Bill are sincere, that they should support it. Perhaps it is only the Minister, Deputy O'Malley, and his colleagues in the Progressive Democrats who are actively promoting the legislation and that the Government feel they are duty bound not to cross some of the well known agri-business figures operating at present. Certainly, they were much quicker and much more attentive in bringing forward the Companies (Amendment) Bill in this House on 28 August 1990 when Goodman International were in serious difficulty. Had the same priority been given to the proposed competition Bill there would be no need for any of us to be in the House tonight.

The Companies (Amendment) Bill, which was introduced on 28 August, was novel legislation by Irish standards. What happened then is now history but we are about to see the final play out of events during the next few days when the court will hear objections from the creditors. Having regard to the figures being bandied about by the newspapers, which I have no doubt are absolutely correct, a number of very important questions must be asked. The success of the entire rescue package seems to depend on very high profit margins being achieved by the group during the next seven years. It has been mentioned that the entire package is based on an annual profit margin of 3 per cent of turnover. Many experts disagree and say that this will be impossible to achieve taking one year with another. If we have another six or seven years like 1990 they might get away with it but they say there is no hope in the world of this happening. It is ironic that when farming is in a depressed state meat factories tend to do well because of the availability of intervention — 1990 was such a year.

If great pressure is exerted by the European Commission next year on the volume of beef allowed into intervention — everybody seems to agree that this is what will happen — extra pressures will be put on the finances of Irish meat factories. If this scenario proves to be correct, many experts believe that this is what will happen, then it appears the Goodman International rescue package can only go in one of two ways. First, greater profits will have to be made and the only way that this can be done is to buy the product more cheaply. If the Goodman Group are able to control 40 per cent of the cattle slaughtered and are in a position to dictate price not alone would the farmers selling Goodman International suffer but everyone else would suffer as a result. Many commentators have been trying to quantify what the outcome of all this will be. Two important figures come to mind from this rescue package. The first is the loan repayment of £134 million together with another loan of approximately £110 million to be repaid over a seven year period. Press statements have indicated that it is the company's intention that greater profit margins, together with greater efficiencies, will ensure that these levies will be overcome and that the company will meet the target.

It is very difficult to understand the logic of this argument. Less intervention available in 1991, and greater priority given to the identification of direct markets, will mean greater costs for all processers which will depress their profit margins. I can foresee that Goodman International will probably kill about 400,000 cattle in 1991. It is possible that, despite the best efforts of the group, there will be an additional cost factor of almost £50 per animal because of bank repayments. This will come directly from the farming community and it could be a huge burden on the group but it could also be an unbearable burden if transferred to farmers. The farmers cannot be saddled with that type of levy, particularly in the worst farming year in living memory.

The entire rescue package is fraught with danger in other ways. The only hope the banks have of recovering their money is by ensuring the rescue package goes ahead. An empty meat factory is as valuable an asset as a garden shed. It is worth nothing to anybody unless it is in business. It would be a sad day for Irish agriculture if these banks had sufficient clout and influence over the other processors to ensure a price cartel. That would be even worse than anything we have been used to in the past. This is an aspect which needs great attention.

If in the light of economic circumstances in some years' time Goodman could not surmount his financial difficulties and was forced into liquidation, could suppliers find themselves in the same position as those who supplied Clover Meats some years ago? In that case suppliers of livestock were among the main unsecured creditors and did very badly. There is need to tighten up the legislation in regard to unsecured creditors.

There is a huge snarl-up in many areas of business life, not only in regard to food processing. Farmers have to take at least 20p a gallon less for their milk this year while the housewife pays 31p a pint, irrespective of how the retailer managed to purchase it. It is the same price everywhere. Clearly there is collusion among the retailers. Cattle are selling at £100 less per head than last year and sheep are at least £15 or £20 a head cheaper, yet the housewife buying meat is certainly paying more than she should when one considers the return to the primary producer. This is what I mean when I refer to competition in the business world. This is the kind of thing we must counteract. This Bill is heading in the right direction and I commend it to the House.

I also support the Bill. I was very disappointed at the reaction of the Minister, whom I have always believed to be a fair-minded person who was well attuned to world events. His was a small and narrow-minded reaction to this Bill. It does not do justice to a man of his stature here and internationally to react in that fashion to a progressive and necessary Bill. When the Minister was on this side of the House from 1987 onwards he repeatedly called, as I and some others did, for the introduction of such legislation in the clear knowledge that developments after 1992 would make it imperative for the Legislature to introduce a regulatory system to protect the consumer and the producer and eliminate abuses.

The Minister stated tonight that he is in favour of competition, implying thereby that people on this side of the House are not. We are equally in favour of competition, but competition works both ways. At Question Time today he was the first Minister to indicate in relation to the GATT talks that it was time Europe stood up to the United States. I thought that was a sign of promise, the first we have seen for quite a time. This made me more disappointed at his reaction tonight. We are all well aware of what is happening in relation to 1992 and of our responsibilities. We have a pivotal role in the food processing area because the greater portion of our economy hinges on agriculture and the food industry generally. It is in the interests of the Government, the Minister and every Member to recognise the importance of introducing in time the regulatory measures necessary for the long term good of the industry, not for the short term benefit of some people who may decide it is to their advantage to proceed in a certain fashion now.

For several years there has been ample evidence of the necessity for legislation of this type. If it had been allowed to continue, we could have found the beef industry being controlled by one person. What would have happened if that had been the case during the past six months? The industry would be controlled by foreign banks. The recent deal will impact first on the producer and then on the consumer. The people who are talking about worldwide competition are past experts at introducing restrictive practices when it suits them. The sooner the better people opposite recognise that, particularly in the context of the GATT talks.

There is need for this legislation. I fully accept the constructive remarks of some Members opposite indicating that it could be improved. Experience has clearly shown the necessity for this legislation. If this Bill, or a similar one, is not passed in the near future the agri-industry will pay a high price. The Minister very strongly condemned the Bill as opportunistic. He has had ample opportunity to produce similar legislation but has not done so. He has also had ample opportunity to consult with his colleague, the Minister for Agriculture and Food, in relation to a national milk agency Bill, which has been promised for the past three years. I hope we do not have to wait as long for the legislation he promised tonight.

As far as I am concerned the proposals for saving the Goodman organisation before us at present appear to present the farming community in particular with one of the thorniest subjects that has come before them for many a long day. It is a topic being discussed widely not only by small groups and individuals but is being aired at meetings generally. Grave concern is being expressed about what will happen, the fear that the banks may well be able to decide the price of beef on the Irish market over the next seven years or thereabouts. It is a grave cause of concern.

That is the reason my party decided to introduce this Bill. Much of the criticism being levelled at it, much of which is airy fairy, to the effect that there is no logic at all in it, contending that its provisions will affect other industries — that kind of nonsense — must be refuted. There is no way it will do so. It was introduced to deal with a specific set of circumstances which arose. Its provisions are intended to protect the farming community from the fall-out of the collapse of the Goodman Group and its putting together again. Indeed it is a symptom of much that is wrong generally with the Irish economy.

Those of us representing Border counties can vouch for the fact that our economy is not in a very healthy state, particularly from the point of view of the importation and distribution of goods. Research has shown that 80 per cent of the goods on our shelves are imported and that the type of importation in which we engage, to a large extent, is monopolistic; at least it bears the traits of monopoly. The result of that is that much of the goods on offer, before taxation, are up to 19 per cent or 20 per cent higher in price than they would be if there were proper competition and control. It would appear we have a lot of single agent importation — which is possibly now illegal — but its traits still exist.

The provision of this Bill are designed to undertake a particular task in a given area. When we look onwards to 1 January 1993, when we will have a united market in Ireland, there will be grave danger — unless we examine the manner in which we conduct business in particular — that much of the distribution of goods may take place from Belfast. That is somewhat off the point as far as this Bill is concerned. However, it must be stated at every opportunity because we representatives of the Border counties know exactly what are the problems in that we deal with them on a day to day basis. In fact that is why the Government were forced to introduce this crazy 48-hour rule.

Another aspect of the whole Goodman business that has worried me enormously is that a prospective exporter to Germany infomed me about three weeks ago that he was endeavouring to develop a market to Germany one and a half years ago; being a German national living in Ireland he was talking to people in Germany. He was talking to the CBF people in Stuttgart. The advice he got from Stuttgart was that he should contact the Goodman International Organisation who would assist him in gaining his market in Germany; in other words, they would do the exporting for him.

The way this Government have acted since 1987 is unbelievable. One of our problems is that we know many of these types of things happen but we cannot prove them; we cannot produce the proof but everybody knows what went on. It is disgraceful that the Government who brought about this position, who intervened on behalf of a single company, are still in power. It is a disgrace that it ever happened. That Government should not be in Office; they should have the decency to leave at once.

I wish to share my time with Deputy Nolan.

Is that satisfactory? Agreed.

I welcome the opportunity to debate this important subject. Within the context of 1992 and the completion of the Single European Market it is vital that all sectors of business and industry prepare for the competitive markets that will obtain thereafter. No sector should be allowed shelter from the realities of such competition. Competition is important for stimulating economic activity and improving efficiency. It is vital that we approach these problems in a well thought out fashion. It is my belief that the provisions of this Bill do not do so, being restricted to one sector only, namely, the food processing sector.

One must ask if the definition of "food processing trade" contained in section 2 is too narrow. What about those people involved upstream or downstream, as the case may be? Food processing is an important link in the chain between the primary producer and final consumer. The primary producer does not always deal directly with the processor. Similarily, the processor need not deal directly with the retailer. What about other sectors of our economy? Are we to legislate individually for each of these sectors? It is my belief that it is impossible to legislate sector by sector because, to do so, would create an enormous amount of paper work and lead to a great deal of confusion on the part of the public generally. Were we to legislate sector by sector what effect would that have on existing legislation?

The provisions of this Bill provide for criminal and civil sanctions whereas the pattern within the EC is one of civil remedies. The over-reliance of this Bill on criminal sanctions is a mistake.

We must ask also whether the provisions of this Bill offer any protection to employees. For example, in my constituency in Wexford, Waterford Foods propose closing a subsidiary, Snowcream, employing 46 people, a profitable company with a good record in industrial relations. Does this Bill make any provision for the employees of Snowcream? For example, the proposed section 4D states that no one company or associated group of companies shall control more than 30 per cent of the total processing capacity in either the beef or dairy processing sectors. What is so magic about the 30 per cent figure? For example, will a company with a 31 per cent processing capacity be prohibited from trading? It may well be that such a company will need that 31 per cent to compete on the European Market. In determining that figure we must ask ourselves whether we are ignoring the effects of imports here.

One outcome of the introduction of this Bill is that it has become clear to all concerned about competition policy that we need serious, balanced legislation in this area. The Bill before us does not constitute the answer to that need.

In his speech earlier this evening I was glad to note that the Minister informed the House that the Government are currently preparing legislation in that area. The Government have recognised its importance and, as the Minister said, will be in a position soon to present their response. The social partners also have seen the importance of competition in stimulating economic activity, thereby increasing employment. Bearing in mind that the second national understanding is being negotiated at present I am sure that all of the social partners are keenly aware of the necessity for such legislation.

One matter warranting serious investigation is the difference between the price being paid to primary producers and the retail prices being fixed by different methods at the retail end of the business. One glaring example of such is the price of milk. We witnessed over the past year and a half the price of milk being paid to dairy farmers reduced by approximately 20 per cent, whereas its price to the consumer has not been similarily reduced. Any Bill to be introduced by the Government must deal with and abolish the disgraceful conduct taking place vis-à-vis milk pricing.

Debate adjourned.
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