Vol. 514 No. 1
46 Mrs. Owen asked the Tánaiste and the Minister for Enterprise, Trade and Employment when she asked the Competition Authority to carry out an investigation into alleged price fixing or the existence of a cartel in the meat processing industry; if the investigation has been completed; if so, if the findings were reported to her; the current investigations regarding competition in the meat processing industry; and if she will make a statement on the matter. [3648/00]
Neither the Tánaiste nor I have asked the Competition Authority to carry out investigations into the beef industry. I understand, however, that in 1997, prior to this Govern ment taking office, the Department of Agriculture, Food and Forestry requested the Director of Competition Enforcement to conduct an investigation into alleged anti-competitive practices in the beef processing industry. I understand this was one of a number of complaints relating to the meat plants received by the director which are currently under investigation by him. The director and the Competition Authority, of which he is a member, are independent in the exercise of their statutory functions.
Quite separately from this investigation by the authority, the Government decided at its meeting on 19 January to establish an independent group to examine the continuing allegations of anti-competitive practices in the beef industry and the alleged failure of consumer prices to reflect reductions in producer prices.
The terms of reference of the independent group are to examine allegations of anti-competitive practices in the beef industry, to establish why there is such a large differential between the producer price and the prevailing consumer price, and to make appropriate recommendations in the matter.
The group has already begun its work. It is chaired by Mr. Kevin Bonner, former Secretary General of my Department, and includes Professor Seamus Sheehy and Mr. Colm McCarthy. The group has been asked to report to the Department by 28 April 2000.
Does the Minister of State accept that if the Tánaiste, on taking office in June 1997, had shown more interest in seeking reports and following the investigation by the Competition Authority into price fixing in the meat industry that we would not have had farmers blockading meat producing factories in January? When in 1997 was the request made to the Competition Authority? Why did the Tánaiste not follow up that inquiry more diligently on taking office? Does she believe changes in the law are necessary to give the Competition Authority more power?
On 13 April 1997 the Director of Competition Enforcement received a letter from the Department of Agriculture, Food and Forestry requesting the Competition Authority to conduct an investigation into alleged anti-competitive practices by meat processing companies. The director wrote to the Minister for Agriculture, Food and Forestry's private secretary expressing concern that any publicity would hinder its investigation by alerting the parties concerned. Unfortunately, the Minister subsequently announced that he had asked the authority to investigate the matter and therein lies the problem.
As the Deputy will be aware, the director first needs a prima facie case before he can obtain warrants to search a premises. It is a pity the Minister publicised this issue because had he not done so an investigation could have been conducted and dawn raids etc. carried out. Where such a scenario emerged in other areas the best approach was not to publicise it. I was involved in bringing in the retailers and multiples and trying to track the price of meat in general from the farm gate via the processors to the shop counter. We have been active on that front. There were some reductions and special offers but that is a separate question. It is a pity the former Minister for Agriculture, Food and Forestry did not do what was requested by the Competition Authority and be silent on this issue, thereby allowing it to get on with its work.
I admire the Minister of State's effort to try to sidetrack the question and blame somebody else. On 30 April 1997 a request was made and the Government took office in June.
The Deputy should ask a question.
Will the Minister of State confirm that when the Ministers for Enterprise, Trade and Employment and Agriculture and Food took office in June 1997 they did absolutely nothing with regard to investigating whether a price fixing cartel operated in the meat processing industry and as a result the establishment of another review group is a fire brigade action? Is there a need to give the Competition Authority further powers given that it seemed to have been absolutely powerless to pursue this investigation since 1997? Has there been an examination of its powers?
The investigation remains open and other avenues are being pursued by the authority. On behalf of the Department I pursued the issue by trying to trace the pricing issue from the farm gate via the processors. I had some concerns about the processors at the time and I discussed them with the Minister for Agriculture and Food. Both our Departments are anxious for the Competition Authority to make a breakthrough but, unfortunately, one must compile evidence in order to establish a prima facie case. Somebody on the inside ideally must reveal what is happening and that is the problem. A programme on this issue was broadcast by RTE last night. The IFA was involved in it and price lists were shown. The issue has been examined in great detail and in some cases prices were similar over a period. One can argue all day about examining lists but it is not enough because a prima facie case is necessary.
Unfortunately, the issue was not handled well but we must move on. The Government has taken two forms of action. It has encouraged the Competition Authority to proceed and has also set up an independent body, chaired by Kevin Bonner. I hope that will give us a fresh approach to this issue because the authority must act within a legalistic framework. In many ways this is a more flexible approach to the issue and let us see how it evolves.
Is the establishment of this extra group an indication of the Government's lack of confidence in the Competition Authority?
The Government is very conscious of the legal restraints within which the authority and the Director of Competition Enforcement operate. It will allow them to proceed on the basis of the law that exists but it is prudent that another approach should be tried. We are not giving up on the original approach but we have every confidence in the independent body as it has acted in regard to other issues, such as alcohol and milk prices. There is no doubt that the system under which it operates has worked and will work. However, another approach was needed to deal with this issue and that is why the Government decided to established the new independent group.
Before proceeding to Question No. 47 I wish to correct a reference I made to the Adjournment earlier in relation to the subject matter of Question No. 44, which was tabled by Deputy Rabbitte. The issue is not on the Adjournment but it can be pursued by way of an Adjournment debate.
