In response to a recent question I put to the Minister for Enterprise, Trade and Employment on proposals to control excessive prices for alcohol, soft drinks and food charged by some pubs, clubs and restaurants, she informed me that she has no plans to reintroduce price controls on any product. She stated that price control was a feature of policy in the 1980s when inflation rates reached over 20% and that it is a policy mechanism which failed, with maximum prices for products tending to become the minimum. The Minister went on to say that she believes that increased competition is the best way to reduce prices and ensure consumers get value for money.
On Monday, however, Ms Carmel Foley, the Director of Consumer Affairs, was quoted as saying that pub owners are reaping the benefits of an industry run like a monopoly and unthreatened by competition. Ms Foley said she believes that customers are continually exploited through high and indefensible prices. The Director of Consumer Affairs further stated that publicans are a privileged group of people who are not susceptible to the same level of competition due to current licensing laws which allow only a set number of pubs to operate. They are abusing their privilege by charging indefensible prices for alcohol and soft drinks in particular, given that there is no excise duty on such beverages. Ms Foley stated that anyone with eyes in their head can see the difference between what they pay for drinks in the supermarket and in the pub.
The State has granted these people an amazing privilege but there is no gratitude for it. I acknowledge the genuine concerns about alcohol abuse, but the regrettable side effect is the unjustifiable enrichment of a small group due to the small number of licences. The Minister for Enterprise, Trade and Employment puts her faith in increased competition while the Director of Consumer Affairs speaks of publicans, who are not susceptible to the same level of competition, abusing their privilege. The gap between them could not be wider. Indeed, the Director of Consumer Affairs went as far as to urge more shops to sell alcohol in a bid to rein in rip-off pricing by greedy publicans.
I raise this issue because a young woman from Waterford city, Maria O'Grady, made representations to me on the matter. The breaking point for her was when she was asked for €6 for a quarter bottle of wine in a city bar three weeks ago. As she pointed out to me, the wine cost €2.50 in the supermarkets, and supermarkets make their profit at that price. Ms O'Grady did not whinge and whine about the situation, which she found unacceptable. She went out, gathered up the evidence and, armed with that, she contacted the media, the Director of Consumer Affairs and politicians. In a structured way she sought a solution.
The prices she has quoted refer to Waterford city but there is no reason to believe that comparable prices are not being charged in other cities and large towns. Ms O'Grady instanced the fact that there is a difference of up to €1.40 in the price of a vodka in Waterford city, that night clubs with cover charges of up to €10 are charging up to €7 for a bottle of Budweiser and €4.50 for a vodka. These very high prices are not charged by average public houses but the fact that excessive profiteering is taking place at all is unacceptable.
The price of soft drinks is also an area which requires attention. Comparisons between supermarket prices and some public house, club and restaurant prices need investigation and action. Maria O'Grady draws attention to the fact that wines which can be purchased in supermarkets at prices ranging from €5.99 to €12.99 are on restaurant wine lists from €25 to €35. She instanced a case where a portion of carrots in a restaurant costs €5.95.
Publicans, like everyone else in business, are entitled to a reasonable level of profit but excessive profiteering is unacceptable. Ireland is no longer seen as a low cost country in terms of our tourism product. The Statistical Yearbook of Ireland 2003 indicates a 7.4% rise in prices in hotels, restaurants and licensed premises in 2002, while inflation was 4.6%.
With regard to the consumer price index, all items increased by 30.5% during the period 1993-2002. Alcoholic beverages and tobacco increased by 52.6% over the same period but the figure for alcoholic beverages alone is not supplied. Restaurants and hotels showed a price increase of 48.9% for the period.
The Minister's position on increased competition being the solution to excessive profiteering does not stand up to scrutiny. The drinks market is far from being a free market because of major restrictions on entry. I call on the Minister to enter into talks with the Director of Consumer Affairs with a view to effectively addressing the unacceptable practices exposed by Maria O'Grady.