Restrictive Trade Practices (Confirmation of Orders) Bill, 1958—Second and Subsequent Stages.

Question proposed: "That the Bill be now read a Second Time."

This is a Bill to confirm and give the force of law to two Orders which have been made under Section 9 of the Restrictive Trade Practices Act, 1953, relating to trade practices affecting the supply and distribution of grocery goods and provisions. The first of these Orders was made by my predecessor in December, 1956 and the second Order, which is an amending one, was made by me last July.

The report of the public inquiry which was held in the matter by the Fair Trade Commission, and which is available to Senators, shows that a substantial proportion of home manufactured grocery goods and the bulk of imported goods reach the retail trade through wholesalers. On the other hand, the larger retailers tend to buy direct from the manufacturers, while multiple shops generally obtain their supplies direct from manufacturers and brokers. The proportion of goods supplied by manufacturers direct to the retail trade tends as a whole to increase, particularly in the Dublin area where most manufacturers are located. Certain home-produced proprietary goods are distributed on the basis of straight quantity terms which are available to all traders. A few home manufacturers of proprietary goods differentiate between terms to wholesalers and terms to retailers by quoting separate prices without additional quantity terms, but, in respect of a wide range of home-produced foodstuffs, manufacturers also provide for a scale of quantity terms for retailers.

The commission's report indicates that, except in the case of the jam, there was no evidence of collective price or margin fixing for home-produced proprietary goods. The Irish Jam Manufacturers' Association had, however, a common list of trade prices for the jams and marmalades produced by members, a common standard of qualifications for the grant of trade terms, a common classification of traders for the grant of these terms and also uniform quantity discounts. Retail prices were not fixed by the association.

At the time of the inquiry, there were two associations of retail grocers —the Retail Grocery, Dairy and Allied Trades Association (R.G.D.A.T.A.) and the Cash Grocers' Association. Members of R.G.D.A.T.A. were expected by their organisation to maintain retail prices fixed by manufacturers and wholesalers and approved by the association. The Cash Grocers' Association maintained that the individual retailer should determine his retail prices on the basis of the net cost of the goods to him having regard to such factors as demand and rates of turnover.

At the time of the inquiry, there was only one general wholesaling association, the Association of Wholesale Grocers, Importers and Distributors. There was also a number of wholesalers' and retailers' associations concerned with particular commodities, such as butter, tea, salt, jam, cocoa, soap, candles, polish, etc. Most of these associations had, at one time or another, collectively fixed selling prices to retailers but, with one exception, had discontinued the practice for a considerable time prior to the inquiry. The practice adopted by the Jam Manufacturers' Association, to which I referred earlier, constituted an outstanding case of collective price fixing. There was also evidence of consultations between individual manufacturers in respect of the price of cheese and margarine.

Out of 34 manufacturers who gave evidence at the inquiry, six followed the practice of suggesting or recommending prices at which wholesalers should sell to retailers. Twenty-seven of the 34 manufacturers indicated in one way or another the prices to be charged by the retailers. Many of the manufacturers had, on occasions, either at the instance of R.G.D.A.T.A. or on the complaint of traders, requested price cutting retailers to maintain the fixed prices. Some manufacturers had stopped supplying certain retailers who declined to comply with these requests.

As I have already said, the principal association of retail grocers, R.G.D.A.T.A., expected its members to maintain retail prices fixed by suppliers and approved by the association. The means adopted by R.G.D.A.T.A. to enforce its policy consisted principally of requests to suppliers to withhold supplies from "offending" retailers and requests to members not to buy from suppliers who refused to discontinue supplies to these retailers. Manufacturers were asked to cut off all supplies even though their own products might not be involved. If wholesalers continued to supply price cutters, R.G.D.A.T.A. took steps to have supplies to the wholesalers cut off by the manufacturers.

Some time prior to the inquiry, R.G.D.A.T.A. had made very strenuous efforts to enforce its policy in relation to resale price maintenance in the Dublin area. Members were instructed to maintain prices of proprietary goods and to deal only with wholesalers or other suppliers who refrained from supplying traders engaging in what the association regarded as unfair trading practices. A list containing the names of 26 retailers was circulated to the manufacturers concerned requesting them to ensure that their proprietary goods were sold at the recognised prices by retailers on the list. It was indicated that if the goods in question continued to be sold at prices other than their recognised retail prices, members of R.G.D.A.T.A. would find it impossible to compete at such prices and would have to discontinue stocking those goods.

The commission's report indicates that in 1954 a co-operative society, entitled Allied Dublin Merchants, Limited, A.D.M. for short, was formed by a number of Dublin retailers to conduct a wholesale grocery business. Membership of A.D.M. was open only to traders who were members of R.G.D.A.T.A. Sales were made mainly to members at cost plus a flat rate of surcharge to cover expenses. The Wholesale Grocers' Association opposed strongly the granting of wholesale terms to A.D.M. and some of the principal brokers refused to deal with the society. A number of manufacturers refused to accord wholesale terms to A.D.M. and these manufacturers appear to have been influenced largely by the refusal of wholesalers to recognise A.D.M. as a wholesaler.

So far as resale price maintenance is concerned, the conclusion of the commission is that the practice, whether enforced collectively or enforced by individual suppliers, operates against the public interest and should, subject to certain conditions, be prohibited. They point out that, if the prices of proprietary goods were effectively maintained, the pressure of price competition would be apt to fall with increased severity on goods the prices of which were fixed at the discretion of the retailer. The existence of branded price-maintained goods tends to lead not only to the opening of new grocery shops but to the distribution of grocery goods through shops outside the grocery trade. Hence, in the opinion of the commission, resale price maintenance is a factor making for an increase in the number of retail grocery outlets.

The commission point out that it is possible for a trader to increase his business by reducing the services he provides if by so doing he can offer an alternative inducement to his customers in the form of reduced prices; and in the opinion of the commission it is not fair to deny the consumer some compensation in prices where goods are paid for and taken away rather than delivered on a credit basis.

The commission take the view that if resale price maintenance were abolished, the pressure of price competition, by being more diffused, would tend to be less severe on particular groups of commodities. Intensive price competition, if it did occur, might be expected to constitute a transitional phase only, and no more than that, and the trade would quickly adjust itself to the new situation. In the opinion of the commission, there was every likelihood that the independent trader would maintain his position in the trade.

Evidence given at the inquiry made it clear that a comprehensive system for the collective maintenance of resale prices might have been successfully established which by eliminating price competition in proprietary goods would have raised further the prices of those goods in areas where competition previously existed. The ground work would have been laid for an extension of the practice to its furthest practicable limits. A policy of trade boycotts by an association as a means of maintaining resale prices is, in the commission's view, undesirable and could operate unjustly to the detriment of particular traders. The maintenance of resale prices by an individual supplier would result in an undesirable rigidity of prices which, in the opinion of the commission, would not be in the public interest. If such maintenance received legislative sanction it would probably be adopted more widely and practised more effectively than before, though recent British experience may suggest the contrary. If individual resale price maintenance were permitted, a strong association of traders could induce first one manufacturer and then another to increase their margins. Restrictions, once established, tend inevitably to lead to further restrictions, whereas the abolition of price maintenance would allow competition to act as a check to the extensive expansion of trade margins. The commission consider that competition at both the wholesale and retail levels is beneficial and should not be hindered by the maintenance of prices at either level.

The commission recommended that certain safeguards should be provided against the contingency that extreme price competition might arise for short periods in the larger cities. They propose, therefore, that a supplier should be allowed to withhold supplies from a retailer who resells a branded product at a price equal to or less than its price to retailers before the deduction of any quantity discounts. Where there is no trade discount, or only a scale of quantity discounts, it is proposed that a supplier might withhold supplies if the retailer resells at a price equal to or less than the price to retailers of the minimum quantity prescribed in the scale.

In order to ensure flexibility, it is proposed that the commission may, if they think fit, require a supplier to substitute for the wholesale price of his product, as defined, the average price charged to one or more classes of retailers in one or more areas. The commission also propose that a supplier may withhold goods from a retailer who advertises or displays a lower price in conjuction with the supplier's suggested or recommended retail price, provided that if the supplier affixes a price to the container of the product the retailer may, within the premises where the product is exposed for sale, display a price less than the supplier's price. The commission also recommend that a supplier should be free to withhold goods from a wholesaler who refuses to cease supplying a retailer who resells a branded product at or below the wholesale price or who advertises the supplier's suggested retail price in conjuction with the retailer's own price. It is envisaged that a supplier would have to notify the commission of the withholding of supplies in any of these cases and that the commission would have the right to review the action taken.

Dealing with the question of trade terms, the commission point out in their report that quantity discounts should, as accurately as possible, reflect the economies accruing to the supplier from supplying goods in quantity. The commission are of the view that there is nothing unfair or undesirable in the integration of wholesaling and retailing functions. Reasonable grounds were advanced by witnesses for distinguishing between different classes of wholesalers in the terms allowed by manufacturers and the commission see no objection to the adoption on an equitable basis of such distinctions by a manufacturer in the light of his particular distribution problems.

They recognise, however, that a retailer may seek wholesaling status primarily to secure higher discounts for his retail business and they suggest, therefore, that manufacturers should consider allowing wholesalers' terms only in respect of goods resold to other retailers. Subject to fairness to all concerned, the commission consider that the terms to be allowed to co-operative wholesale societies and to multiple shops, having regard to the relative size and the functions they perform, should be left to the discretion of the individual supplier.

I should perhaps mention at this stage that, after the report of the public inquiry had been presented to the Minister, the commission became aware of a concerted movement on the part of certain suppliers to grant unfavourable trade terms to certain cooperate societies. The commission subsequently made fair trading rules under Section 4 of the Restrictive Trade Practices Act, 1953, prescribing that, subject to certain conditions, these co-operative societies should be allowed at least the most favourable terms available to a multiple shop firm not more than one-fifth of whose purchases of a supplier's goods were for resale to independent retailers.

The commission have made it clear that they are prescribing a minimum status and they have emphasised that this should not be taken as indicating the maximum permissible status for such bodies and that they would not consider it unreasonable for any manufacturer to accord to such a society best wholesale terms even if they were not available to multiple shops.

The commission state in their report that there was no evidence that entry to the trade at any level was limited or controlled by collective arrangement or that membership of a trade organisation was made the condition of the supply of the goods. Nevertheless, the commission deem it prudent to recommend that control of entry to the trade should not be exercised by any association or group of suppliers or traders.

The commission also consider that it is contrary to the public interest for any organisation to take action to prevent development of new methods of trading. With regard to the attitude adopted by R.G.D.A.T.A. towards certain co-operative societies, the commission conclude that collective action to exclude a co-operative society from trading at any level constitutes a restraint of trade which is unfair and operates against the public interest and they recommend that it should be prohibited.

The commission consider that the collective fixing of prices and margins is not in the public interest, and they recommend that such arrangements should be prohibited. It is the view of the commission that, in a small market such as ours, partial or total removal, by concerted action, of price competition is liable to lead to stagnation, by removing a stimulus to the development of more efficient methods of production or distribution.

With the object of removing the abuses which exist and restoring conditions of free and fair competition in the trade, the commission recommend that an Order should be made prohibiting the particular practices which are considered to be harmful to the public interest. They recommend that, subject to the adoption of safeguards against the contingency of excessive price competition, resale price maintenance should be prohibited and that it should be made possible for retailers to determine their own selling prices in the light of their own operating costs.

They recommend also that there should be a prohibition on the collective fixing of suppliers' and retailers' selling prices, and that it should be made unlawful for a supplier to withhold supplies from any trader on the grounds that he is or is not a member of a particular organisation or association or because his name does not appear on an "approved" list.

The commission recommend furthermore that no trade association should be permitted to coerce a supplier to withhold supplies from any person and that no association should be allowed to prepare or publish lists of "approved" or "non-approved" persons which are likely to restrict entry to the trade in grocery goods or likely to be used as a basis for regulating or influencing the supply and distribution of the goods or the terms and conditions on which the goods will be supplied.

There are, finally, two recommendations by the commission regarding the imposition by individual suppliers of terms and conditions for the acceptance of orders. Firstly, it is recommended that there should be a prohibition against a supplier exercising unfair discrimination in respect of the supply and distribution of the goods. Secondly, it is recommended that a supplier should be permitted to impose conditions covering such matters as the size and frequency of orders.

The only reservations are that these conditions should be reasonable, that they should be applied equitably to all persons seeking supplies and that, where the commission so require, they should be filed with the commission. The commission do not consider that a supplier should be prevented from advertising or specifying a maximum resale price for a branded product or from withholding supplies from traders who sell at a price in excess of such maximum price. Any such specified maximum price should not, however, be binding on traders as a minimum price.

I have given very careful consideration to the recommendations of the Fair Trade Commission and I am of opinion that the commission were justified in making the recommendations which are contained in their report. I am satisfied that it is contrary to the public interest that competition should be restricted by the operation of arrangements for the enforcement of resale prices. I consider also that it is wrong that vested interests should, by a policy of trade boycotts or otherwise, attempt to enforce resale prices or to prevent the supply of goods to any trader or influence the terms and conditions upon which the goods will be supplied.

The Order which was made in 1956 by my predecessor was designed to give effect to the recommendations contained in the report of the Fair Trade Commission but the necessary Bill to confirm the Order was not introduced at the time. As a result of a study which I made of the Order, I came to the conclusion that it required amendment in some respects to render a number of its provisions more equitable.

I accordingly made an amending Order which involves three main amendments of the original Order. Firstly, it will permit a trade association to bring to the notice of a supplier any case in which a retailer resells a branded product at or below a specified wholesale price or sets out to contrast his own lower price with the supplier's recommended price for such a product. I should like to emphasise, however, that an association availing of that provision will be prohibited from exerting any pressure whatever on the supplier to withhold supplies from, or otherwise discriminate against, the retailer.

The second amendment is designed to make it clear that a supplier or a wholesaler, or a combination of wholesalers, may divide customers—that is to say wholesalers or retailers—into different classes for the purpose of applying, to the acceptance of orders for goods, different terms and conditions to each class. The effect of that provision will be that individual suppliers and wholesalers will be free to classify their customers in accordance with the functions which they perform or in accordance with the quantities of goods which they purchase. Senators will note that the classification accorded to any wholesaler or retailer will be capable of being reviewed by the commission and, if the commission are of opinion that the classification is unfair, the supplier will be obliged to make whatever alterations the commission may require.

The third amendment effected by the Order which I made last July is designed to permit an individual manufacturer to adopt a schedule of rates of discount prepared by a trade association of which he is a member and to relate quantity discounts for a particular product to the total purchases of that product made from all manufacturers who are members of the association. It will, however, be unlawful for an association to coerce a manufacturer into adopting any such schedule of rates; and the commission will be entitled to review any schedule of rates prepared by an association and to require the association to make whatever alterations the commission see fit.

Since the Orders were published, I had many representations to the effect that they are unfair to certain sections of the trade and that they will, when confirmed, have adverse effects on the trade as a whole. It has been asserted for example that the Orders favour the large trader at the expense of the small and that, with the growth of competition, the tendency will be for the small and medium sized trader to be eliminated. It is claimed that the Orders interfere unduly with the rights of traders to combine for the purpose of protecting their interests.

With regard to these criticisms, I must point out that in their report of the public inquiry, the Fair Trade Commission adverted to the argument that the abolition of the maintenance of resale prices would lead to the elimination of the small independent trader. Having examined the matter in all its aspects, the commission came to the conclusion that in the long run there was every likelihood that the small independent trader would maintain his position in the trade. As regards the right of grocers to combine for the protection of their interests, I should like to point out that there is no objection to their exercising that right provided they do not act against the public interest. I want to make it perfectly clear, however, that the Government will not tolerate or sanction action designed to maintain artificially high profit margins in relation to food products purchased by every household in the country.

It has also been represented to me that under the Orders it will be possible for large wholesale/retail combines to use their special position to drive small traders out of business. It has been suggested that, by working on their wholesale margins only, these large firms will be able to sell retail at a lower price than the small grocer can buy from wholesalers. The amending Order which I made last July provides that the Fair Trade Commission, on its own initiative, or following a complaint, may investigate the terms and conditions imposed by suppliers or wholesalers and, if the commission think that these terms and conditions are unfair, they may direct the supplier or wholesaler concerned to make whatever alterations in the terms and conditions may be considered necessary by the commission. I am perfectly satisfied that this provision will enable the commission to deal with any complaints of inequalities in the buying power of grocers of different classes.

It has been strongly urged that resale price maintenance at the retail level should not only be permitted but be made enforceable by law, as it is in Great Britain, or, alternatively, that the law should provide that all retailers must take a minimum margin of profit on wholesale prices. I must emphatically reject both these proposals, however. I think that the case for resale price maintenance in the grocery trade has been very thoroughly demolished by the Fair Trade Commission and I agree entirely with the commission's view that this practice in that trade is contrary to the public interest and that it should be prohibited. I am satisfied also that the notion of a legal mark-up on wholesale prices of grocery goods is completely impracticable. I cannot conceive of any system to be enforced by law which would work or which would be fair to all concerned.

The Bill which is now before the House is the Confirmation Bill which is necessary to give the force of law to the two Orders which have been made. In the case of Confirmation Bills of this kind the arrangement is that the Orders which it is proposed to confirm are not capable of being amended by the House but are accepted or rejected as they stand. The matters dealt with in the present Orders have been the subject of a detailed public inquiry by the Fair Trade Commission and the evidence and views of the commission are set out fully in their report. I recommend that the House should approve of this Bill which, on enactment, will, I trust, put an end to unfair restrictive practices in the grocery trade.

The purpose of this Bill is to give the force of law to two Orders which have been made under the Restrictive Trade Practices Act, 1953—one as far back as December, 1956, and the other in July of this year. I think it is to be regretted that before this Bill was put to the House, the provisions of both these Orders were not combined and one unified Order introduced. The fact that there are two Orders makes it much more difficult for the members of the trade, from the manufacturers right down to the retailers, to understand all their terms and provisions. One Order would have been far better.

Before I go further in regard to the Orders, there is one matter I want to stress. I should like to point out that there is absolutely no justification whatever for the allegation or implication that excessive margins of profit are being earned, or, indeed, can be earned, in the grocery trade. That, in my opinion, is a complete fallacy. I can assure the House that the various manufacturers, in their own interests, take every care to ensure that their goods are sold to consumers at the keenest prices and that the percentage of profit available for the distributor is kept to a minimum. This has resulted in distribution costs in Ireland being far lower than in any other country in Europe.

With the passing of this Bill, these two Orders will have the force of law. The House should appreciate that the giving of legal force to these Orders will undoubtedly widen the field of competition in the sale of groceries. This will result in the larger, the financially stronger and more favourably placed, firms or stores being put in a better and stronger position as compared with the average or medium-sized retailer. Because of their special position, these larger firms will be able to sell at keener prices. This will mean that people will be forced out of the trade, not because they are inefficient, but because they have not the finance to sell certain goods at a loss and because they cannot buy on as good terms as their more fortunately placed competitors.

Many here know of the attempt made a few months ago by a wholesaler in the West of Ireland to use his special position to again complete control of the retail trade in a certain town and unfairly to eliminate his retail competitors who had not his special buying advantages. His plan was to sell retail at prices at which many of them could not even buy their goods. That could not happen again in several of our country towns and the Orders could be used as an excuse by an unfair trader for such action.

The Fair Trade Commission, now that it has been given special powers for the first time, must, therefore, make sure that the Orders will not be used as an excuse by the few to trade unfairly and to gain monopolistic control of the trade in our towns. The commission can do that by making certain that the safeguards in the Orders are carried out. These safeguards are very important, but, unless their provisions are carried out by the manufacturers and unless the Fair Trade Commission restrains the unfair practices of the few, there will undoubtedly be a very serious dislocation in the trade and many grocery employees will be thrown out of work and many of the proprietors will be forced to close down and take the emigrant ship.

The Fair Trade Commission must, therefore, make sure that the manufacturers give the opportunity to all retailers to buy their goods on the best terms. At the present time, such advantages are available only to a few, who, because they have such advantages, can sell at prices cheaper than the vast majority of the trade. That position is grossly unfair. If it continues, it will result in "the unjust elimination of trade competitors" and will secure for these few "a substantial or complete control of the trade contrary to the public interest".

The Minister has stated that part of the aim of the Orders is to prevent a trade boycott; but surely if traders are being forced out of business and are being denied the right to earn their livelihood by the unfair activities of the few, such traders must try to protect themselves. For the life of me I can see no difference between that position and the position in which the employees take strike action to prevent their wages being reduced or to get a higher wage.

The 1953 Act, under which these Orders are made, states that they should be made so as to provide "equitable treatment for all persons in regard to the trade". The Fair Trade Commission should therefore make certain that the provisions of these Orders are carried out so as to give that equal treatment to all. The commission must, accordingly, ensure that the safeguards are enforced and that all retailers are given the opportunity to avail of facilities to buy on as good terms as their stronger and more fortunate competitors.

Finally, I hope that the Minister will review the operation of these Orders from time to time to make certain that they are achieving their purpose of bringing fair trading to the grocery business and that, in the light of experience, he will be prepared to alter or amend the Orders where necessary.

I should like to start by differing from Senator O'Keeffe in my attitude towards this Bill, and to say that I agree entirely with the spirit, as expressed by the Minister, which lies behind this Bill to confirm these two Orders.

Before coming to the main points I want to make, I should just like to deal with one point made by Senator O'Keeffe in relation to the advantages which big traders and multiple stores have over small traders, unless the small traders are allowed to organise themselves so as to maintain retail prices at a certain level. He says that because the big stores can sell cheaper, the small trader will be put out of business if these restrictive trade practices are stopped or eliminated. I submit that what he is arguing is that we ought to allow the small traders to keep grocery prices artificially higher than they need be, in order to keep the small men in business. To suggest that that is wrong, and that it is not in the public interest, is not to suggest that one has no sympathy with the small trader, but that the whole trend of modern business is against him.

The suggestion that this will be a method of "giving employment" to the small trader means, of course, giving employment at the expense of the public, and frequently at the expense of the poorest section of the public. When Senator O'Keeffe mentions "employees who may be thrown out of work," there is not a field of modern endeavour, in industry or agriculture, about which the same argument could not be put. It is the kind of argument used all over the place in the past against the introduction of machinery: that we could give more employment by doing the work less efficiently.

Therefore, while one may sympathise with the small trader and with his employees, the fact is that we cannot set the clock back, and if this means that some of these people go out of business, it must be recognised that the major good is the public good. There is no use saying: "Let us go back to the horse plough instead of the tractor, because it will give more employment; let us go back to spades instead of the horse plough, because that will give more employment still; let us dig with spoons instead of spades, because that will give further employment." There is no use in saying that this inefficient method of "giving employment" to more and more small shopkeepers should be subsidised by the public purse, while allowing the organised fixing of prices.

Consequently, I welcome very much this Bill which is to confirm Orders already made and which have had already a very considerable effect upon the prices of provisions and groceries. Every Senator knows that attacks are often made in public, at dinners and so on, on the cut-price shops. The cut-price shop, in fact, would be better named the fair-price shop.

Not at all.

Senator McGuire intervenes to say: "Not at all". I think even Senator McGuire is not averse to cutting prices sometimes in terms that are adjectivally described as "sensational".

We never use the word nowadays.

A sensational price cut will bring customers to a shop. Senator McGuire knows that as well as I do. What brings people to shop at cut-price grocers is that they get a fairer deal than they do in places where the prices are higher. It is worth noticing that many members of R.G.D.A.T.A. are now resorting to what was previously regarded as an infamous procedure and are now cutting prices. It really means reverting to the old terms of competition, of which, I think, Senator McGuire is very strongly in favour.

When you talk about cut-price and cut-throat competition, there is a derogatory air about the phrase which seems to me to be grossly unfair. If these people are so "unfairly" cutting prices as to cut their own throats, then they put themselves out of business; but, in fact, they are reaping a reasonable profit. The cut-price or fair-price grocer is not in it purely for his health. They are not all philanthropists. They do a great service for the public, particularly amongst the poorer sections of the public, and the public supports them widely. The best justification for the cut-price shop and the cash grocer is the widespread public support attending them, which no amount of name-calling can assail. They protect the interests and the purses of the customers, and not exclusively the interests of the retailers, the wholesalers and the manufacturers.

I noticed, incidentally, that the Minister in speaking to-day and in giving a very good and fair review of the proceedings and findings of the Fair Trade Commission, referred to the evidence given by the wholesalers, by the retailers, by members of R.G.D.A.T.A., by the Cash Grocers' Association and by various organisations of manufacturers; but he made no reference to the evidence given on behalf of the consumer. I suggest that that represents a subconscious official attitude: that the only people of importance in any trade are the wholesalers, the manufacturers, the retailers and so on, and that the consumer has to take what he gets. The consumer is relatively unimportant, so unimportant that the evidence given by consumers in favour of the cash grocers is not so much as referred to by the Minister. I am sure that was quite unintentional, and that it was unconscious on the Minister's part, but I think it does reveal a subconscious attitude. I should like to see just a little bit more thought about the consumers' interest and a little less emphasis on the woes of the traders.

It is sometimes said in relation to these cash and cut-price shops that there is unfair trading because they use non-union labour, that the shops are dirty and so on. There are ways of dealing with that if it exists. That can be effectively dealt with by the trade unions and by the health services, both municipal and State. The way to deal with it is directly, and not by inflating prices.

The effect of the Orders, the confirmation of which is the purpose of this Bill, was excellent. You have now in Dublin and throughout the country real competition in groceries. You have keen trading. The trader who gives the public the best value gets the greatest public support. Some people may weep and moan about that, but it seems to me to be a perfectly natural thing that the trader who gives the best value gets the best support.

The Minister and the Government realise that the effect of these two Orders was, not perhaps to keep the cost of living down, but at any rate to prevent it from rocketing quite considerably higher. The Minister realises, as is shown in his concluding words, that the commodities dealt with under these Orders are the vital living necessaries of every member of the community. Consequently, preventing those prices from rising and from being artificially inflated is really a very big public service, and therefore the effect of these Orders, as they were made and as they have been acted on since they were made, has been very good indeed. I feel we should have little sympathy with trading cliques who seek to control the whole trade for their own narrow private interests. A lot of talk is heard about "free enterprise"—free to do what? Is it free to hold the public to ransom or free to trade competitively? If it is the latter, well and good. If it is simply freedom to control the whole trade for narrow private interests, then it is to be deplored and to be fought.

The good trader—and I think this is general—welcomes competition, and I challenge Senator O'Keeffe, Senator McGuire, or any other Senator to deny that the public derives benefit from competition, and therefore I welcome the various statements of the Minister, when he told us, for instance, that

"in the view of the commission certain practices existed which interfered unfairly with competition and operated against the public interest"

or again when he said in regard to resale price maintenance:—

"So far as resale price maintenance is concerned, the view of the commission is that the practice, whether enforced collectively or by individual suppliers, operates against the public interest and should subject to certain conditions be prohibited."

There it seems to me that the Minister is speaking for the community, and I was particularly pleased to find him saying that he is

"satisfied that it is contrary to the public interest that competition should be restricted by the operation of arrangements for the enforcement of resale prices. I consider also that it is wrong"

—as the Minister said—

"that vested interests should by a policy of trade boycotts or otherwise, attempt to enforce resale prices or to prevent the supply of goods to any trader or influence terms and conditions on which the goods will be supplied."

I think we should welcome that attitude and applaud the Minister when he speaks thus. Or again when the Minister said:—

"I want to make it perfectly clear, however, that the Government will not tolerate action designed to maintain artificially high profit margins in relation to food products purchased by every household in the country."

To those statements, I say: "Hear, hear!" and I hope that the majority of Senators will similarly applaud, when the Minister speaks thus in the public interest. It is good to find that the Minister feels so strongly on the point. I am particularly happy to find the Minister unambiguously approving of the Fair Trade Commission when they declare, for instance, that:—

"The commission consider that collective action, whether through an association or otherwise, by manufacturers or traders, for the enforcement of resale price maintenance would constitute an unreasonable restriction on the supply of goods and could lead to injustice to particular traders, and they recommend that it should be prohibited."

The Minister approves of that and I say that is good.

Again, the commission said:—

"In the opinion of the commission a collective arrangement or understanding between wholesalers relating to the prices to be charged by them is contrary to the public interest in that it involves an unnecessary and unreasonable limitation of free and fair competition and, accordingly, should be prohibited."

I find it gratifying that apparently the Minister strongly approves of such an attitude on the part of the Fair Trade Commission.

I must now confess that I have been practising an innocent deception in relation to the last two quotations which I have made from the Fair Trade Commission, and of which I think it legitimate to assume that the Minister wholly approves, because these two quotations were not from the grocery trade inquiry, but from the infant foods, proprietary medicines and chemists' prescriptions inquiry. On that inquiry by the same investigating body, the same findings were made and the same recommendations; yet the Minister on that occasion said: "The investigations carried out by the commission did not disclose a situation which required the making of an Order." I find that profoundly disturbing and profoundly puzzling as to why it is the Minister has changed his mind, as to why he has this double attitude towards grocers, on the one hand, and chemists, on the other.

An Leas-Chathaoirleach

Nothing the chemists deal in is in order in a discussion on this Bill and I think the Senator appreciates that.

I do. I am making the point that the Minister in stating unequivocally to-day that he is totally opposed to this resale price maintenance would appear to have been entirely in favour of what has been consistently said by the Fair Trade Commission in this inquiry; yet on the previous occasion the Minister curiously took another attitude.

May I again quote what the Minister said to-day:—

"The maintenance of resale prices by an individual supplier would result in an undesirable rigidity of prices which, in the opinion of the commission, would not be in the public interest. If such maintenance received legislative sanction, it would probably be adopted more widely and practised more effectively than before."

That is what the Minister said in the Dáil at column 645, Volume 171, and I notice that he used the same terms here before us. It is legitimate to ask the Minister, with your permission, what has been the cause of the difference in his attitude. Has there been a change of ministerial heart? Are baby foods and medicines less important than groceries?

An Leas-Chathaoirleach

They are not being dealt with under this Bill and the Senator is aware of that. We will have to get another Bill for the Senator to enable him to discuss that.

I am simply asking why it is that the Minister's fine principles are apparently to be restricted and confined to groceries, and not applied to infant foods and to chemists' prescriptions.

An Leas-Chathaoirleach

When that matter is before the House, the Senator may put that question. Until then, it is out of order.

There is a further point arising from that which is very strictly related to the grocers and I feel I shall not be ruled out of order in referring to it.

An Leas-Chathaoirleach

I hope the Senator is quite clear that, in the judgment of the Chair, he was out of order.

I understand that, and that is why I am endeavouring to pass from that to a question relating to the grocers, and I express the confident hope that that reference to the grocers will be in order, because the point I want to make is that in making this Order in relation to a certain type of trader, that is to say, a grocer, and in failing to make a similar Order in relation to other traders who deal in the same kind of material, the Minister is being unfair to the grocers. I think it is legitimate to make the point—I bow to your ruling Sir, if you decide otherwise— that in allowing other traders so to organise themselves grocers will be prevented from dealing in such things as infant foods—

An Leas-Chathaoirleach

The Chair has ruled on that matter and the Senator will please take note of the ruling of the Chair.

I accept your ruling although I do not really follow—

An Leas-Chathaoirleach


Do you mind if I finish my sentence?

An Leas-Chathaoirleach

The Chair has ruled on the point as not being in order on this Bill. It is not dealt with in this Bill and, accordingly, it is out of order.

I heard you say that, a Leas-Chathaoirligh.

An Leas-Chathaoirleach

I hope the Senator will accept the ruling of the Chair.

I hope you will allow me to finish the sentence, in which I was saying—

An Leas-Chathaoirleach

If the Senator's statement is in order, he is at liberty to finish the sentence, but I have given the Senator clearly to understand what I believe is in order. If he puts himself out of order, he knows the consequences from the point of view of the Chair.

I notice that, a Leas-Chathaoirligh, and I should like to be able to finish the sentence which I began twice, to the effect that I accept your ruling in this matter and I should be grateful, a Leas-Chathaoirligh, if, when I am saying that, you could momentarily allow me to finish the sentence, and not insinuate that I am rejecting your ruling when, in fact, I am specifically accepting it.

An Leas-Chathaoirleach

There is just one way for the Senator to accept the ruling of the Chair and only one way, and the Senator is as clear on that point as any member of this House.

I shall, in deference to your latest remark, a Leas-Chathaoirligh, refrain from indicating by any other means than by proceeding with my speech what I think of your ruling.

The Senator has no right to tell the House what he thinks of the Cathaoirleach's ruling. The Senator has no such right. He should not say to the Chair that he will refrain from saying what he thinks about the Chair's ruling. That is insolence, Sir—contemptible insolence, at that.

I was endeavouring to say that I was accepting your ruling. I was told there is only one way to accept it, that is, to proceed with my speech, and so I accept that second ruling and should like to be allowed to finish my speech.

An Leas-Chathaoirleach

The Senator is quite clear that he must not pass judgment on the ruling of the Chair. He must either accept it or resume his seat.

I have said I accept it, and the record will show that I have said so three or four times, a Leas-Chathaoirligh.

As I say, I hope the Minister will find it possible to explain to us just why it is that there would appear to be a certain—shall we say?—fluctuation in his attitude. I hope that he will continue to act in relation to prices and supplies with the same efficiency as he is acting now under these Orders which he is asking us to confirm in defence of the public and the good trader, and the good trader, in my definition, is the keenly competitive trader, not the self-protected trader. And I believe that from such an attitude and under such Orders the public and the good trader will both greatly benefit.

I am very glad, furthermore, that the Minister has resisted the "representations" on behalf of sectional interests, to which he referred in his speech to-day. I welcome that attitude on his part.

We must, therefore, I think, confirm these Orders by all means. The Minister has told us that:—

"The commission consider that competition at both the wholesale and retail levels is beneficial and should not be hindered by the maintenance of prices at either level,"

and, therefore, I should like to take this opportunity of congratulating the Minister on his attitude here to-day and welcoming the confirmation of these two Orders, and expressing the hope that their confirmation will set a headline for other trades.

I feel it is my duty, as a representative of the business community, to say a few words on this Bill. I doubt whether the Fair Trade Commission has been worth all the trouble and all the annoyance and all the confusion it has created. In respect of this Bill, the Minister went to great trouble and I congratulate him on the very exhaustive statement he gave us in connection with these two Orders. The very fact that he had to go to all that trouble to explain what is in them goes to show the confused case that is before us. I know quite a lot about trade and I should hate to be a grocer and have to follow out all the ramifications and implications of this Order. The whole idea of a Fair Trade Commission is very well-intentioned, but I think it is very ill-advised, from the point of view of its immediate effect on the trades concerned—in this instance, the grocery trade—and also from the point of view of the general atmosphere in which business operates to-day.

I have often referred to that matter before and it was referred to in the Dáil by Deputy Booth, who is a member of the Minister's Party. He referred to the atmosphere that was created by this whole thing and said, at column 657, Volume 6, of the Official Debates:—

"The Fair Trade Commission are now trying to interfere with the discounts to wholesalers and cooperative buying organisations. This completely unqualified body sets out to advise business men who have been in the trade for years and years and tells them how to adjust their discounts and their margins. I wish that people would interfere only when they know what they are talking about and would try to understand the evidence put before them."

I must include somebody talking to-day in that category. That is one of the points that come out even in this particular instance, namely, interference with trades by the State in a way in which it is not qualified to act.

Even in this case, the Minister also told us that the commission, having got together the grocery trade, can find only in the jam industry something on which they can put their finger. Even with regard to jam, the one point that was made was that there was collective fixing of prices. I could understand that there would be something wrong in the collective fixing of prices, if it were alleged that the margins secured in that way were exorbitant or immoral, but there is not a word about that. I do not know a great deal about the trade, but I know the people in it and I can safely say that the margin appointed by them would leave only a fair profit. There would be some case if it could be pointed out that it was unfair trading inasmuch as they were asking unfair margins and exorbitant prices, but there is not a word about that.

We hear all the talk about free and fair trade. It is always assumed that unfair trading is against the consumer. There is no question about the unfair trading against fellow traders, which has been referred to by several speakers. The Fair Trade Commission should not take into consideration only the implications of prices and collective arrangement of prices from the point of view of selling to the consumer cheap, regardless of giving a fair profit to the trader. That is where the commission has failed. At least, it has failed to get it over to the public that that is what it is concerned with.

With regard to this Order and other Orders made on the recommendation of this commission, it comes to this, that the traders are told that they must not sell below the cost price. That is very decent. If people in business had to sell their goods and services at anything less than the cost price, there would not be very much progress or prosperity in the country. These are very important points that have been overlooked.

I cannot resist saying a word about Senator Sheehy Skeffington. He always raises something that I feel I must answer. I was rather amused to-day to hear him all in favour of competition and fair trading. If I remember rightly, I have heard the same Senator in the past dissertating on the benefits of nationalisation, where there is no competition and no fair trading and no Fair Trade Commission, and these nationalised bodies that he wants set up in this country will have monopolies and a Fair Trade Commission will not be allowed to inquire into their activities and there will be no question of the profits they make.

Monopoly in the public interest, not in the private interest.

That is an easy "get-out".

An Leas-Chathaoirleach

Senators must confine themselves to the Bill.

I think enough has been said on this matter here to-day. I do not intend to detain the House, but I do want to say that it is maintained by traders in this and every other country that very often the fixing of prices or margins is in the public interest and in the interest of the consumer. I do not propose to prove that case, but anybody who likes to take the trouble can find out the arguments for that attitude of mind. I do question, and question very strongly, the assertion that the fixing of prices or margins is not in the public interest. I say it very often is, and in most cases, especially in the grocery trade, the fixing of margins and prices is of paramount interest for the consumer in relation to the quality they will get in the goods, and the services they will be given, and to the whole merchandising of grocery goods.

Senator O'Keeffe said it would be more convenient for members of the trade if, instead of amending the original Order, I had repealed it and re-enacted the amendments which I wished to make. That course was not practicable. It would have been followed if it had been possible, but in the situation in which the Order had been made, it could not be followed.

I agree with the Senator fully that there is no evidence that in the grocery trade excessive profits are being taken. I do not know, however, whether that is very relevant to our discussion. The purpose of this Order is to secure the effective elimination from that trade of certain undesirable restrictive practices which had been developing and which looked like growing because of the desire of an association of retailers to protect their margins and to secure a higher return from their operations.

I have no desire to prevent traders from getting a reasonable return and I think that the grocery trade as a whole were perhaps rather unfairly dealt with during all the years of the war as they were not merely affected by prevailing scarcities, but were held to quite small margins on available supplies by Government Order. Consequently, they were unable to finance the improvement of their businesses and the replacement of their fixtures and equipment to the extent that might have been possible, if war-time restriction had not interfered.

There is a great deal to be said for allowing the trade a reasonable return for the capital which is invested in the business and reasonable livelihoods for those engaged in it. Certainly I am completely opposed to the idea that it is in the public interest that prices should be reduced at the cost of cutting the margins of retail traders to an extent which makes it impossible for them to get a reasonable return on their investments and a reasonable livelihood for themselves.

I do not think Senator O'Keeffe is correct in his contention that the enactment of this measure will widen the area of competition in the grocery trade. I think it is true that the publication of the Fair Trade Commission's report on the grocery trade, and the recommendations regarding the type of Order that should be made, did have the effect of intensifying competition and encouraging a number of traders to make plans for their future operations on the assumption that this Order would in due course be enacted. But all that is over and I think the effects have already been experienced and this final stage of confirming the Order will not make very much difference. It is to be noted that the commission's evidence appeared to show that the intensive type of competition to which some traders objected is normally confined to larger cities and towns. Indeed, there is not a great deal of evidence that competition is very effective outside the cities.

It is not at all unlikely that some grocers will cease to be able to carry on business, but that is not a new situation. Indeed, the view at one time advanced by the grocers was that far too many were trying to get a livelihood in that business and they urged very strongly that some system of regulation should be introduced by the Government in order to reduce the number of grocers or to prevent new entrants. The evidence is that all during the years before the war, when these matters were not under consideration, regularly year after year, a number of grocers were unable to remain in business and went out of it. I am sure that is going to happen in the future and indeed in the private enterprise system the only force making for the improvement of society, the reduction of costs and the extension of facilities, is that fear of inability to secure trade in competition with more efficient neighbours.

I think it is quite nonsensical to talk about the cut-price shops being fair-price shops. Many of these have a very ephemeral existence and those who embark on this operation are either unable to calculate the minimum margins on which they can work or fail to get the volume of turn-over they assumed they would get. They upset normal traders for a time and then go out of business.

It is quite true that I made no reference to the evidence of the Housewives Association. I was not under the same compulsion as Senator Sheehy Skeffington in that.

It is a pity the Minister is not.

They went out of cut-price very quickly.

In my view, this report of the Fair Trade Commission on the grocery trade was the first report from them which desclosed a definite plan of campaign for the reinforcement of resale prices, both at wholesale and retail level. We have had other reports and Orders, but, in my view, they did not reveal the same situation threatening the public interest as the report on the grocery trade revealed. In the case of the grocery trade, the case against the maintenance of resale prices by individual suppliers was very effectively argued. I do not think it is correct to assume that the arguments advanced by the commission in relation to the grocery trade must necessarily apply to every other trade. I do not think they do. There might well be cases, as Senator McGuire argued, in which some tolerance of resale price maintenance would be in the public interest and not against it. As a general principle, I concede that regulation of any trade by legislation is justifiable only if there is evidence, after inquiry, of a situation grave enough to require that course.

Senator McGuire said that the Fair Trade Commission was not worth all the trouble it was causing. I think he missed what was perhaps the most significant point of the report on the grocery trade. They had evidence to show that there was a multitude of associations of manufacturers and wholesalers dealing with a variety of commodities, all of which had been actively engaged in price maintenance operations and all of which had ceased to do so following the enactment of the Restrictive Trade Practices Act. I remember arguing when the Act was under discussion in the Dáil that the most substantial benefit to be derived from it would come from its enactment long before the Fair Trade Commission had begun to function. I think that has proved true. There grew up, because of war-time scarcities and Government control, an environment of restrictive practices in most trades in the country and it was necessary to do something in order to get trade out of that environment and back on to a normal competitive basis. The enactment of the Restrictive Trade Practices Act and the functioning of the Fair Trade Commission have, I think, succeeded in doing that.

I think it is quite unfair to suggest that members of the Fair Trade Commission are not qualified to carry out a review of this kind. I would agree that most of them are probably not qualified to slice bacon, weigh sugar or blend tea or anything of that kind, but it is necessary for Senators to appreciate that this problem of restrictive trade practices is not something which has emerged only in this country. There has been a great deal of thought and discussion on the economic and social implications of restrictive trade practices in almost every country in the world and there are very few countries that have not now got legislation somewhat akin to our own for the purpose of creating machinery which will enable the effect of these restricted practices to be examined and measures taken to counteract them, where necessary.

International conferences have been held at which the experience and practice of member countries have been compared and I am perfectly aware that members of the Fair Trade Commission have not only made themselves familiar with all the discussions that have taken place but also with the legislation and experience in other countries. Indeed, I am quite certain there is not in the country a body of people better qualified to apply to the circumstances of an individual trade the theoretical considerations with which they are familiar and which are guiding the practice of Governments in all countries at the present time.

I think it is interesting to mention in this connection that British legislation allows an individual manufacturer to enforce the prices fixed by him on the retailer by means of a court injunction. The interesting thing—I think I referred to this in the Dáil by quoting an English journal—is that in relation to food prices, the goods we are concerned with this evening, the goods handled by grocers, the English manufacturers, although they had that power of enforcing resale price maintenance, have in fact failed to do so. Only one or two of them, I think, have ever attempted to do it.

But the significance of the apparently unanimous decision of the British manufacturers of foodstuffs not to avail of the power given them under existing law to enforce resale price maintenance should not be lost here. That is why I contend that the adoption of another course—the giving of legislative sanction to resale price maintenance in this country—would not merely be undesirable, having regard to our general approach to these problems but would probably be ineffective, having regard to the British experience.

Question put and agreed to.
Agreed to take remaining stages to-day.
Bill put through Committee, reported without amendment, received for final consideration, and passed.