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Seanad Éireann debate -
Wednesday, 2 Jul 1980

Vol. 94 No. 13

Trading Stamps Bill, 1979: Report and Final Stages.

I move amendment No. 1:

In page 6, lines 1 and 6, after "contract" to insert "or lease".

The amendment I propose is a very simple one in line with the point I made last week when we were dealing with Committee Stage of the Bill. The Minister expressed concern that some petrol retailers were being obliged, because of conditions and contracts they had with wholesalers or suppliers, to use trading stamps in promoting their sales. He rightly considered this was a practice that was unacceptable and he wished to put a stop to it. Consequently, he proposed that certain provisions in contracts obliging retailers to promote their business by use of trading stamps would be void. I felt that many of these obligations were imposed by way of conditions in leases rather than in contracts. My amendment proposes to extend the void condition to include conditions like that not only in contracts but in leases.

Having considered the amendment I must say I am not in general agreement with it, although I accept the point made by the Senator. When we discussed this on Committee Stage I maintained that the meaning of the word "contract" would include lease but I undertook to have the matter looked at again between then and Report Stage. The Senator raised a very valid point; I thought it proper not to rush the Bill through that day and considered we should give it another week.

The Department's legal advisers have been consulted again and their advice is that there is no possibility of confusion here. I have been advised positively that a lease is a form of contract. Therefore, while I appreciate the concern expressed by the Senator on Committee Stage, lest there be any difficulty with the interpretation of the section I can confirm that the fears are groundless. I am not prepared to accept the amendment.

I will have to accept that the Minister's legal advisers know their law and that they are correct, but I have some reservations about it. However, in view of what he said I will withdraw the amendment, but I think that it would have made the legislation a little clearer.

Amendment, by leave, withdrawn.
Bill received for final consideration.
Agreed to take remaining Stage today.
Question proposed: "That the Bill do now pass."

I should like to come back to a point made by Senator Molony on Second Stage regarding the actual operation of trading stamps schemes. While I realise the Senator would like to know more on the subject, I should explain that while certain factors are common to all schemes each one operating here has its own special features. I should also point out that the Bill merely lays down a general statutory framework in which trading stamp schemes may operate. It does not set out to regulate their financial affairs.

In general terms, however, there are three schemes of which we are aware operating in Ireland at present which would fall within the scope of the Bill. Broadly speaking, the profit to the promoter of a trading stamps scheme arises out of the difference between the cost of the stamps to the retailer and the cost in turn to the promoter of redeeming those stamps, plus printing and promotional outlays on the stamps themselves. There is, of course, also a hidden profit on the stamps that may not be redeemed at all by customers.

Regarding the benefit to the retailer, his profit would essentially materialise from the difference between the increased turnover generated by the use of stamps as a promotional device and the cost of the stamps to him. I should add that the Department have seen no evidence to suggest that trading stamps have been other than a profitable promotional device for retailers.

Finally, from the consumers' point of view, trading stamps could be said to amount to a discount on purchases of various products in selective retail outlets. Although it could be argued that this discount is theoretical in so far as prices in general in franchised outlets might be higher than those elsewhere, the findings of the Department and other independent consultants would not appear to bear out this argument. It can be seen, therefore, that trading stamps will appear to be acceptable to all interested concerns. Therefore, the course taken in this Bill—to regulate rather than prohibit trading stamps—is the right and entirely justifiable one.

Question put and agreed to.