asked the Minister for Industry, Commerce and Energy if there is an excess capacity in our baking industry and if an estimate has been made of the viability of this industry in its present structure.
15.
Ceisteanna—Questions. Oral Answers. - Baking Industry.
14.
andMr. O'Toole asked the Minister for Industry, Commerce and Energy if the Irish baking industry would be vulnerable to competition from Northern Ireland bakeries in the event of the complete removal of bread subsidies.
With the permission of the Ceann Comhairle, I propose to take Questions Nos. 14 and 15 together.
I accept that there is excess capacity in the Irish bread baking industry. My Department and the Industrial Development Authority are actively encouraging the industry to speed up rationalisation with a view to ensuring the viability of the industry through a reduction in excess capacity and an improvement in competitiveness and efficiency.
As long as present conditions continue the industry will be vulnerable to competition from abroad. So far as the subsidies are concerned, I think it is necessary to bear in mind that these were introduced to benefit the consumers and not to protect the industry in question.
Approximately what number of jobs would be lost in the rationalisation the Minister mentions needs to take place? Will any plant need to close? Further, is it not a fact that, if the bread subsidy is completely withdrawn, southern Irish bread will be at a very serious disadvantage in the market place because the bakery industry in Northern Ireland has been rationalised while, unfortunately, ours has not been?
The subsidy has, if you like, inadvertently acted as an aid to the industry in the Republic, although it was not introduced as such. As the Deputy is no doubt aware we cannot continue this situation indefinitely. We have to make changes in regard to the application of subsidy to community bread generally. So far as the number of jobs that would be lost is concerned, it would be unwise of me to hazard any guess because it would depend on what form the rationalisation would take and over what period it would take place. However, over a period of years job reduction in the industry perhaps might be as much as 20 or 25 per cent.
Is it the Government's intention to remove the bread subsidies progressively? If so, has any estimate been made of the number of job losses that will almost certainly flow from such a course being followed?
The question of bread subsidies or their removal is a budgetary matter which should be addressed to the Minister for Finance.
In the light of the persistent claims that there is over-capacity in the industry, how can the Minister justify the giving of large grants to the industry for capital and re-equipment purposes?
One of the great complaints is that the IDA will not pay grants.
They have paid grants.
In certain cases where there would be worthwhile rationalisation, they have done so in recent times. Unless there is obvious, worthwhile rationalisation and it is obvious that the bakery in question is likely to be saved as a long term viable proposition, the IDA are not keen on paying grants.
I might refer the Minister to the last IDA report.