Restrictive Trade Practices (Confirmation of Orders) Bill, 1972: Second and Subsequent Stages.

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

This is a Bill to confirm an order which I have made under the Restrictive Trade Practices Act, 1953, on the recommendation of the Fair Trade Commission, relating to the supply and distribution of electrical appliances and equipment and also to confirm a related amending order.

The commission's recommendation followed a public inquiry initiated by them into complaints from distributors that they were experiencing difficulty in procuring supplies of electrical goods.

The commission's report of the inquiry shows that there are over 70 Irish manufacturers of electrical appliances and equipment. A high proportion of their output is sold on the home market, the requirements of which are also met to a substantial degree by imports. Irish manufacturers sell to wholesalers or direct to retailers and contractors, and imported appliances and equipment are distributed in the same way by manufacturers' representatives or agents.

Some manufacturers' representatives carry on a wholesale business; some wholesalers also have a retail business while many electrical contractors engage in the retailing of appliances and equipment. There are six associations representing the interests of manufacturers, manufacturers' representatives, wholesalers, retailers and contractors. Over 100 witnesses representing trade associations, manufacturers' representatives, wholesalers, retailers, contractors, the Electricity Supply Board and the Institute for Industrial Research and Standards were examined in the course of the inquiry.

The commission found that certain practices in the trade were not compatible with the public interest, and recommended that an order be made to prohibit them. These practices include coercion of a supplier by an association to withhold supplies or discriminate against any person; preparation or publication of lists of approved traders for the purpose of limiting entry to the trade or boycotting a supplier; resale price maintenance; collective fixing of prices by suppliers and withholding of goods by a supplier because of prices charged. The commission also recommended that the order should require a supplier to have written terms and conditions of sale and apply these terms and conditions to the acceptance of orders for goods.

I accepted the recommendations of the commission and I made the Restrictive Trade Practices (Electrical Appliances and Equipment) Order, 1971, to give effect to the recommendations and also to provide in the light of the report that a supplier's terms and conditions should be framed in an equitable way, should not be unduly onerous, and should be applied in a manner which would not involve unfair discrimination. Subsequently I found it necessary to make the Restrictive Trade Practices (Electrical Appliances and Equipment) (Amendment) Order, 1971, which provides for a minor drafting amendment of the original order.

Following the making of the original order and publication of the commissioner's report, representations were made to me by the Electrical Industries Federation of Ireland. While not objecting to the terms of the order, the federation maintained that the evidence cited in the report related to practices which no longer existed at the time of the inquiry.

While I accept that many of the practices concerned had been abandoned, I wish to point out that the commission have acknowledged this where appropriate in their report and it is also true that some individual firms continue to be influenced in their distribution arrangements by policies which have been abandoned by trade associations. Furthermore, the commission's report does not confine itself to practices of associations but also embraces the activities of individual suppliers. I am glad to have the federation's assurance that restrictive practices have been abandoned but I feel, nevertheless, that some safeguards are necessary to prevent restrictive practices which are outside the control of the federation or which might reappear at some time in the future. The orders to which this Bill relates provides these safeguards.

I hope that Senators will not infer from all this that the federation are restrictive in their outlook. This would be far from the truth and, in fact, they have put forward constructive proposals relating to safety standards and the training of personnel in the electrical trade which my Department is examining in consultation with the other Departments concerned. While on the subject of safety standards I would like to mention that since the publication of the report of the Fair Trade Commission the Electro-Technical Council of Ireland has been set up under the aegis of the Institute for Industrial Research and Standards. Its object is to bring about improvements in efficiency and safety. It includes representatives of the ESB, of Government Departments and of various branches of the trade.

The Restrictive Trade Practices Act, 1953, provides that orders of this kind shall not have effect unless they are confirmed by Act of the Oireachtas. The Bill now before the Seanad is the confirming Bill which is necessary to give the force of law to the orders concerned. With Bills of this kind, the orders which it is proposed to confirm may not be amended by the Oireachtas but must be accepted or rejected as they stand. The matters with which the orders deal have been the subject of a detailed public inquiry by the Fair Trade Commission, and their report sets out the arguments in favour of adopting the provisions embodied in the orders. The Bill has already been welcomed in the Dáil and I can recommend it to the Seanad without reservation. Its enactment will provide necessary safeguards against any future attempts at restricting normal competitive conditions in the electrical trade with consequent benefits to the trade and the public.

As the Minister stated, this Bill confirms the order made by him as far back as 26th April, 1971, following recommendations of the Fair Trade Commission after an inquiry taken on their own initiative into the supply and distribution of electrical appliances and equipment, as a result of complaints from distributors. This order was subsequently amended to provide for a minor drafting change.

I welcome the Bill. I regret its necessity, as I regret the necessity for the inquiry instigated by the Fair Trade Commission. In normal circumstances competition in a free enterprise situation should ensure reasonable prices to the purchaser of electrical goods and efficient after-sale services. Unfortunately, such was apparently not the case in the electrical goods industry at some period prior to the Fair Trade inquiry.

One of the inhibiting factors in the electrical goods trade may be possibly the complex distribution arrangements and the multiplicity of organisations, six in all, catering for 70 manufacturers, manufacturers' representatives, wholesalers and contractors. These arrangements may have had some bearing on the incidents of unsatisfactory practices in the trade.

I am glad that the Minister has agreed that the Electrical Industries Federation of Ireland have adopted a sensible and responsible attitude in regard to the Fair Trade Commission's inquiry. They have confirmed that some of the practices which were the cause of complaint prior to their investigation did not exist at the time of the investigation and that, in general, the manufacture and distribution of electrical goods is carried on by reputable organisations with reputable members. Of course, you will have the odd maverick where the individual refuses to conform to the ordinary rules of society.

Even though the practices complained of at the time of the inquiry have now ceased to his satisfaction, the Minister is quite right in coming to the House with this Bill to confirm the order made more than 12 months ago, if only to dissuade any other individual or company from indulging in unfair or restrictive practices. For that reason the House will pass the Bill.

I noted in the course of the debate in the Dáil that the Minister confirmed that until the Bill confirmed the order no action taken against the offending trader or traders could have the force of law. I should like to know if any action was taken and if it failed on these grounds during the past 12 months.

A valid point also made during the discussion in the Dáil is that some restriction on the distribution of electrical goods, particularly items such as refrigerators, washing machines, cleaners and so on, may be necessary to ensure that proper safety standards are maintained and efficient after-sales services are available. It is not unusual for manufacturers to insist that their products be distributed through premises which conform to certain conditions. These regulations are not laid down with the intention of interfering with or restricting the sale of such goods to the consumer but rather to ensure that they are distributed through a premises having the necessary facilities and equipment for their distribution. This factor should be taken into consideration.

It is desirable that reputable traders who are prepared to put capital into their organisation should be encouraged to do so. Where manufacturers require these conditions, in the interests of the public they should be encouraged to have these conditions implemented.

A Bill such as this, following the order made by the Minister, should certainly have the effect of dissuading traders or distributors in other trades from proceeding with restrictive practices. Where they are indulging in such practices, they should put their house in order to ensure that free enterprise means what it ought to mean, that is, free and fair competition where the efficient and enterprising trader progresses to his own and the community's benefit. I welcome the Bill.

There has not been any criticism of the Bill but Senator Russell asked one question in the course of his remarks. He wished to know if any action was taken arising from the original order against anybody and failed. My reply to that must be no because no one would be more conscious than me that the order is in no way legally binding until it receives the approval of the House. This is the purpose for which we are present here this evening.

Question put and agreed to.
Agreed to take the remaining Stages today.
Bill put through Committee, reported without amendment, received for final consideration and passed.