Seanad Éireann debate -
Thursday, 30 Jan 1997

Vol. 149 No. 19

Adjournment Matters. - Misleading Labelling of Products.

Dr. Henry

On the day when there is a debate about the price of the pint, I want to talk about another aspect of Guinness. Since childhood, I, like many others, have marvelled at the number of Irish souvenirs, even leprechauns, which have "Déanta sa tSeapáin", or "Taiwan" written on them. Many products relied for their sale on their Irish connection, yet they were produced outside Ireland.

This Christmas in the Aer Rianta shop at Dublin Airport — they are also available in other shops—I came across the most misleading products I have ever seen called Guinness clothing. While several pieces of knitwear were made in Ireland and so labelled and the wax jackets on sale appeared to have been made in England, I could not find the labels of origin on the other high quality items for sale. Yet the descriptions on the labels gave the impression of a close association between the garments and Ireland. For example, the following was printed on the outside of the swing tag on the clothes: "Clothing inspired by the richness of Irish country life" and "Guinness is a guarantee of Excellence, Guinness since 1759". On the inside of the same swing tag it said:

In 1759 Arthur Guinness began brewing at St. James's Gate in Dublin. He stood firm in his belief to offer only the very best and more than 200 years later the name Guinness stands for Excellence and individuality all over the world.

Guinness clothing is a casual wear range created from natural fibres and is inspired by the great traditions of Guinness and Irish Country Life.

The following types of names were used to describe the garments: Lansdowne, Ravenhill, Curragh, Moren, Mayo, Galway, Trinity, Dingle, Bantry, Harp & Barrow, Wexford Wax, Fastnet Wax, Atlantic, Liffey Leather Belt and Dunloe Leather Belt. These are closely connected with Ireland.

These are not cheap garments. The Lansdowne rugby shirt retails at approximately £42 to £45, including VAT, but it is sold to the retailer for approximately £20. At these prices there is no reason Irish manufacturers could not manufacture the garment. Fruit of the Loom in Donegal, which had to lay off many people recently, makes similar garments for the world market. The Curragh sports shirt retails at approximately £32 to £34 and this is bought by retailers for approximately £15.50. This could also be made here at a profit.

The slogan, "Guinness is good for you", could be changed to "Ireland has been good for Guinness". Arthur Guinness put great store in helping the Irish economy and I remember the fuss there was when the head office was transferred from Dublin to London. However, are those now in charge of the firm trying to help the old tradition of the firm?

We constantly hear about the problems of the Irish textile trade. Employment has fallen from 12,000 in December 1990 to 9,300 in June 1996, which represents a 22 per cent loss in less than six years. How wise is it for a profitable firm such as Guinness to trade in this way? All trade is international and the shops at airports are international. However, many visitors as well as many Irish people want to buy Irish products made by Irish people. Perhaps the Minister could tell me if it is possible to introduce regulations so that people can ascertain if what appears to be an Irish product is one.

Minister for Tourism and Trade (Mr. E. Kenny)

I thank Senator Henry for raising this important matter. Unfortunately, I did not have all the details about this matter before I came here so my reply is probably too general to deal with the specifics raised.

I opened Leixlip Country House Hotel yesterday evening which was built 225 years ago as the home of Captain William Brady. I understand it was to be the first site for the Guinness Brewery before it moved to James's Gate. In the last fortnight I also attended the craft show, which featured an incredible range of Irish manufactured garments of the highest quality. I agree with the Senator that many of the garments she mentioned could have been manufactured by exhibitors at the show.

Responsibility for consumer protection rests with the Minister for Enterprise and Employment, whose remit extends to labelling requirements which could include country of manufacture. Under the Consumer Information Act, 1978, he has the authority to intervene where false or misleading information about goods and services has been provided in the course of a business, trade or profession. A useful guide to this Act is available from the Office of the Director of Consumer Affairs.

I do not have direct responsibility in this area and it is not in my remit to introduce regulations. However, in relation to trade regulation, my Department has responsibility for implementing the terms of Council Regulations 2913/92 on the rules of origin of goods. These are laws, regulations and administrative practices used to identify the country of origin of internationally traded goods. The need to identify the origin of a good arises from the fact that national and international commercial policy instruments will often accord different types of treatments to goods based on their county of origin. For example, preferential trade agreements will often grant duty free access to products which originate in any of the countries which are party to the agreement.

There are two types of origin rules — preferential and non-preferential. Preferential rules form an integral part of any preferential trade agreement signed by the EU and Ireland is party to all the Union's trade agreements. Preferential rules of origin contained in these agreements are published in the Official Journals of the EU. Non-preferential rules are employed in the implementation of commercial policy instruments such as anti-dumping measures and quantitative import restrictions. They are also used in compiling trade statistics and in the application of origin marking requirements. The non-preferential rules of origin which apply in the EU are contained in Articles 22 to 26, inclusive, of the regulation. These articles cover basic origin concepts such as "wholly obtained" and the last substantial working or processing which confers origin. In addition, there is a list of origin rules for specific products such as textiles, televisions and car radios. As a result of the GATT Uruguay round, discussions are currently under way on the harmonisation of all non-preferential rules applying to goods traded by members of the World Trade Organisation.

The regulation provides for the issuing of certificates of origin prepared by a reliable authority or agency duly authorised for that purpose by the country of issue. In Ireland, as in most member states, these authorities are the chambers of commerce. In assessing the suitability of a chamber for authorisation to issue such certificates, chambers must comply with the following requirements: first, affiliation to the Chambers of Commerce of Ireland, the umbrella body representing all the regional chambers; second, a proven need by exporters for the service in that area; third, the ability to provide an efficient service and fourth, a good understanding of the rules of origin.

Evidence of non-preferential origin in the form of a European Community Certificate of Origin is only required in a limited number of circumstances and need only be provided when requested by the importing country. As Minister with responsibility for the internal market, it is important to remember that EU law relating to barriers to trade prohibits manufacturers having to affix labels showing the country of origin of their products, even if the goods come from outside the EU. Once goods have been imported into the Union and the necessary customs procedures have been complied with, the goods may then circulate freely. Member states cannot take action to prevent such goods being imported into or exported from their territory.

I remind the House of our performance as a trading nation in recent years, which provides a remarkable success story. Exports constitute an increasing share of the economy's total output of goods and services. They have increased from 60 per cent of GDP in 1985 to 77 per cent in 1995 and it is estimated that last year that share rose further to over 80 per cent. As the growth in our GDP becomes increasingly related to our export performance, so do our prospects for expanding employment and improving our living standards. A recent study carried out by An Bord Tráchtála estimates that one in four jobs is now directly dependent on exports. When indirect influences are taken into account, such as inputs from services, etc., to manufacturing, the ratio is as high as one job in two.

It is, therefore, fair to say that imports represent the opposite side of the exporting coin and, as I have already stated, our export performance results in far more goods and services produced in Ireland being consumed overseas than we import. It is clear that exports based on open access to markets and the resultant free movement of goods and services play a pivotal role in our economic well being.

My reply has been general but I now have the details of the matter raised by the Senator. The Department of Tourism and Trade has a close relationship with Guinness, which sponsors about 2,500 festivals and other community activities throughout the country. Only last week it was heavily associated with the Celtic Flame festival, which I launched in the Guinness Hopstore. I will bring the issues raised by Senator Henry to the attention of those in charge of Guinness and I will communicate their response to her.

The Seanad adjourned at 4.55 p.m. until 2.30 p.m. on Wednesday, 5 February 1997.