Vol. 398 No. 10
21 Mr. Boylan asked the Minister for Industry and Commerce if he has received any report from the Director of Consumer Affairs in relation to the investigation requested on 1 November 1989 as to whether the ESB are in a monopoly position for the sale of electrical appliances by virtue of their system of billing to promote such sales; and if he will make a statement on the matter.
25 Mr. R. Bruton asked the Minister for Industry and Commerce whether he has received an interim or a final report from the Director of Consumer Affairs on his investigation of the involvement of the ESB in the sale of brown goods.
36 Mr. McGahon asked the Minister for Industry and Commerce if he has received the report of the Director of Consumer Affairs concerning the question of whether the ESB have an unfair advantage in the area of electrical retail sales because of the use of their billing system to promote such sales; when he proposes to publish it; and the action, if any, he proposes to take on its recommendations.
37 Mr. D'Arcy asked the Minister for Industry and Commerce if any report has been received from the Director of Consumer Affairs in relation to the investigation requested on 1 November 1989 as to whether the ESB are in a monopoly position for sale of electrical appliances by virtue of their system of billing to promote such sales; and if he will make a statement on the matter.
54 Mr. J. Bruton asked the Minister for Industry and Commerce when the report he has requested from the Director of Consumer Affairs to investigate whether the ESB is in a monopoly position and has an unfair advantage over family businesses, in relation to their use of billing systems to promote sales in ESB shops, will be published.
117 Mr. M. Kitt asked the Minister for Industry and Commerce the present position regarding the investigation by the Director of Consumer Affairs on the use of the billing system by the ESB to promote sales in their shops.
118 Mr. Quinn asked the Minister for Industry and Commerce when he will publish a report which he requested the Director of Consumer Affairs to undertake to assess whether the ESB were abusing their position in the electrical appliance market relative to the role and position of other privately owned and family run electrical appliance businesses; and if he will make a statement on the matter.
119 Mr. Cowen asked the Minister for Industry and Commerce when the report of the Director of Consumer Affairs regarding the adverse competitive effect of the use of the ESB billing system on private operators in the electrical goods business will be published; if a deadline was fixed for the release of this report; and if he will make a statement on the matter.
120 Mr. Barry asked the Minister for Industry and Commerce the reason his request to the Director of Consumer Affairs to investigate whether the ESB had an unfair advantage over family businesses is two months overdue; and the action he proposes to take in this regard.
121 Mr. Nealon asked the Minister for Industry and Commerce when the Director of Consumer Affairs will report on his investigation into whether the ESB, in a monopoly position, have an unfair advantage in competition with other businesses through the use of their billing system to promote sales in ESB shops; and if he will make a statement on the matter.
122 Dr. Lee asked the Minister for Industry and Commerce when the report requested by him from the Director of Consumer Affairs will be issued to investigate whether the ESB are in a monopoly position and have an unfair advantage over family electrical retail businesses in relation to the use of the billing system, to promote sales in the ESB shops.
I propose to take oral Questions Nos. 21, 25, 36, 37 and 54, and written Questions Nos. 117, 118, 119, 120, 121 and 122 together.
As I indicated in this House on 1 November 1989, it is lawful for the ESB to engage in electrical appliance retailing under the provisions of the Electricity (Supply) Act, 1927. I also indicated that I had been informed that the ESB operate their appliance retailing business in a normal commercial manner. There was one area that raised concerns, namely, the ESB's use of their billing system in this regard and whether this conferred an unfair advantage to the detriment of other electrical appliance retailers. I, accordingly, decided to ask the Director of Consumer Affairs and Fair Trade to examine this aspect in the context of the Restrictive Practices Acts, 1972 and 1987.
I received the report of the Director of Consumer Affairs and Fair Trade on 8 May 1990. In the course of his investigations, the director examined in detail the appliance selling activities of the ESB and the use of the billing system in relation to those activities, considered observations from all relevant sources, and considered established principles of competition law and policy. In the event, the investigation proved to be quite complex and the director cites this as the reason for the longer than anticipated period to complete his report.
The director has concluded that the ESB are not operating unfairly to the detriment of their competitors in using their billing system as a means of collecting repayments on credit purchases of retail goods. The director found no reason in principle from a competition policy point of view that the ESB should not be allowed to use the billing system outside the area of their statutory monopoly, or that all parties in the marketplace should be of the same size, should start from the same point or should have an equality of resources or assets. The director found no principle of competition policy to support the proposal that the ESB's billing system should be made available to other retailers and not confined exclusively to the ESB, or that the ESB should not be allowed to sell brown goods. The director confirmed that in his view the ESB do not subsidise their appliance sales and that these sales make a fair contribution to the cost of the billing system and other services or facilities provided by the ESB as a whole.
The director identifies some aspects of the ESB's practice in relation to their appliance selling activities which concerned him and he has made the following recommendations in this regard: (i) the ESB should take steps to allow customers to distinguish more readily between debts due for electricity supplies and debts due in respect of the sale of appliances; (ii) the ESB should amend their system for checking the creditworthiness of prospective purchasers of appliances on credit, so as to make it easier to identify those whose electricity bills are paid by welfare organisations; and (iii) periodic monitoring of the appliance selling activities of the ESB should be carried out in order to ensure that these activities continue to be profitable and that there is no abuse of any dominant position that the ESB might attain.
I am considering the measure needed to give effect to the director's recommendations. As the report does not appear to contain any particularly sensitive commercial information I propose to lay it before the House within the next few days.
I want to thank the Minister for his very detailed and comprehensive reply. It would take a little more time than we have now to go into this matter in depth. The Director of Consumer Affairs and Fair Trade does not believe there is any advantage to the ESB but I do not accept that. I have received numerous complaints from people in the electrical retail business who feel that the ESB have an unfair advantage and I am sure the Minister would accept that. What measures will the Minister take to ensure a level playing field for people in the electrical retailing business?
I have given the Deputy the findings of the Director of Consumer Affairs and Fair Trade and in that light I am not certain there is a great deal more I can do about the matter. In so far as the very minor recommendations which have been made are concerned, that is a matter between the director and the ESB and no doubt the director will consider that aspect. When the report is published, interested parties will probably wish to study it and no doubt will then wish to comment on its contents.
Would the Minister not accept that the ESB have an unfair advantage over other people in the retail business as regards the sale of electrical goods in so far as they have a system of extracting monthly or bimonthly payments for these items?
My personal view is that that is the case but obviously that is not the view of the director and I do not know why. I am simply responding to the Deputy's question and giving my personal view.
