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Seanad Éireann debate -
Wednesday, 22 Jan 1947

Vol. 33 No. 8

Industrial Alcohol (Amendment) Bill, 1946—Report and Final Stages.

I move amendment No. 1:—

In page 3, Section 4, sub-section (1), clause (c), paragraph (i), to add after the word "thereof" in line 6, the words "Provided, however, that the company shall not itself sell for human consumption as a beverage any spirit distilled by it and shall use its best endeavours to prevent the sale by any other person for human consumption as a beverage of any spirit distilled by it unless the Minister certifies that he is of opinion that such spirit is not distilled by private enterprise in sufficient quantity to meet the reasonable demand for such spirit.

This amendment arises out of the discussion on Section 4 during the Committee Stage. The House will recollect that that is the operative section altering the objects of the company which was set up under the 1938 Act. I pointed out then to the Minister certain doubts and difficulties which might arise through those alterations, that there was a danger that the distillation by this company of potable industrial spirit might render it possible for that potable spirit to be used to displace existing industry or to be used for the purpose of adulteration or for other unsatisfactory purposes—not by the State company itself but by those to whom the company might sell the spirit when distilled. The Minister then made it clear that, in his view, the spirit produced by the alcohol company —and to be produced in the future by Ceimící Teoranta—was always potable but that, having been distilled, it was denatured and so rendered unsuitable for potable use. Having regard to that, I submit an amendment which is completely restricted to the dangers which I visualised then and which, with the permission of the Chair, I will recapitulate for the benefit of the House.

My amendment merely provides that the company shall not, itself, sell its spirit for human consumption as a beverage, and shall use its best endeavours to prevent such sale by anybody else. So far as the first part is concerned, I do not think that the Minister intends that this company will so engage in the sale of spirit distilled by it and on that point I do not think the Minister and I are at differences at all. Where we differ is in regard to the possibility that this spirit, having been produced with State funds, would be utilised by some other person—with the indirect assistance of the State, therefore—to displace existing industry or damage it in regard to the quality of the spirit.

The case on the last occasion seemed mainly to turn around the manufacture of gin. Prior to the war, the average consumption of gin here was approximately 30,000 gallons per annum. In present circumstances, there is already here a private enterprise manufacturing gin from raw materials, 99 per cent. of which are produced, from their inception, in Ireland, and manufacturing that gin at the rate, in the last six months, of 28,500 gallons a year. Therefore there is a margin of only 1,500 gallons between the pre-war demand and the present output by private enterprise. I agree that there is greater demand now than in pre-war days, arising from the shortage at present of wines, rum, brandy and so on, but the fact remains that the reason the output of this particular private enterprise is confined to 28,500 gallons is that, of necessity, Government control has diverted the raw materials to other purposes. In fact, 28,500 gallons are the maximum output this private enterprise can produce with the materials allowed to it by the State. If greater quantities of raw materials were allowed, they would be in a position not only to make up the very small difference between the present output and the pre-war consumption but to meet at once all the demands for gin here.

This particular manufacturer does not import raw industrial spirit. He makes his own industrial spirit from grain— not from potatoes, from which Ceimící Teoranta will make theirs—and uses something less than 1 per cent. of flavouring herbs, which must, in any event, come from foreign countries, as they cannot be produced here by anybody. Since he makes the gin from 99 per cent. Irish materials and is in a position to supply the total demand of the Irish market, I suggest that it would be grossly unfair to permit a State company — or anybody else helped, so to speak, by State moneys— to go into the market and displace the existing enterprise. The enterprise was started about the end of 1937 in the very greatest difficulties, having to compete with a tremendous barrage from all the established brands of gin, which were advertised not merely here but everywhere else and which, therefore, were very hard to displace.

The war assisted this particular enterprise, but it was started before the war and was experimenting and had gone into production before the war. During the war, comparatively speaking, no gin was imported. In 1945—the last year for which details are supplied in the Statistical Abstract or the Revenue Commissioners' Report— this manufacturer supplied the entire Irish market, with the exception of only 3,500 gallons. Since 1945, he has been able to increase still further and I venture to say that the 1946 figures will show that the gap has been closed even more.

I admit the Minister has no intention that this company will step in to do that manufacturing, but the Minister has stated that the spirit will be produced cheaper and better for other people to buy it. If he does not recollect his statement exactly, he will find it in column 482 of the last report. The gin produced by this private enterprise is considered as good if not better than any of the dry gins imported and it is the cheapest gin on the market to-day. If the spirit used by Ceimící Teoranta is sold to anyone else for production as gin, all that can happen is that someone else will be displaced. I think it will be agreed that that is not the intention or desire of this State operated company and it would be grossly unfair for such a company to do that with the aid of the taxpayers' money.

Apart from the market in respect of spirit for gin, there is the danger that, if this spirit is produced in very great quantity, it might be utilised by other persons for the adulteration of Irish whiskey and sold as such. There is no suggestion whatever that any private individual or privately-owned company cannot get into the manufacture of either pot still or patent still whiskey if they desire to do so. The patent still whiskey is whiskey produced from industrial alcohol spirit, though that spirit is made from grain and not from potatoes. I suggest there should be different considerations in respect of the aid of the State being given towards the private individual getting into such manufacture and operation.

The dangers of that to the national interest are so very obvious that I do not think it is necessary for me to stress it very much. I want to stress, however, that it is not suggested that this company will engage in such adulteration or in such sale as that of which we are afraid. But I suggest that it is making available national resources which can be utilised in a manner completely foreign and antagonistic to the national interest. We know that, as a result of its quality, pot still Irish whiskey has got a name of which we are all justly proud. It would be very undesirable that the State, as such, should do anything, even indirectly, which, even if it did not damage, would involve the risk of damaging, the reputation of a product for quality which has been maintained and accepted here and abroad consistently down the years. That danger is, particularly, operative in the case of the export market. This product would be manufactured in Ireland and could be sold to anybody here. They would then be entitled to sell it abroad as Irish whiskey though, in fact, it would not be Irish whiskey, as members of the House understand the term. It would be stuff made industrially from potatoes.

Without going into the matter in any great detail, I may refer to a paragraph in the newspapers during the past few days which described how this industrial spirit was used for drinking purposes in America at a party. The consequence was that six persons had to be removed to hospital and two died. The spirit distilled from potatoes and wood is indicated. When denatured and rendered undrinkable, that spirit is used for industrial purposes, such as combastion. That is an aspect of the danger which will arise. It is an aspect of great importance from the point of view of our export trade. So far as home consumption is concerned, I suggest that the only difference which increased whiskey distillation can make, taking the long view, is that it will either take from the existing trade or else mean that we shall increase our capacity for spirit-drinking as a nation. I do not think that anybody—least of all the Minister— would be anxious to accept the second alternative. Therefore, all that can happen is, if this company goes into the production of spirit for somebody else to turn into whiskey, that it will displace an existing industry which is of the greatest value.

I wanted to be perfectly sure when I was framing an amendment to this Bill that I would not frame it in a way which would restrict what we would all consider the proper and rightful scope of the products of the company. The company is empowered to manufacture chemical products and there is a most specific proviso in the Bill that, before they do that, they must seek a licence from the Minister. The Minister must, before he grants that licence, go through certain formalities of publicity, of receiving objections and considering the objections made. I did not think that it was desirable that even that long process should be adopted in this case. All that my amendment asks the company to accept, and all that I now ask the Minister to accept, is the proposition that, before this company distils spirit which might endanger the existence of any private enterprise, the Minister will certify that he is of opinion that such spirit is not distilled by private enterprise in sufficient quantity to meet the reasonable demands for such spirit. No Minister would give a certificate of that nature without having considered the facts carefully and obtained all the information that was desirable or necessary. If the Minister were of opinion that the company was merely going to displace an imported spirit, he would give a certificate, but if the company by entering into a transaction of this kind enabled somebody else to take from an industry already existing, then I think that no Minister would give a certificate. It is for that reason I have framed the amendment in this way, leaving it completely to the Minister's Department to take the proper steps to ascertain whether the demand is being reasonably met by existing enterprise and, if not so met, leaving him in the position to direct that the company shall do these things.

I must stress, before I conclude, that it is not the fear that Ceimící Teoranta will do these things which influences me. It is the fear that, if they make these spirits freely available, other people will, as an indirect result of such activity, be able severely to damage industries already existing which are of great value to the community and that all that will happen, so far as employment is concerned, will be that employment in one place will be transferred to another.

I hope Senators listening to Senator Sweetman were not as confused as he succeeded in making me. I think that he has completely failed to grasp the issues involved in his amendment. Let me make quite clear that this Bill does not alter in any way the existing powers of the Industrial Alcohol Company. The new company that will emerge when this Bill will have been brought into operation— Ceimící Teoranta—will have the same powers as the Industrial Alcohol Company, powers which the Industrial Alcohol Company have had since 1938. Under the legislation of that year, the company was given power to manufacture ethyl alcohol, whether denatured or not, which has been distilled or rectified to a strength of not less than 40 degrees over proof by a process other than the pot still process. When the Oireachtas passed that Act in 1938, they did so knowing that it was the intention that the Industrial Alcohol Company would, in addition to producing denatured spirit for sale to petrol distributors, engage in the production of industrial alcohol required for commercial purposes. The point I want to make is that nothing is happening now that need cause any apprehension to any manufacturing distiller in the country. If the powers of the company appear to threaten their welfare in any way, that threat has existed since 1938. I could not agree, under any circumstances whatsoever, that the provisions of the 1938 Act be amended so as to detract from, or limit, the powers of the company in regard to industrial alcohol.

In so far as the manufacture of gin is concerned, I am not going to take the responsibility upon myself of deciding what, in normal circumstances, is a reasonable demand for that spirit. I do not think that there is any case whatever for granting a monopoly for the manufacture of gin to any one distiller. If there is to be a monopoly for the manufacture of gin to one firm, or any limitation on the number of people who may engage in the production and sale of gin, it should be done by straightforward legislation and not as an indirect consequence of the enactment of this Bill, or by amendment of this Bill. So far as I was able to follow Senator Sweetman, the claim he put forward was not so much that there should be restriction upon the number of people who engage in the production of gin or limitation upon the quantity of gin they produce as that there should be safeguards against the possibility of Ceimící Teoranta subsidising one producer of gin to the detriment of others. I do not think that any Senator really apprehends that such a situation will arise. The company will be under an obligation to carry on its activities so as to produce a profit. If, under any circumstances, they appear to be selling a product at a price below its economic cost, that product at that price will be available to everybody who wants to purchase it and will not be the exclusive privilege of any one person or of a limited number of persons.

No protective duty is in operation so far as alcoholic liquors are concerned. In the past, distillers and brewers here sold their products in competition with all the products of the world. It is most unlikely, having regard to the substantial export trade in alcoholic liquors which this country has enjoyed, and hopes to enjoy in the future, that the Government would at any time contemplate affording protection in the home market to home distillers and brewers. If anybody, therefore, engages in the production and sale of gin here, he will know that he will have to produce and sell it in competition with the products of other countries. So long as that situation continues, there would, obviously, be no point in imposing restrictions upon new firms entering the business or limiting the extent to which they might engage in it.

That was not suggested.

I quote from the Senator's amendment: "Unless the Minister certifies that he is of opinion that such spirit is not distilled by private enterprise in sufficient quantity to meet the reasonable demand for such spirit." Let me turn to the question of the possibility of alcohol, produced by Ceimící Teoranta, being used for the adulteration of pot-still whiskey intended for export. There is no law against blending alcohol with whiskey at the moment. There is no restriction on the number of persons who may engage in whiskey distillation or in the business of whiskey blending. It is necessary, also, to bear in mind that, unfortunately, our jurisdiction does not extend over the whole of our territory. There are distilleries outside our jurisdiction, in Irish territory, which are producing and selling throughout the world whiskey described as Irish whiskey—whiskey which I found not very good.

I think it is true to say that to whatever extent the reputation abroad of Irish whiskey was impaired in recent years it was because of the activities of these distillers who are not subject to our control. If there should arise at any time a case for the supervision of the export of whiskey as regards quality, or age or anything else, it can be done. I was quite prepared at one period to contemplate that every bottle of whiskey exported should bear a certificate from the Revenue Commissioners or from some other State authority to the effect that it was unblended spirit of a certain minimum age. If arrangements or regulations or legislation of this character would be beneficial to the distillers in their efforts to develop export business, they can be discussed.

These things, however, should be discussed as separate matters. We cannot in this Bill prevent people from using industrial alcohol, either home produced or exported, for blending with Irish whiskey either inside Ireland or outside the country. Following the end of prohibition in America a certain group got hold of an old Irish company called Jameson and Sons Ltd., which had ceased to produce whiskey but had not been formally wound up. Having got the right of using that name they marketed a spirit which they described as "Irish Type Whiskey" but which contained only a small percentage of genuine Irish whiskey the balance being composed of immature rye spirit produced in the United States of America. There was no means of stopping them.

It may be that the distillers themselves could prevent substantial quantities of their spirit reaching the wrong people and it may be that there is a case for taking power to exercise some control over the export of spirit from this country but if there is such a case we will have to consider it separately. We cannot do it as an indirect consequence of this measure. Let me make it quite clear that this company is not going to do anything that will damage either the reputation or the export business of Irish whiskey distillers. I think the Irish distillers need no assurances on that point. In so far as there are apprehensions that alcohol which may be sold for other purposes would be used to adulterate whiskey for sale abroad with grave risks to the reputation of pot-still whiskey, there is the assurance that the company will not facilitate business of that nature. I repeat that if more positive safeguards are needed against the possibility of Irish whiskey being diluted by the addition of industrial alcohol or against the possibility of damage to the reputation of Irish whiskey, they must be provided by some other legislation. It is not reasonable to impose restrictions on this company that will not rest upon anyone else. It is, I think, unreasonable to ask this company to restrict themselves in the production of industrial alcohol and to ensure that what they sell will only be used for purposes which they specify. Persons using industrial alcohol for any other purpose can get it elsewhere.

But no one else in this State is getting these facilities.

I would like to remind Senator Baxter and Senator Sweetman that there has not been and there is not going to be any protective duty in operation. So far as persons in this country want to get gin, they could get all the gin they wanted from abroad if they wish. I am speaking, of course, of normal times. At the present time the production of whiskey and gin is restricted by the intervention of the Government in limiting the allocations of grain and fuel to the firms concerned. Anyone who wants to get industrial alcohol can get it anywhere else in the world where it is available. In the case of products other than industrial alcohol the company cannot engage in any new form of activity unless the procedure laid down is followed, that is, by a notice being issued to the Press and after examination of any objections that may be forthcoming as a result of that notice. In regard to alcohol, the powers of the new company are neither extended nor restricted. They are in existence since 1938. The danger that any ill effects will follow for the Irish distillers as the result of the activities of this company is insignificant. I do not think it is desirable to restrict the scope of their activities in regard to this commodity merely because of unfounded fears that in some way its activity in the future may have results which it had not in the past, results detrimental to the Irish distillers. I am aware that there is some apprehension amongst the pot-still distillers as to the possible effect on their business of the activities of the company.

They have stated that they were not aware that the Industrial Alcohol Company had the powers, which gave rise to these apprehensions, since 1938. I can give them any assurance that they regard as necessary either on the point of utilisation of the products of this company in a manner which may destroy the reputation of their products or on the possibility of the products of this company being sold to new firms engaged in the production of gin or whiskey or any other beverage on terms which would give these new firms advantages over existing concerns. I do not think it is right to write safeguards of that kind into legislation, which might deprive the company of a free scope of action in a field in which it is legitimately entitled to engage and in which we contemplated it would engage in 1938. Senator Sweetman applies too much weight to the hopes I expressed that the alcohol produced by this company would be better and cheaper than that made anywhere else. If it is better and cheaper then it will be available to anybody. I do not want to say anything that might suggest that I think we should limit the production of gin here in regard to the total quantity consumed or in regard to the number of firms engaged in its manufacture.

It may be that there is a case for limiting the production of gin or the firms engaged in it. That case has not been made to me, and if such a case is made to me I am quite prepared to consider it, and if the case is sufficiently strong to justify legislation, I will consider introducing that legislation. But it is desirable that that should be done by separate legislation; not by putting obligations on this company of seeing that the production of alcohol is limited in order to ensure that the supply of gin does not exceed the demand for it.

It seems to me that most of the Minister's case would be perfectly justified if he was arguing on behalf of a privately-owned company. But in this case we are dealing with a company which is State controlled. I think I am correct in stating that in 1938 it might conceivably become a privately-owned company by the Minister for Finance offering his shares to the public. We are dealing here with an argument as to whether it is reasonable or proper to restrict a State-owned company so that it may not interfere with privately-owned companies. The Minister stated that there was no change in the powers given to the company in 1938, that they are the same as given in this Bill. I think that in the Industrial Alcohol Bill of 1938 the objects of the company were the manufacture and sale of industrial alcohol. For some reason or other this is changed. If it is not changed for the purposes of extending the powers I——

The phrase in the original Act was interpreted as having the same significance as in this Bill. The memorandum of association of the company contained the phrase used in this Bill and no change has been made in its powers.

I know there has been considerable difficulties with certain cases which came before the courts and where companies found themselves restricted to their principal objects. I have not consulted a lawyer on this matter but I doubt very much if anything stated in the memorandum of association which is not a principal object, gives the company power. That is a difficult problem but it does not immediately arise. At any rate the Minister will agree that it is not unreasonable to assume that someone in authority thought it would be better for some reason to make the principal objects of the company include refining, and selling, industrial alcohol, and products and derivatives thereof.

Now, let us assume, for the sake of argument, that there is no difference between the two. I cannot follow the Minister that, because something was done in 1938 and no use was made of it, and it is discovered that use might be made of it in 1947, a Bill is before the Oireachtas to say that it should not be put into it. There may be excellent reasons why it should not be put in, but the reason is not that it was not in the 1938 Act. The main object of Parliamentary discussion is to give an opportunity for making further amendment to legislation where that is considered necessary.

On these grounds alone, I do not think a case has been made against the amendment. I do not understand the Minister's references to monopoly. Even if this amendment were accepted, I do not see how it would create a monopoly. There is no monopoly as far as gin is concerned. There is nothing to prevent people who are not manufacturing gin at the moment from doing so except perhaps that they might have to go to the courts to get the general objects under which they are operating extended. As far as I can see no question of a monopoly arises, and even if it did it is not, I suggest, the business of a State-owned company to come in to break the monopoly. That would be very doubtful policy, a thing that could only be done by the Government after very careful consideration. It certainly would not be a desirable thing, especially where you are dealing with intoxicating liquors. That is not a matter in which we want to extend Socialist principles to any extent. We have here a State-controlled company. It is likely to remain so. The Minister, no doubt, by expressing his wishes could get them carried out by the directors in most cases, but I think he could not enforce them except over a period of time—the period over which he had failed to elect directors to carry out policy, subject to his wishes. As well as I remember, this company, which was set up in 1938, is in the position of most other State-controlled companies in the sense that the directors are appointed to carry out the objects laid down, like a private company, except that they must have consultations with the Department of Industry and Commerce. Otherwise, they will not be re-elected. It is, I think, perfectly reasonable to ask that provision should be made that this company cannot, without further legislation, itself sell for human consumption as a beverage any spirit distilled by it and shall use its best endeavours to prevent the sale by any other person for human consumption as a beverage of any spirit distilled by it unless the Minister certifies that he is of opinion that such spirit is not distilled by private enterprise in sufficient quantity to meet the reasonable demand for such spirit.

As far as the second part of the amendment is concerned, it is not at all clear how it can operate, but I think that the first part of it might very properly be inserted in the Bill.

I have only a word or two to say on the issues raised by the amendment and by the Minister himself in his reply to it. The hardship which Senator Sweetman sees in the Bill and which I can see is this: you have this State enterprise and you have another privately-owned enterprise which, apparently, is producing gin and putting it on the market in adequate quantities for our internal consumption at the moment. The fear of those engaged in that private enterprise is that powers are being made available to a State company to produce a product which, is the raw material for their private enterprise, and that these powers are going to be used not only for the production but for the sale of this product. Senator Sweetman's view is that that is going to endanger a private undertaking. The Minister stresses the point that in so far as the company are going to engage in the sale, they are not going to do so in any way that will be unfair either to existing private enterprises or a possible new enterprise: that is to say, all private enterprises are going to be put in the position that they can buy this raw material from Ceimící Teoranta at the same price. My point is that Ceimící Teoranta is the only State undertaking engaged in this sort of activity. It is getting opportunities in regard to capital facilities which are not being given to anybody else. It is possible that Ceimící Teoranta will produce this raw material for the production of gin at a price less than the existing companies can do it.

To illustrate that point may I ask, who can compete, say, with the alcohol factory at Carrickmacross that can buy Cooley potatoes at £4 per ton? The position is that the Cooley people cannot sell them to anybody else, and are not permitted to send them out of the area unless they are shipped by sea from the country. Since there is no other enterprise of that kind in the country then, obviously, nobody else can produce this spirit as the people in Carrickmacross ought to be able to do it. I think I am right in assuming that the people in Cork who are producing the base for their gin from barley are not likely to be able to have the raw material at the same figure as the people in Carrickmacross will be able to provide it. I have tried to listen impartially both to Senator Sweetman and the Minister, but in view of what I have said there does seem to be every reason for the fears expressed by the Senator. Even though the Minister gives the assurance that no firm or group of people are going to be placed at a disadvantage, I think that, as far as Ceimící Teoranta is concerned, the people in Cork are going to be placed at a disadvantage unless the Minister can convince me that that is not so. I would like to have enlightenment on this matter. At any rate, from what Senator Sweetman has said, and from what the Minister has said, the impression left on my mind is that this firm in Cork will be placed at a disadvantage.

If it should happen—I do not think it will happen—that spirit equally good as the Cork firm are producing for themselves is produced by Ceimící Teoranta and is available to them at a lower price, will not that be an advantage to the Cork firm rather than a disadvantage?

I am glad that the Minister has intervened because that is the very question that struck me. Could we have some information as to what the output of the usable potable spirit from the alcohol factories is? If a State-subsidised concern is going to be a danger to private enterprise, then I share the doubts and misgivings expressed by other members of the House, because I think we ought to cherish jealously the position of private enterprise which has not all the advantages that a State-subsidised concern would have. On the other hand, I want to say that I was very much impressed by the Minister's statement and by the assurance that he gave, that certain of the dangers that have been envisaged are more imaginary than real. At the same time, of course, it has to be borne in mind that what we have to concern ourselves with is not what the Minister intends but what this Bill, when it is enacted, will permit. If the Minister can reconcile these two conflicting viewpoints, then I think we should have no difficulty in disposing of the doubts that rightly exist. There can be no doubt whatever that a State-subsidised concern, which has its funds guaranteed, is in a privileged position, as against the privately-owned concern. The latter should not have its position jeopardised by the State-controlled concern. We have not been given a figure as to the volume of output of usable spirit that will be made available by this company, or whether its output can be readily absorbed by the gin manufacturers which we have at the moment. I do not think anybody can have a grievance if State-subsidised concerns can provide the raw materials that are needed by other industrial concerns.

I think this amendment has given rise to a very valuable discussion and has drawn forth from the Minister a very important statement as to what may be envisaged in further legislation. We have every reason to be proud of the distillers that we have. If it were true, as Senator Sweetman seems to suggest, that a danger existed for them so far as this Bill is concerned, it would be a very serious matter. It would be very serious indeed if the high reputation which they have built up for their products were to be jeopardised in any way. If the Minister envisages legislation whereby the Government can guarantee the quality, the age and all the rest of our future exports of Irish whiskey, then at least one good thing will have emerged from the amendment. If I thought that the Bill jeopardised private enterprise I would be as strongly in favour of the amendment as Senator Sweetman or those who have spoken in support of it. I would like the Minister to tell me about the volume of output and whether it is not true that the existing gin factories have not to compete to-day against the import of unlimited quantities of raw material.

I have listened to this debate with a great deal of interest. I possess no technical knowledge of this matter myself. I regard myself as an ordinary individual. I might perhaps regard myself as a special juryman and nothing more. As Senators will remember on a previous stage of the Bill I looked at this matter somewhat differently from Senator Sweetman, because I thought that he wanted to prevent the establishment of patent-still methods of distillation in this country. I see now that he wants no such thing but rather that he wants to prevent the State prejudicing already established distilleries in the country. The Minister says that there is no danger, and that anybody who wants alcohol as a raw material is free to get it wherever he can.

He said that the person wanting it can import it. That, of course, would not apply now. I take it that what the Minister meant was that it would apply in normal times and that a person could import the raw material in any way he liked and that there is going to be no restriction on such importation. But when the Minister says if a concern can get it cheaper and better from this new company, why should it not do so, that is where I have some grave doubts. My doubts are rather accountancy doubts. This question of price in a Government concern can be twisted any way without, so to speak, cooking the accounts. When you are making a number of products, it is highly difficult, even with the best intentions, to state the cost of any one of them. I can see a great temptation on the part of a strong combination, the Government and a Government-controlled company, even with the approval of the auditors, to give a favourable price to any one component. I may develop the accounting aspect of this unduly, but there are capital charges involved in this failure of our industrial alcohol venture. Those capital charges, if allowed to remain, should be carried, at least in some portion, by the new product. Whether that will be so or not is a very dubitable question. I can see every opportunity for the Government and the company, if they wish to do so, to weight the scales in favour of the cheapest possible price for any product they want to push and get an auditor's certificate to that effect, even involving therein the minutiæ of the technique of costing.

It is implicit in all Government enterprise that you do not have the factor of free enterprise, where the condition is that, if losses are made, they are felt very soon and before long must culminate in bankruptcy. A Government concern can be kept going and has a very wide latitude in prices and can see its way to justify its fair prices. I can see the Government making a very favourable price for alcohol so that everybody can get it at that price and thus prejudicing the position of concerns already established and doing their own distillation. I would like the Minister to answer that point.

If this alcohol is produced more cheaply than that of already established distilleries—I do not mean pot-still distilleries, as I gather that gin is not necessarily a pot-still product, and I assume gin can be the product of a patent still—is it not very likely that the spirit produced by this new company under a favourable system of Government costing might be cheaper than the gin produced by an established distiller and so prejudice existing interests?

The arguments used by Senator Summerfield and endorsed to some extent by Senator Sir John Keane force me to intervene to ask, if State enterprise can cheapen the production of a product, whether those Senators, as exponents of private enterprise, are opposed to that cheapening? It seems to me that the stress they lay on the benefits of private enterprise is somewhat exaggerated.

The costing systems are different.

I reckon that anything done by a Government is under much more public control and observation than anything done by a private company. Governments may try to emulate the activities of private enterprise when they hide their accounts, but there is a method of accountancy in public affairs which stands much higher than any system of accountancy in private enterprise. Therefore, the arguments used by those two Senators should not bear very much weight amongst people who regard the public good as the essential.

I can quite understand Senator Sir John Keane and Senator Summerfield, and perhaps others, eulogising private enterprise, but it does not seem to me or to a great many of my fellow countrymen that private enterprise has done a great deal for the nation. As its name suggests, it is something that exists for the private profit of the few, whereas State enterprise stands for the good of the many, of all, not leaving out even the few. Therefore, I hope the Minister will not agree to this amendment, which lays such emphasis on private enterprise.

If the public good is guaranteed or improved by State enterprise, then we as public representatives—no matter what we may think in our private capacity—have no option but to support State enterprise. For that reason, I hope this amendment will not receive the blessing of the House.

Senator Baxter tried to insinuate that some injustice was being done to the people of Cooley by their potatoes being bought by Ceimící Teoranta. I understand that the type of potato grown there is green and small and useful only for consumption by this company. Such potatoes could not be sold otherwise, so it is a great advantage to have a company like this purchasing them. The Senator said they were selling at £4 a ton. I understand that an acre will grow 20 tons, so they are getting at least £80 per acre. Therefore, no injustice is being done to the people of Cooley. On the contrary it is a great advantage to them to have Ceimící Teoranta in operation.

This company has been formed for the manufacture of industrial alcohol. There may be derivatives in the form of gin, poteen or whiskey. If there are, and if this amendment is carried, what is to be done with them? Are they to be thrown into the sewers as waste and be an additional expense on the company, as they cannot be sold or consumed? If it is discovered that good whiskey or gin can be manufactured from this type of potato, why should not the experiments continue? There is nothing to prevent other manufacturers of whiskey or gin adopting the same idea and buying that class of potato for that purpose. I dare say that, if the product is not a good one, its sale will not be allowed. If it is good, why should it not be sold instead of being thrown away?

The amendment is an extraordinary one and contains an absolute prohibition. It says:

"... the company shall not itself sell for human consumption as a beverage any spirit distilled by it and shall use its best endeavours to prevent the sale by any other person for human consumption as a beverage of any spirit distilled by it unless the Minister certifies ..."

I do not know how you can put into an Act that the company "shall use its best endeavours". You may say "shall prevent and shall have power to prosecute", but "best endeavours" would be something very difficult to carry out. Would there have to be a mandamus against the company to use its best endeavours? Whom would you sue—the managing director, the secretary or someone else?

Has the Senator not met that phrase in company work before? It is operative in Dublin, if not in Galway.

I do not think I ever met that phrase in an Act.

It is used commonly in company work.

I know, but if we pass this it will be in an Act and would be different from anything I have seen before. I am opposed to it, as it would be unworkable. If the Senator had put in an amendment that this spirit could be sold only to a manufacturer, I would have a great deal of sympathy with it. The Minister has spoken as if he intended that the sale would be to the manufacturer only and I think that would be the case. The company could not sell by retail, as any application they would make for a retail intoxicating liquor licence would get very little sympathy in court. It may be suggested they would sell to a wholesaler. Before that could be done, I think they would have to put it into bond and pay duty on it, so it would not be of any great advantage to them.

Apart from the clause which makes it unworkable, the amendment would limit the powers of the company in a way they should not be limited. There is a lot in what Senator Kyle has said, that if the company can turn out a cheaper product for the good of the citizen, why should the citizen not benefit by that?

I do not propose to follow Senator Kyle into a discussion on State enterprise versus private enterprise. We can leave that to another occasion. If any product were produced under State enterprise more cheaply and proved to be a better article, on the same basis of costing, there would be a case for the ideas underlying Senator Kyle's remarks. I am not at all satisfied that it is going to be a genuinely cheaper basis. The basis of any costing depends on the amount you take in for your overheads. In a State enterprise, costings in regard to overheads can be dealt with in an entirely different way from those in relation to a private enterprise. If Senator Kyle went further down that avenue, he would find that the difference between his view and mine would be determined.

The Minister took the line that this was an effort in an indirect way to create a monopoly. It is nothing of the sort. It is neither a direct nor an indirect effort to create a monopoly. The Minister further suggested that it was an indirect endeavour to provide that there would be legal standards for whiskey. In the Minister's view, and in my view, that would be much more appropriate to a special enactment for that purpose. I am in entire agreement with the Minister that to endeavour to provide standards for whiskey, either for export or for home consumption, by means of a side kick on this Bill, would be entirely undesirable. There is a great deal of difference between discussing whether a thing is a monopoly or not and utilising the argument that, where there is an existing enterprise, the State should not step in beside that enterprise. The Minister cannot contend, at the same time, that this is a State enterprise and that it is a private enterprise. I do not propose to introduce my favourite hobby-horse of Private State companies on this Bill but this is either a private company or a State company. If it is a State company, then, to suggest that, because you ask it not to enter into competition with an existing enterprise, you ask for a monopoly, is not a valid argument. Even if Ceimácí Teoranta was not established to carry out this industrial alcohol distillation, anybody could enter into the manufacture of gin at the present time, just as the Cork company has gone into it. I believe that it would be perfectly right that any private individual should be entitled to do in the State what another private individual is entitled to do. But what we are doing here is providing that what has been done by a private enterprise should be done by the State, through a State company, in competition with that private enterprise. To say that the State should not enter into competition with an individual is very different from saying that a monopoly should be granted. I do not believe that a monopoly should be granted but I do believe that the State should not complete with private enterprise. In that I differ from Senator Kyle. It is well that the difference should be fairly stated, as it has been stated by Senator Kyle.

I always believed that my view on this matter was the Minister's view until this Bill came before us. I must have misunderstood the Minister. Apparently, it is the Minister's view that there should be competition by State enterprise with private enterprise. I hope I have misunderstood him. If I have, I shall very willingly withdraw what I have said, because I should be delighted to hear that he holds the same view as I do. As regards the Minister's view on pot-still distillation, the Minister will understand that it is difficult, without seeing it in writing, to follow the wording of his assurance. It did appear to me to cover some of the dangers I had in mind and, in so far as it did, I should like to express my appreciation of it. However, I am afraid the Minister has not gone sufficiently far to cover the danger I see of an existing firm being put out of business, at any rate to an extent, by a State company, particulary in regard to the manufacture of gin. I do not accept, and I did not think that the Minister accepted, that it is unreasonable to ask a State company not to do a thing that a private company could do. I always understood that the Minister accepted that there were certain limitations on what should be done by State companies. One of these limitations was in respect of competition with a private enterprise that was producing a good article at a reasonable price.

I hope—I appreciate that the Minister cannot very well admit the case here —that the Minister, in his directions to the directors of the company, will tell them that they are to have regard to the fact that it would be undesirable in the extreme that anything this company would do would jeopardise an existing industry—an industry which has proved, particularly in recent years, that it was able to satisfy the demand that existed. I hope that those will be his instructions to the directors because, if they are not, I can foresee very grave difficulties in the future, dangers which, whether or not the Minister or I be here, will be raised in the Oireachtas from time to time as they become facts. I believe quite candidly that the Minister had not these things in mind when he committed himself publicly.

The reason they were not in his mind was that the definition of "industrial alcohol", which is a statutory definition, to be found in the 1938 Act, is not the definition operative in the trade. In the trade, potable spirit, in the beverage sense, is not industrial alcohol. In the statutory definition, it is. It is difference in definitions which has caused this matter to be presented in the way it was and which prevented the Minister from having before him at the time he committed himself all the information which would enable him to make up his mind. He has that information now, and I hope it will be incorporated by him in his direction to the directors when laying down the policy he proposes the company should carry out.

As regards the amendment, confronted as I am by the Government Party and having at my back Senator Kyle, I realise that I am merely battering my head against a wall in endeavouring to get the House to accept my proposal. As a result of the Minister's direction to the company, I hope that this Cork company, which has been producing, within 3 per cent. The total demand in the normal prewar period, will be entitled to carry on its lawful endeavours as it has been doing since 1937, that it will be able to build up the enterprise as it is anxious to do as soon as controls are removed and that it will be able to meet and successfully beat competition from the brands of this product longer established and imported into the country in the quantities and by the methods I have indicated.

Amendment put and negatived.

I move amendment No. 2:—

In page 9, Section 8, to add at the end of sub-section (4) the following words:—"In the exercise of the powers given by this section the Minister shall have regard to the desirability of making available at all times the chemical raw materials of agricultural and industrial production at prices which compare favourably with the prices at which similar chemical raw materials could be imported."

This amendment is a very modified version of an amendment which I brought in on the Committee Stage, which received considerable criticism, constructive and otherwise, from various sides of the House. I was very much impressed by these criticisms and I decided that my amendment, in its original form, went much too far. Consequently, I introduce it now in this modified form. The object of this amendment is to secure two things, so far as we can secure them by our own action within our own frontiers— namely, that chemical materials which are raw materials for agricultural or industrial production shall, so far as possible, be available at all times and, in the second place, that the price at which they will be available shall compare favourably with the price at which such materials can be obtained from external sources. To "compare favourably" does not necessarily mean that the price shall be indentical, but it does mean that it should not exceed by a very wide margin the price at which similar materials can be obtained from abroad. It is left entirely to the discretion of the Minister to decide whether or not the margin is too wide.

I am sure the Minister realises as well as I do that, so far as agriculture is concerned, it is necessary that chemical manures be available at a convenient price at all times. Obviously, there is no use in having chemical raw materials physically available unless the price is such as will enable the farmers generally to use them in adequate amounts.

If the price were prohibitive, they might to be physically available and yet not used at all. The two points are: availability and suitability of the price. It is very important that these chemical raw materials of agriculture should be available and should be used in adequate quantities during the next few years. To illustrate that importance, I should like to compare quite briefly the history of our agriculture and the history of British agriculture in the past few years. If Senators will turn to page 37 of our National Income and Expenditure White Paper, they will find that between 1938 and 1944——

An Leas-Chathaoirleach

The House is not discussing the question of national income and expenditure on this amendment.

I am merely illustrating my point. I propose to argue that the question is entirely one of the availability of chemical manures. We did not have them during the war and the British had. Our net agricultural output increased by 5 per cent. during the war years and the British net agricultural output increased by 70 per cent. Having regard to the difficulties we suffered during that time, the fact that we did maintain the volume of our agricultural output was very creditable to the farmers. My contention is that if chemical manures had been available in adequate quantities, as they were available to our neighbours, our net output would have increased very much or our present volume could have been obtained at very much lower cost to the consumer than the price the farmer is now receiving and the consumer is now paying.

So far as manpower was concerned we had six persons to every 100 acres in this country: they had three in Britain. So far as machinery was concerned they had the machines but the great factor which explains their achievement and our failure to add to the volume of agricultural output was that chemical manures were available to them and we had not got them. We hope that a period like the recent emergency will not occur again but nevertheless we have learned that it is highly desirable that these chemical raw materials should be available and available at the right price, here at home. We are already producing phosphates from imported rock but if we can produce a substantial amount of sulphate of ammonia from our own resources, all to the good. I gather that gypsum which is available in considerable quantities in different parts of the country is a raw materials for sulphate of ammonia, but I suspect that other ingredients are necessary. How is the nitrogen element to be provided and to what extend will it to be necessary to rely on imported fuel for manufacturing purposes? These are technical points upon which I would like enlightement by the Minister. In the meanwhile, I prefer to have an open mind on the question. I would like to emphasise the great importance of laying down as the guiding principle of the Act the points enumerated in the amendment and I recommend the amendment to the House.

My main objection to this is that it is not an amendment at all: it is a speech. I do not think there is any use in writing into legislation pious hopes.

The Minister likes blank cheques.

The Senator misses my point. He asks to have put into the Bill provisions to ensure that the Minister shall have regard to the desirability of making available raw materials for agricultural production and industrial production at prices which compares favourably with prices elsewhere. I cannot conceive any circumstances in which any Minister will admit that he did not have regard to the desirability of those matters.

Your frankness is overwhelming.

It is certain that any Minister taking an interest in the national economic development will have regard to these circumstances.

Is there any objection to writing it into the Bill?

Certainly; I think it would look foolish. There is no use discussing this amendment on the issue whether Irish agriculturists should have more fertilisers or cheaper fertilisers. Senator Johnston is an economist. If in addition to being an economist he had applied his commonsense to the interpretation of the statistics which he has quoted, he might have come to the conclusion that a much bigger increase in the volume of agricultural production in Britain than here was due to the fact that they were fighting a war in which their food supplies were threatened and in which they had to increase production or surrender. We were not in the same position. We always had a sufficiency of food here. He might have added the fact too, that their production before the war was such an insignificant production of their needs that room for expansion existed.

There is plenty of room for expansion here.

I suggest that there are many other reasons for the increased production in Great Britain as compared with this country other that the availability of sulphate of ammonia there and its absence here. I have no objection whatever to Senators expressing the opinion that in exercising his powers under this Bill the Minister should have regard to these considerations but I think that any Minister at any time will have regard to these considerations. I think it is impossible for circumstances to arise in which a Minister will deny that he had regard to them.

The Minister objects to putting pious resolutions into this Bill but he must have forgotten some of the provisions of earlier measures. In one of the Land Acts there is a provision that the Land Commission in considering whether they should resume a holding shall have regard to the desirability of increasing the food supplies of the country and providing land for landless men. Rightly or wrongly they have been put in so that the Minister is not on very strong lines in saying that there is any great innovation in this. I gather that the Minister has taken the line which I expected he would take. He has more or less given an undertaking that he will do what we ask. He says: "Do not put it in the Bill and I will give the House and undertaking that in exercising the powers given to me I will have regard to the desirability of making available at all times the chemical raw materials of agricultural and industrial production at prices which compare favourably with the prices at which similar chemical raw materials could be imported." If the Minister gives this undertaking it will meet the case. The agricultural community or at least certain members of it are just a little bit apprehensive lest their interests should be sacrificed to the interests of the manufacturing industry and also perhaps a little apprehensive that their interests might be sacrificed to this company which is State sponsored.

I do not intend repeating what I stated earlier in connection with the difficulties of State companies. I refrain from saying that this is merely a case of bolstering an old company which has not been very successful, but it is a case of a State company which has not fulfilled early expectations in certain lines, and it is possible to inject fresh life and financial blood into it by slightly altering its objects. Hence this rather critical apprehension which exists amongst the agricultural community. If the Minister gives an undertaking that he will have regard to the matters mentioned in the amendment he will probably satisfy those who are apprehensive and also the mover of the amendment.

I have no hesitation in giving that.

Does this involve the importation of coal on a large scale?

I do not profess to be a technical expert, but so far as I know, the main item of cost is the capital equipment. The fuel used is predominantly electricity, and in so far as solid fuel is required, turf is quite satisfactory.

I know how embarrassing members of the House are when they propose, like Senator Johnston, to put certain facts before Senators. The position of farmers in regard to this scheme is that we are considerably apprehensive about the consequences of the operation of this measure. One has only to read what the Minister has said. I think this has a vital bearing on the case which Senator Johnston has made. The Minister said on the last day we discussed this here: "We must have as our aim the supply of agricultural fertilisers to farmers at prices which will not put them at a competitive disadvantage with farmers elsewhere. It may not be possible to do that from the first day on which the wheels of the new concern will start to move, or it may not be possible to do that on occasion when fluctuating economic conditions impose difficulties or give advantages elsewhere; but if, over a reasonable period of time, it succeeds in doing that then it passes the test of efficiency which, I think, we should apply to it."

The point I want to make is this. It may not be possible to do that from the first day on which the wheels of the new concern start to move but there is not period when it is more important that farmers should have the raw materials cheap than at the particular period when the first supplies will be coming from this industry. The Minister has not indicated how long in his view it may taken until we have supplies from the new industry here but I suppose we will have them in a couple of years. There is a possibility of another depression similar to that experienced after the last war. There are justifiable fears for this again happening but if we are going to be faced with the position where we will have to buy sulphate of ammonia at higher prices than at which the Dances, Australians, or New Zealanders can buy it, we will not be able to complete against them. We will have reached the stage, we hope, in a few years when certain branches of our industry will have got back to the position of having an exportable surplus of butter and bacon but if the farmers in Denmark and New Zealand can purchase sulphate of ammonia at even £1 a ton less than we can in this country, we will not be able to meet them and if we export, the return to the farmers here will be reduced to the extent that our raw materials are higher than the raw materials of our competitors. Farmers cannot be expected to produce food for export, which is necessary to secure the raw materials for Senator Summerfield, Senator Clerkin and other industrialists, if they cannot compete and those raw materials can only be paid for by the exportable surplus of our agricultural industry.

I regard it as nationally essential that we should be provided with this industry. If, however, that is done I do not think the burden of substaining the industry in its early years should be put absolutely on the shoulders of the farmers. It should be regarded as a national enterprise. If the burden of carrying it is heavier on our farmers than if they were to secure the equivalent material from outside, then I think the burden should be shared by the rest of the community with them. I put it to the Minister that he should in the early years, when this industry is trying to find its feet, ensure that the raw material from it will be available to our farmers at the same price as that at which the foreigner can supply it. If that is not done our farmers are going to be considerably handicapped, and to the extend to which they are the nation will be retarted in its progress.

This amendment afforded an opportunity of drawing attention to one of the principal factors in high prices and in any hope of bringing about a reduction in prices. We had an interesting debate here last week on prices. I did not take part in it because the Minister had so eloquently set out so many facts which I well knew to be facts, and with the interpretation of which I thoroughly agreed. Because of that I did not see the necessity of making any contribution to the debate. I thought that the Minister made a very good case when dealing with a very difficult situation. The root of the matter is that we are suffering from a scarcity of supplies, ultimately due to a lack of domestic output and a lack of imports. The only hope of reducing prices and of improving the cost-of-living figure in the near future is more production and still more production. The only hope of doing that, so far as the agricultural community is concerned, is by the liberal use of artificial manures of which our agriculture has been starved in the last seven years and, to some extend, during the last 15 years. May I illustrate that point? I am aware of a farm of some 20 acres of usable land down in Tipperary.

The gross output from the 20 acres of this land last year was about £220 in value, including the value of the produce consumed in the household, which represented about half that total. That farm has been starved of phosphates for decades. I am quite convinced, from my knowledge of it and of all the circumstances, that if we could have got adequate supplies of phosphates for it, it would be easily possible to raise the output on the farm to at least £300. That farm is typical of thousands of other farms up and down the country, and the reason why our agriculture output is only what it is is precisely because of this deficiency of chemical manures.

It was mainly in order to emphasise the frightful importance of that fact, and the importance of getting back again to the use of adequate quantities of chemical manures in all of our agricultural operations, that I introduced this amendment. When speaking on another occasion, I calculated that our phosphate starvation has amounted to as much as 2,000,000 tons over the last 15 years as compared with the standard application of phosphates during the period of 1929 and 1930. Therefore I suggest it should be public policy to endeavour, as rapidly as possible, to secure at a favourable price the application of adequate amounts of chemical manures of the right kinds—there are three kinds involved—nitrogenous, potassic, and phosphatic. I am quite prepared to believe that the Minister realised the importance of these matters, and realises them still more than he did ten or 15 years ago when he restricted the import of phosphates from Belgium in 1932 and 1933. At that time he had undoubtedly regard to the desirability of preserving the availability of the supplies of phosphates from our own factories, but he had not perhaps adequate regard to the desirability of doing so at a price which would induce our farmers to apply an adequate amount of those phosphates to the land.

The application of phosphates certainly suffered very considerably in the subsequently years. I am quite willing to believe that the Minister now fully realises the importance of these matters, and that he has learnt something in the last 15 years just as all of us have learnt something. On that understanding, I am quite prepared to accept his assurance that he will, as a matter of course, act in the spirit of the amendment, even though he has certain sentimental objections to writing it into the terms of the Bill.

Amendment No. 2 by leave withdrawn.
Question—"That the Bill be received for final consideration"—put and agreed to.
Agreed that the Final Stage be taken now.
Question proposed: "That the Bill do now pass."

On that question, I want to say that on the Committee Stage of the Bill I used certain words which Senator Sir John Keane very properly resented. On reflection, I realise that these were words which should not have been used by me or by any responsible Senator. The interpretation which the Senator put on them was quite in accordance with the words used, but not the meaning that I had when I used them. I hope that the Senator and the House will accept my explanation.

I have had some private conversations with the Senator during which I asked him not to do what he has done just now. I fully accept what he says. Perhaps in a moment of exuberance we all say things which we should not say. We have all done it. I accept fully the statement which the Senator has made and the regrets that he has expressed.

Before the Bill passes I should like to say a few words arising out of Senator Sweetman's statements so as to avoid misunderstanding. I want to say that there is no intention that this company will manufacture whiskey or gin. With regard to liquers, like Benedictine and Chartreuse and other similar products which are based on industrial alcohol, I hope that if they are manufactured in this country they will be manufactured by private concerns. I would regard it as desirable that this company would not engage in their production if private firms can be interested, and I certainly would contemplate approving of their doing so only if it were clear that private enterprise was not likely to engage in that business in any reasonable time.

I would also like to give an assurance that the company will not knowingly sell industrial alcohol for the purpose of allowing it to be used in the adulteration of Irish whiskey. It is clear that the law at present permits any person, by way of trade, mixing alcohol with whiskey. The mere fact that industrial alcohol will be produced within the country will not add to the opportunities of doing so. If there is a case for exercising control over the production of whiskey to prevent such adulteration, or over the export of whiskey so as to prevent the sale of inferior products abroad interfearing with the main prospects of our distilleries developing an export trade, then it can be considered.

I would also like to say that, so far as the company in Cork producing gin is concerned, I am an admirere of that concern. I have publicly and privately expressed my appreciation of their enterprise both in that branch of their business and in others, and I sincerely hope that their trade in gin will proposer, and that they will earn from it profits high enough to cause perturbation to those who are constantly critical of the capacity of Irish industrialists in that respect, so long as those profits are earned in a free market and on the quality of their products. The board of Ceimácí Teoranta will be concerned to see that nothing which that company may do will in any way prejudice the success of that firm's gin manufacturing enterprise.

There is one further matter which I may mention for the purpose of clarity. In connection with sulphate of ammonia, even if the legislation were passed and the debates which such legislation would give rise to had concluded and the company may do will in authority and the financial resources to engage in the production of sulphate of ammonia to-day, it would, I think, be several years before the plant could be constructed and certainly before it could be supplied with the electricity and other materials it would require. Therefore, there is little prospect that the manufacture of sulphate of ammonia here will be begun in the very near future, or that our present deficiency of sulphate of ammonia will be made good by our own production in the near future.

Question put and agreed to.
Business suspended at 6 p.m. and resumed at 7 p.m.