Vol. 375 No. 5
asked the Minister for Industry and Commerce the proposals, if any, he has to investigate the wide discrepancies in the price of grocery items between here and Northern Ireland; and the measures he will take to eliminate unwarranted elements, including profiteering, in the price of such items in the Republic.
50.
asked the Minister for Industry and Commerce the action he proposes to take regarding the evidence of exorbitant profiteering for many goods and services which has been presented in reports from the Consumers Association of Ireland, the ESRI report on this subject, and a recent programme on RTE (details supplied); when he will act in this regard; and if there is a significant and unjustified differential between prices in the Republic of Ireland and prices in Northern Ireland and Great Britain.
84.
asked the Minister for Industry and Commerce the action, if any, he proposes to take regarding the recent report concerning the difference in prices in food and other consumer goods between the United Kingdom and Ireland.
I propose to take oral Question No. 28, priority Question No. 50 and written Question No. 84 together.
I asked the Restrictive Practices Commission in July last to carry out a study of the alleged difference in retail grocery prices between the Republic of Ireland and the United Kingdom (including particularly Northern Ireland), and to report their findings to me. I have received that report and I am arranging for its early publication.
The commission's report examines the position disclosed in the surveys referred to and finds that there are a number of factors which can account for different price levels North and South. These include different VAT rates, payment of MCAs, differing freight costs and distributors' margins, marketing practices for individual products, differing product promotion or profit mix. In addition, the retailers' overall gross margin expectations in particular cases may be entirely different. One retailer may have a policy of low margin and high volume, while another may concentrate on service, variety, quality of goods, hygiene and so on and expect to obtain a higher gross margin as a result. Furthermore, in comparing the two markets there can be differences in timing of price increases or reductions and exchange rate differences, including the necessity to buy currency forward, can all bring about differences in prices between one market and another.
Some of the comments which have been made in relation to this matter did not make satisfactory allowances for factors such as these in arriving at conclusions regarding price differences.
I expect to be able to publish the commission's report very shortly and this will allow for a further and more informed discussion on the questions which have been raised.
A recent television programme on grocery prices referred to specific items and I have asked the Examiner of Restrictive Practices to investigate the detailed terms and conditions under which these specific goods were purchased and imported so that I can consider what further action might be necessary in relation to them. I am awaiting the examiner's report.
With regard to the examination by the commission, will the Minister say whether any items were removed from the list which was originally subject to their consideration? Was there any interference with the list or diminution of the range of products? The publication of the report is interesting but will not do anything about the problem. What action will the Minister take in this regard and when? Is there an indication in the report that there is a problem in this area because many of us feel that there is? The place is cluttered with reports, all saying the same thing and no one knows what will happen.
Some places may be cluttered with reports but my office is not one of them. Action is taken on the basis of the recommendation of each report and I assure the Deputy that it will be taken also in this regard. The report is with the publishers at present and the minute it comes back to me it will be circulated. I cannot grasp too clearly what the Deputy is getting at. Is he insinuating that I removed any items from the list for investigation? If anyone else did I am not aware of it and if he gives me further information I will follow it up. In the television programme a small cash and carry in the north east of County Donegal was compared with a major cash and carry in Belfast. That is not really comparing like with like. Notwithstanding that fact, there were items which were being grossly overcharged in the Republic. Already action has been taken and specific items have been reduced in price. One item selling at a unit cost of £9.68 was reduced to £5 odd. That is the sort of action we are looking for and the sort of action we will continue to get. In relation to other specific items that appear to have a gross margin installed, I have power under the Groceries Act to ask for a report within 14 days. Those reports are now in the examiner's office and whatever action is needed to be taken will be taken. The prices of some of the items have already been reduced because of action following the report.
I will continue to take action when necessary but I must emphasise that one must compare like with like. The examiner's survey is more widely representative than some of the other surveys because it surveyed approximately 100 items whereas some of the other surveys picked out specific items. If one does a survey of a major multiple store, say in Dundalk, as against the same store owned by the same company in Newry, one will find that the differential is approximately 3½ per cent. When one takes the additional input costs here, for energy and so on, that margin or an even higher margin could be justified. We must be representative in relation to these examinations. I cannot make ad hoc decisions based on allegations.
I will allow Deputy Keating a brief question. I am going on to other business.
Have prosecutions or other actions been put in train as a result of the abuses the Minister detected where prices have now come down? Just to get someone to reduce the price to its proper level is less than adequate. How are the consumers to be protected and how will these people be treated under the law in relation to the exorbitant profiteering in which they indulged?
I am sure the Deputy will recall that the party to which he formerly belonged lost all price control while they were in Government in 1986——
That is presumably why you are there.
——so the justification for me bringing in maximum price orders on certain items and for carrying out my duties——
Are there any prosecutions?
In relation to those items?
Yes.
Under what Act?
Under whatever Acts are open to you.
Why did your Government remove price control? It could have been very easy to deal with it.
That disposes of all the questions for today.
