On 3 May the Sunday Business Post declared that the debate on this issue was only warming up. The experience in my constituency, Dublin North, shows the devastation which threatens Irish horticulture. Other communities in which transnational retail giants have taken hold report the death of city and town centre trade, the strangulation of indigenous suppliers, the creation of unemployment and throwing off kilter of sensitive urban development. They also encourage the greater use of chemicals in agriculture to prolong the shelf life of products at the expense of the health of farm workers and customers. Why?
The answer is that transnational retail giants are, by and large, plcs and their aim is to maximise shareholder value. This requires them to put the squeeze on supplier margins, staff pay and conditions and, ultimately, consumer costs. Plcs operate in local economies to extract wealth. The purpose of the small trader or family grocer is to maintain a livelihood as an integral, endogenous part of the community.
Multinational retailers compartmentalise expertise. Local traders are all rounders and are more tuned in to the needs of the community. When a multinational superstore opens small traders are affected through moving from self-employment, through the squeeze on their margins as a result of economies of scale, into the employment of the superstore. The local economy loses diversity, flexibility and durability and the fruits of that person's efforts are extracted as plc shareholder value rather than being available for reinvestment locally.
I would like to mention a couple of organisations which are trying to upset this trend. The SEDA Ireland initiative promotes sustainable enterprise through providing mutual guarantee facilities to members. This should be encouraged and I would like to praise its efforts in the face of huge odds. The MARC action research project in the Roscommon-Mayo area is an alliance of small business interests at community level and it needs to be encouraged.
On the other hand plcs tend to externalise or export the collateral damage. Their means of operating rely upon child labour, environmental despoliation, and, in some cases, collusion with despots. This is done out of sight in another jurisdiction and often in another hemisphere. The Government needs to take action. Even some of the most committed free market economies in Europe have taken decisive action in the face of this growing trend. Britain has planning restrictions favouring city centre development. Spain and Portugal have capped the maximum size of new shopping centres. In France, which used to be synonymous with hypermarkets, supermarket developments over 3,000 square feet require the approval of the regional government. Larger stores require the approval of the national Government. A public inquiry has be held to determine what impact they will have on the local economy and environment and to prove that they will not destroy more jobs than they will create. I could cite many towns throughout the country as examples. Where there were once five or six butchers now there is none following the opening of a large supermarket which may employ one or two butchers. Because the conditions of employment will not be to their liking, having run a family business for generations, these people will leave and look for alternative employment.
The Government cannot sit back and act as an observer. Even in the most committed free market economies in Europe a hands on and proactive approach is adopted to ensure businesses which have been sustained for generations continue to operate and local communities remain vibrant. I ask the Minister of State to adopt a similar approach here.
