Deputy Seamus Kirk has been given permission to raise on the Adjournment the subject matter of a question submitted by him yesterday for Private Notice. He has eight minutes and the Minister has four. I ask Deputies who want to leave the House to leave now and leave quietly.
Adjournment Debate. - Dundalk Milk Products Limited.
I would like to thank you for giving me permission to raise on the Adjournment the question of the take-over of Dundalk Milk Products by Tír Laighean, the financial package involved and the long term implications for the plant and for the 70 strong workforce in Dundalk. Dundalk Milk Products have approximately 90 odd suppliers. In recent times the company have been taken over by the Tír Laighean co-operative group. The financial package of the takeover involved the raising of £800,000 by the deduction of 5p per gallon from each supplier over the next four years. The implications of this reduction for many of the suppliers to Dundalk Milk Products are very serious indeed. We are talking about a deduction being made when the agricultural industry was never in a worse state in the matter of cash flow and when farmer borrowing is at a level that simply does not allow suppliers to plants like Dundalk Milk Products to make the sacrifices they are being asked to make in this package.
A figure of £800,000 over four years means that £200,000 per year will be taken out of the milk cheques of suppliers, large, medium and small, in the general vicinity of Dundalk. The 70 employees are very worried about their position. Legitimately they are asking if DMP Limited will be turned into a mere depot and their services dispensed with, with the result that more wage packets will be taken out of circulation in the town.
Dundalk has been devastated in recent times. It is an economic wasteland. No later than today we got word of a further closure with a receiver moving into S. & S. It is in that context that I ask the house to consider the implications for DMP, their employees and farmers as a result of the takeover. We must bear in mind their ability to meet financial commitments entered into with a view to expanding their dairy herds. Those commitments will run for many years and many small or medium sized farmers are unable to meet them.
To complicate the matter further we have the spectre of other co-ops selling their subsidised milk in Dundlak. Various attractions have been offered to retail outlets to sell milk in the town. That is creating further problems for DMP. The position in regard to milk sales in the town is chaotic. I appeal to the Minister to examine the implications of the take-over and the unsatisfactory set up in regard to retail sale arrangements in the town. I appeal to him to have regard to the implications for the 70 people employed by DMP. It is appropriate that the Minister for Industry, Trade, Commerce and Tourism should be in the House to reply to the debate because we are referring to a town that has been devastated in recent years. I hope the Minister will be able to give some hope to the people of Dundalk.
I am not aware of any proposals on the part of the owners of Dundalk dairies to make any of their workers redundant which appears to be the concern expressed by Deputy Kirk. The position in regard to any deduction from the milk price is essentially an internal matter between the co-operative, who are owned by farmers, and their suppliers. I do not see that it is really a matter for the House and I do not quite understand what the Deputy wants me to do about it. I know that concern has been expresed by him about what he described as the subsidisation of milk sales in the area by milk co-ops from outside the area. Presumably, this refers to the intense competition that exists between co-ops for the business of the large supermarket outlets which still only represent a relatively small proportion of the total retail sales of milk. They are the most mobile sector as between the different suppliers and, therefore, have tended to attract a high degree of marginal pricing on the part of suppliers with a view to gaining the upper hand in the market. This is normal commercial practice and, certainly, there are problems associated with it.
If there is any suggestion that the trading is unfair or that individual supermarkets are taking oppressive advantage of their position vis-à-vis the co-operatives supplying them, there is of course the possibility that those who feel they are adversely affected can make a complaint to the Examiner of Restrictive Practices who will take action under the code under which his office is established. It is true that I approved the take-over of Premier Dairies, of which the Dundalk dairies is a part, by the Tír Laighean Co-operative. It was not a take-over that was in any way contrary to the criteria in the mergers Act under which I might have decided to refuse it. Indeed, the take-over by the co-operative representing suppliers of the means whereby their supplies are distributed seems to me to be a logical economic development giving greater integration and responsiveness right through to the market from the initial supply source.
It has been part of a problem in Irish agriculture that farm level supply is insufficiently integrated with and sensitive to the needs of the market place, at the supermarkets and the doorsteps of Ireland. Any financial or commercial arrangement that facilitates closer liaison between the farm and the consumer is not something that one could or should object to. I am not quite sure why the Deputy raised the matter here or what he expects me to say about it, but, perhaps, if he had put down a parliamentary question it might have been possible to elicit more clearly what he was on about than is possible in a debate of this kind where both of us may speak only once.
The Dáil adjourned at 9 p.m. until 10.30 a.m. on Thursday, 14 November 1985.