Vol. 420 No. 5
8 Mr. R. Bruton asked the Minister for Agriculture and Food if he will outline the way in which his Department came to be involved in meetings where anti-consumer fixing of milk prices was discussed; and if he will make a statement on the matter.
24 Mr. McCartan asked the Minister for Agriculture and Food if he will confirm that meetings between a number of dairies at which the retail price of milk was fixed were held in his Department in the presence of departmental officials; if he will outline his Department's role in this matter; if he considers the holding of such meetings in his Department to be acceptable, especially in view of the findings of the High Court on such price fixing; and if he will make a statement on the matter.
I propose to take Questions Nos. 8 and 24 together.
On 18 May 1990 and 11 January 1991 my Department acted as mediator in negotiations between the National Dairies Association and the Irish Farmers Association at the request of both parties. The question at issue was the size of the reductions in the price to be paid to farmers by the dairies for drinking milk, following upon earlier reductions in the price of manufacturing milk.
The result of the negotiations was a reduction in the price to be paid to farmers of 12p per gallon at the May 1990 meeting and of 5p per gallon at the January 1991 meeting. My Department played no further role other than to let the parties know that it was the Department's expectation that appropriate reductions in the retail price of milk should follow the reductions in the price paid to farmers. In the event, the retail price of milk fell on both occasions by an amount corresponding approximately to the reductions in the price paid to farmers.
My Department were not involved in any fixing of the retail price of milk.
The Minister said that the reduction was in line with the price being paid to farmers but was that just the consumers good luck, or was it a generous gesture on the part of the retailers?
The retailers took their responsibilities seriously. The fact that they were able to purchase milk cheap from farmers meant that on 1 May 1990 the price of milk to the consumer dropped by 1p per pint or 8p per gallon or 2p per litre. On 4 February 1991 the price of milk to the consumer again dropped by 1p per pint.
Can the Minister dictate to the retailers if there is a drop in the price being paid to farmers, that they should reduce their prices accordingly?
No. Both the retail price and the producer price of drinking milk used to be subject to State control, but not any longer.
Is that satisfactory?
Let us progress to other questions.
Should not some provision be made for the Minister to have control to ensure that there is a corresponding drop in the retail price when the price to the farmer falls?
Could we add this in, in the light of the Minister's comments on Common Agricultural Policy reform.
In 1988 the control of retail prices was abolished. In the same year producer price control was effectively abolished when the European Commission decided that such control was contrary to EC law.
