Dáil Éireann debate -
Thursday, 25 Jul 1996

Vol. 468 No. 4

Written Answers. - Prohibition of Proposed Merger.

Mary O'Rourke

Question:

810 Mrs. O'Rourke asked the Minister for Enterprise and Employment the way in which his decision to allow the Statoil take-over of Conoco to proceed is compatible with the competition Authority report which stated that even with the imposition of conditions, it would not be possible to overcome a potential threat to the common good; and if he will make a statement on the matter. [15595/96]

Mary O'Rourke

Question:

811 Mrs. O'Rourke asked the Minister for Enterprise and Employment the contacts, if any, he had with the Competition Authority in relation to the Statoil deal; whether the Competition Authority was consulted in relation to the conditions proposed; the Competition Authority's view of these conditions; and if he will make a statement on the matter. [15596/96]

Mary O'Rourke

Question:

812 Mrs. O'Rourke asked the Minister for Enterprise and Employment the reason he reversed his original decision on the Statoil deal. [15597/96]

Mary O'Rourke

Question:

813 Mrs. O'Rourke asked the Minister for Enterprise and Employment the weaknesses, if any, in competition law that have been identified following the Statoil matter; the plans, if any, he has for changes in competition law and mergers; and if he will make a statement on the matter. [15598/96]

Minister for Enterprise and Employment (Mr. R. Bruton)

I propose to take Questions Nos. 810, 811, 812 and 813 together. On 16 July 1996, I made an order entitled Proposed Merger or Take-over Prohibition (Amendment) Order, 1996 (S.I. No. 214 of 1996) which I laid before both Houses of the Oireachtas. The effect of that order is to prohibit the proposed merger on take-over involving Statoil Ireland Limited and Conoco Ireland Limited except on certain conditions stipulated in the instrument.

I believe that the retail motor fuel market that will take shape as a result of my Order will give rise to healthy competition based on price. Under the original proposal, I have well founded concerns that the market would become overly concentrated in the hands of big multinationals and that the consumer would lose out. I am satisfied that the revised proposal significantly reduces market concentration and that we will see ongoing price competition to the motorists benefit. The revised proposal will see the new Statoil market share reduced to just below 20 per cent, compared with over 25 per cent in the original proposal, and Maxol's market share increase to some 15 per cent. As a result of my decision in this matter, there will now be five major players in the motor fuels market in the State — Esso, Statoil, Shell, Texaco and Maxol — compared with three previously.

I asked the Competition Authority for their advice on receipt of the revised proposal. The Authority did not assess it in detail as they regarded the procedure of amending my February order as a matter for me as Minister. They did, however, point to their unease as expressed in their report on the original proposal. As I set out in my order of 16 July 1996, I consider that the exigencies of the common good do not warrant the continued absolute prohibition of the take-over and that it would be unlikely to operate against the common good if effected on the conditions stipulated. Statoil will be obliged to provide me with satisfactory evidence of its having complied with those conditions. In so far as weakness in the law are concerned, it would, generally, be inappropriate for me to comment or draw conclusions on foot of one individual case. I will, however, make my views on the general need for changes in merger legislation known to the competition and mergers review group that I will establish shortly. Their report will form a basis for examining changes in competition and merger law.