Vol. 518 No. 5
8 Mr. Creed asked the Tánaiste and Minister for Enterprise, Trade and Employment if she has received a report from the competition and mergers review group regarding the operation of the ban on below cost selling in the grocery trade; and if she will make a statement on the matter. [9614/00]
13 Mr. Higgins (Mayo) asked the Tánaiste and Minister for Enterprise, Trade and Employment when a decision will be made in respect of the groceries order; and if she will make a statement on the matter. [11925/00]
26 Mrs. B. Moynihan-Cronin asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on the report of the Competition Authority in regard to the groceries order; when she will make a decision on this issue; and if she will make a statement on the matter. [11965/00]
I propose to take Questions Nos. 8, 13 and 26 together.
I have recently received the report and recommendations of the competition and mergers review group established by my predecessor in 1996. The review group's terms of reference covered a wide range of issues concerning merger and competition law, including the groceries order. Among the many submissions received by the review group on the groceries order was one from the Competition Authority. The authority is of the view that the order should be repealed.
The review group required over three years to examine the wide range of complex issues encompassed by its remit. Clearly I will require some further time to give its extensive report the consideration it deserves. In the interim I intend to publish the report and to meet post-Easter a number of groups, including IBEC, the IFA, independent retailers and a host of others.
RGDATA.
Deputy Callely.
Perhaps the committee of which he is chairman.
When does the Tánaiste expect to make a decision on the groceries order and the ban on below cost selling in particular? Are we talking about one month or six months? The economic case for maintaining the ban is well made. I therefore draw the Tánaiste's attention to the social dimension. In reply to Question No. 6 she indicated that there are 9,000 retail outlets. In the United Kingdom 40% of small towns and villages have no retail food outlet. This is something of which we should be acutely conscious. Many of the 9,000 retail outlets are located in rural Ireland. If the ban on below cost selling is removed there is a danger the large multiples will gain at the expense of small shops in towns and villages which provide an excellent service.
That is one of the issues of concern. There is no point having massive competition for a couple of months followed by very little. That would be most damaging to consumers. I will also have to look at inflationary pressures in the economy and consider what the Competition Authority and the review group have to say. There are different perspectives but all the matters raised by the Deputy and others will be considered. The decision will not be made before the summer.
Within six months.
I hope it will be made sooner than that. It will probably be made in three or four months after we have all met the interests involved and the Government has considered the matter.
Will the Tánaiste meet RGDATA?
Yes.
Is the Tánaiste aware that the order has not acted as a disincentive in attracting large multiples to the Irish market? Competition is welcomed by all those involved in the trade. Is the Tánaiste aware that the multiples have not sought the removal of the order?
One should not just respond to those with a particular vested interest. We have to look at the wider national issues, particularly the impact on consumers and suppliers. Whether a particular vested interest lobbies is not the issue. The competition and mergers review group did not recommend getting rid of the order which bans the payment of hello money which it states should remain. It also requires multiples to publicly display interest or payment terms. The only aspect they said should go, was below cost selling about which people are concerned. Before we come to any conclusions we need to be well informed of all the consequences. I welcome some of the new companies which have come into the market. It will be good for consumers and suppliers.
I invite the Minister to say something to the House about her philosophy on this matter. Does she agree there is a social dimension to competition? I am thinking of Ahascragh.
I never stop thinking of Ahascragh.
Or Kilgarvan.
I may have surprised the Deputy on a previous occasion when I said I was not a complete free marketeer. Competition is a good thing. We see what happened in the airline business. Despite all the disasters predicted, we now have more fares and tourists and cheaper flights.
There is no comparison.
We need the appropriate level of regulation and to enforce it vigorously. There is a social dimension to competition. I would not like to think we would get to a situation where we would have one or two large multiples.
Do other EU members have similar orders to our Groceries Order? Do the allegations that retaining the below cost selling order is anti-competitive and against EU rules, stand up to scrutiny? Could the Minister confirm that no company has challenged this order at EU level since 1987?
Some EU countries have it, but others, such as the UK, do not have it. All groceries are not covered by the order, as the Deputies know. The groceries definition is an old one, so many items which I regard as groceries are not covered by the order.
The concept is good.
One concern is that supermarkets and large multiples would discount one or two items and then limit the volume of items covered by the discounted prices. I am thinking of the luxury items the Labour Party loves and Deputy Rabbitte uses, such as smoked salmon and prawns.
A head of cabbage.
I am a middle of the day man.
Does the Minister agree that in assessing the report on the Groceries Order, account should be taken of the period in the 1980s when the economy of the southern Border counties was devastated due to the loss of trade and commerce to large multiple stores north of the Border and to what one could term North African markets? The victims were the small villages and towns south of the Border where the fabric of the rural economy was devastated. Does she agree that at a time when some commercial vibrancy has returned to those towns, villages and rural areas, commerce and trade should be protected in the long-term against multinational players with huge resources at their disposal?
I agree with the Deputy. Whatever about professional experts giving advice in a particular direction, we are policy makers and while theory is one thing, practice is more interesting. We must look at what might happen as a result of changes that might be made.
Will the Minister take on board that a Joint Committee consisting of members of her party, the Fianna Fáil Party and all the Opposition parties strongly recommended the retention of the Groceries Order. Will she give a commitment to the House that she will not ignore the vital work of a committee chaired by Deputy Callely? The Minister should get on her roller skates and agree with him.
Just because everyone is singing from the one hymn sheet does not necessarily mean they are right. I will bear in mind what the democratically elected representatives in the Dáil wish on any issue.
We are looking at taxis next.
