Seanad Éireann debate -
Thursday, 15 Jun 1978

Vol. 89 No. 9

Restrictive Practices (Confirmation of Order) (No. 2) Bill, 1978: Second and Subsequent Stages.

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

Minister of State at the Department of Industry, Commerce and Energy (Mrs. Geoghegan-Quinn)

The object of this Bill is to confirm the Restrictive Practices (Motor Spirit) Order, 1978 made last week by the Minister for Industry, Commerce and Energy under the Restrictive Practices Act, 1972.

This order extends for another year a statutory ban on the operation of company-owned motor spirit stations by oil companies. The order was due to expire shortly.

I have extended the order to allow the Restrictive Practices Commission time to carry out a general review of the various orders made regulating the supply and distribution of motor spirit and motor vehicle lubricating oil and also to allow them to look into certain related issues.

The first inquiry into the trade under the fair trading legislation was in 1960. It was principally concerned with examining the merits of the "solus" system—the system under which a retailer undertakes to handle one brand of motor spirit exclusively. It found that the system had certain merits but needed to be regulated because of its tendency to encourage an excessive number of petrol retail outlets. An order to regulate the system was made by the Minister in 1961 and shortly afterwards the Fair Trade Commission and the petrol companies reached agreement on certain guiding principles designed to limit the increase in outlets.

There was concern throughout the sixties that the guiding principles were not having their intended effect of limiting the number of outlets and that the regulation of the solus system was leading companies to increase the number of directly operated outlets. At the Minister's request, the commission held an inquiry into his growth in outlets in 1970.

In their report, the Restrictive Practices Commission argued that the extension of control by the oil companies over the retail market by means of company-operated stations needed to be curbed in the public interest as they felt that this development would lead to dominance by the oil companies over the retail trade and increase the risk of such restrictive practices as price fixing and market-sharing. An order to halt this development for a three-year trial period was made in 1972. It was reviewed in 1975 by the Commission and on their recommendation extended for another three years until the summer of 1978.

Following their 1975 review, the commission had suggested that when they next review the ban they should also review the orders as a whole. During that review they also received representations on matters relevant to the orders which their terms of reference did not allow them to consider. I have decided that they should be free to consider other matters germane to the orders. I have also decided that they should look into a matter which has been the source of grievance to some people in the trade for a number of years. I am referring to the agreements under which persons who are not the company's employees operate their stations under licence.

In accordance with the Restrictive Practices Act, 1972 I have asked the examiner to transmit my request to the commission to hold an inquiry under the terms of reference that I have mentioned. The extension of the order will give the commission the time needed to do this.

The Restrictive Practices Act, 1972 provides that orders of this kind shall not have effect unless they are confirmed by an 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 order. The order, however, may not be amended but must be accepted or rejected as it stands.

This is a non-controversial measure and I have no hesitation in recommending it to the House.

Mr. Cooney

The Bill is quite acceptable to this party and we will not ask for its rejection. We understand the reasons for it and the reasons for its continuance. Perhaps the Minister would deal with two matters arising out of the speech. I gather from what she says that the terms of reference of the Commission are being extended to enable them consider other matters germane to the Orders. I would be glad if the Minister could give some indication in detail as to what these other matters germane might be, and as to the new terms of reference, because in page 1 the Minister says that she has extended the order to allow the Commission time to carry out a general review of the various Orders made in regard to the distribution of motor spirit and lubricating oil. I would be glad of an indication as to what points the Commission will be asked to look at under the terms of their wider brief.

Mrs. Geoghegan-Quinn

I thank Senator Cooney for his remarks. In the report which was published by the Restrictive Practices Commission following their last special review of the operation of the Order, they stated under the heading "Conclusions and Recommendations" at paragraph 25, page 9, that there were certain matters which they felt had a tremendous bearing on the operation of the Orders and which they felt they did not have at the time the operation of the Orders and which they felt they did not have at the time have the power to investigate, and they suggested that when next this investigation took place or an inquiry was taking place their powers should be examined. The Special Review of the Restrictive Practices Commission states that

in the course of the hearing various witnesses raised a number of matters which they considered to have an indirect bearing on the operation of the Order. These included the effect of increasing costs, petrol outlets in the new suburbs or satellite towns, the effect of various types of agreements and the significance of promotional schemes and hours of trading, the limitation in our terms of reference prevented us from exploring these matters in detail but we recognise their bearing on the operation of the Order.

In this case their brief has been extended so that they can include all of these matters in their inquiry. The Department and I received a very large number of representations from the petrol retailers' association and from many individuals who operate these company owned stations, who are genuinely worried about the whole matter. It is important and desirable, as the Senator said, to hold the enquiry at this time. To give them the opportunity of holding the inquiry and giving us their findings it is important that we extend the Order for a further year.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill put through Committee, reported without amendment, received for final consideration and passed.

Business suspended at 10.40 a.m. and resumed at 12.15 p.m.