Vol. 541 No. 5
92 Mr. Rabbitte asked the Tánaiste and Minister for Enterprise, Trade and Employment the steps proposed to ensure consumers are not subjected to unjustified price increases arising from the introduction of the euro; if she will consider the introduction of a temporary price freeze to cover the period of the introduction of the euro; and if she will make a statement on the matter. [23181/01]
93 Ms Clune asked the Tánaiste and Minister for Enterprise, Trade and Employment the procedures she has put in place to ensure that unnecessary profiteering does not occur before and following the changeover to the euro. [23291/01]
I propose to take Questions Nos. 92 and 93 together.
The most effective way to ensure the euro does not lead to an increase in prices is to empower consumers to monitor prices. To do this consumers need to be able to compare prices between Irish pounds and euros through exposure to dual pricing. That is the objective of the national code of practice on dual display of prices, which was drawn up in conjunction with the Director of Consumer Affairs. By the commencement date on 1 October last, large numbers of organisations had already signed up to either the national code or to sectoral codes which have been approved under it by the Director of Consumer Affairs. This shows that businesses generally are anxious to carry out the changeover fairly and to be seen to do so. They want to retain their customers' confidence now, throughout the changeover and long after it is over. It is vitally important that consumers realise the power that they themselves have in this area.
The ultimate sanction for any trader who seeks to take advantage of the changeover is loss of business. Should it happen that consumers think they are not being treated fairly and do not get satisfaction when they make a complaint, they will be entitled to take up the matter with the Director of Consumer Affairs. The director will publicly name and shame any trader who displays the logo associated with adherence to the national code, or to the approved sectoral codes, but fails to live up to the commitments involved. A concrete example of the power of negative publicity was provided last month when, as a result of a consumer outcry and concerns expressed by myself and the director, a certain company cancelled its plans to replace its one-pint carton of milk with a half-litre carton. I had been in direct contact with the company following its original announcement and I subsequently welcomed the company's decision to honour its commitments in relation to the euro.
Speaking for the Director of Consumer Affairs, and for myself, the priority is to ensure that the action taken on dual display of prices, as well as the informational activities under way and envisaged by the director, will maximise the likelihood that the changeover to the euro will prove a positive experience overall for the country and its citizens.
Does the Minister of State acknowledge that some businesses and retailers have used the prospect of changeover day to round up prices now? Prices are being rounded up now, not on 1 January or 30 December. Does the Minister of State acknowledge that the case he mentioned, Glanbia, is by no means isolated? The problem is that there are no effective sanctions for any retailer or business that wants to engage in excessive profit taking and who sees the conversion to the euro as an opportunity to do that. The Minister did not address the point in my question about whether he would consider a temporary price freeze until consumers become accustomed to the euro.
The example mentioned by the Deputy is obviously a company that made a serious error. We have a very open competitive marketplace. We have not used price control for some time on a long-term basis, as the Deputy will be aware from his involvement as a Minister. Certainly, my approach and that of the Director of Consumer Affairs is one of giving companies the chance to use this changeover to seek competitive advantage and to treat their consumers well. The code of practice does that. It gives companies the opportunity to show they can be fair and will not cheat the consumers.
The list of retailers and businesses that have signed on is very impressive. In the grocery business, all the big multiple stores have signed on and they constitute about 90% of the grocery trade. Newspaper, cigarette and magazine outlets, DIY stores, etc., are all included in the list of those who have subscribed. Any Deputy who wishes to see the list can get it from the Director of Consumer Affairs.
Our approach is one of putting pressure on businesses so they will behave properly. I agree with the Deputy in thinking that if any business endeavours to use the changeover, which is exciting and should be a positive experience, to gain advantage, it should be exposed. We will be very vigilant.
The Deputy asked about price control. If the circumstances warrant it, I will certainly consider any options open to me. My approach to date, and that of the Government, has been one of encouraging businesses and retailers to behave properly. The vast majority of them are doing that. I have outlined the measures the Director of Consumer Affairs can take if somebody signs on for the logo and then does not honour the commitments required of the system.
The Minister just said the vast majority of companies are behaving in accordance with the established code. How does he know that? Can he outline exactly what inspections or procedures are in place to check on prices?
To date, I have heard anecdotes about prices being raised so that when the changeover takes place, they will be in nice even numbers. Also, I have heard of prices being rounded off. The Minister said that if consumers are concerned, they could make their concerns known to the Director of Consumer Affairs. Are we depending on the consumer to alert the Director of Consumer Affairs or has she additional funding to increase her numbers of inspectors? That is very important at this time.
The Director of Consumer Affairs is conducting price surveys at present and will be reporting back to me. She has been given increased resources by my Department. Additional inspectors were employed during the temporary price freeze on drink prices last year. Those inspectors are still working with the director and they will clearly be working around the clock in the coming months—
Could the Minister give an indication of how many additional inspectors there are?
I think the number has increased to about 20, but I will check it and give Deputy Clune the precise number.
An increase of 20 from how many?
I think there might be six or seven additional inspectors.
Is that nationwide?
Yes. Again, it is important that the consumer, as in any other area of employment law where there are legal breaches, is very powerful and can complain. We cannot have a police person in every corner shop examining prices. When I mentioned companies acting properly, I think we are all aware of retailers and grocery outlets that are using the euro changeover in a positive way and giving their customers additional information and ensuring prices are properly displayed.
The code also obliges retailers to ensure the position of elderly people is catered for, and that of the visually impaired. The pressure and focus is on the retailers. They have to perform.
Deputy Clune has good business experience and knows that it is a matter of competition. The number of retailers who have signed up to the code is impressive. There are still others who have still to sign on and I encourage them to do so. Those who have signed on have made a commitment, and if they do not honour it they will be exposed. To this end, the consumer is all-powerful because, even though we have increased the number of inspectors, this increase would not be adequate without their involvement.
I can only conclude that the Minister of State does not do very much shopping himself.
I shop regularly in Ballinteer, probably as much as Deputy Rabbitte, if not more.
I confess it would be very easy to do more than I do. What the Minister of State said does not reflect the reality of the spate of price increases that has taken place. I have recently been approached by shop workers who tell me that it is known that some of the leading stores in town have been rounding up prices for the last two months in anticipation of the fact that they will not be able to do it on changeover day.
The Minister of State is telling the House that the voluntary code will address the problem. The code is entirely voluntary. It does not have to be subscribed to. Is it not true that our sanctions are worthless in the case of stores and businesses that are not subscribing to the code? The real problem is the lack of any real sanctioning.
How can the Minister of State say that "competition is the answer"? I heard that answer given in the case of Glanbia. How could competition be the answer in Glanbia when 80% of the milk in Dublin is supplied by Glanbia? Is it being suggested that I go to Naas, Bray or Maynooth for a pint of milk in the morning? Competition works imperfectly for a variety of reasons. There is no point in the Minister saying to the House that he will consider the problem. The damage is being done now. Some people are engaged in excessive profit taking in anticipation of the euro. There are no effective sanctions. Is the Minister of State aware of the dual pricing implemented by some hoteliers and publicans, where clearly their conversions are not accurate? The converted prices are rounded off such that the benefit goes to the business concerned.
The Consumers Association of Ireland has highlighted this problem. Apart from appealing to the patriotism of businesses and retailers, what effective sanctions will the Minister of State put in place before it is too late to prevent the con sumer being ripped off as a result of the conversion to the euro?
I am not suggesting that all businesses are engaged in this practice, only some.
The Minister of State is leaving it to consumers. They have to be the watchdogs and cry foul. How does he intend to communicate with the consumers between now and the changeover? Now is the important time. I believe that prices are now being rounded up and the damage has already been done. In many cases, it will be too late.
On the last question, as regards communication with consumers, there exists the Consumers Association of Ireland, which is the recognised NGO in this country and it is very much involved in this project. We have given it funding to become involved in the policing process. It is doing it and we will hear from it. That is one way of involving the consumer because the Consumers Association of Ireland represents them.
Also, I established a consumer advisory council which has had its second meeting. This is the first time this has been done in Ireland. It is a very representative group; it represents the interests of consumers. I do this in the context of raising the consumer voice.
In regard to the points raised by Deputies, all subscribers to the code commit to carrying out the changeover to the euro fairly and not seeking advantage. They must use a six digit conversion rate. If someone does not comply with that, as the individual in question reported to the Deputy, that individual should also report that fact to the Director of Consumer Affairs because therein lies the real issue. The focus is on information on the dual display and that is why we place the focus on that. I will not rule out other actions if I believe they are required.
Our focus to date has been on putting the onus on businesses. I still believe that to
be the correct approach. We have seen price increases at various times imposed by certain businesses and I have heard anecdotal evidence or reports of prices increases in various outlets, some of which are a cause for concern. We have been in the dual price display period since 1 October and I warn business not to try to increase prices under the cloak of this changeover. I and other colleagues will expose anyone who does so.
