The decision by Aer Rianta to grant a licence to First Rate Bureau de Change, which is a wholly-owned subsidiary of Bank of Ireland, to issue tourist VAT refunds via bank outlets at airports effectively assists them to create a dominant position in the marketplace, to the detriment of the tourist industry and employment in areas such as Killorglin, County Kerry, and Spiddal, County Galway. It is unacceptable that a semi-State body should assist a large competitor in the marketplace of financial services to create such a monopoly.
Is the Minister aware of recent developments in the provision of financial services at Irish airports whereby Aer Rianta have in fact now granted a licence to First Rate Bureau de Change to issue these VAT refunds? The Bank of Ireland are a totally new entrant into this market, which is already being well serviced by two small established Irish companies. The Minister will be aware that Aer Rianta allege that the decision to introduce an additional supplier of this service has been taken in the interests of creating competition. Would the Minister agree that this reason rings hollow in the light of Aer Rianta's long-standing and on-going policy to grant the Bank of Ireland a total monopoly in the supply of financial services at Irish airports? It is an extraordinary situation and it is an extraordinary reason for Aer Rianta to give when they clearly operate against the same spirit of competition themselves in relation to the supply of banking services.
The Bank of Ireland are currently canvassing the retail customers of the existing suppliers of this service. From information contained in their sales literature they intend to gain a substantial share of this mature market, which has little prospect of any further growth, through a system of kick-back payments to retailers, funded directly from the tourists' pocket as a result — let me say this very bluntly — of predatory pricing. To prove this latter point I would ask the Minister to bear with me while I quote directly from the sales literature of this Bank of Ireland wholly-owned subsidiary: "A retailer with 5,000 vouchers receives a payment of £3,075"— it says in ringing tones. It concludes: "What it all adds up to is an absolutely first rate opportunity for you to make more money from tax free shopping in your retail outlet."
Surely the purpose of the VAT refund scheme was to benefit tourists and not to create profits for Aer Rianta and the Bank of Ireland. It goes against the entire spirit of the scheme and it is particularly sad that a semi-State company should be involved in such activities and sadder perhaps still that it should have the complicity of one of the largest commercial banks, to the detriment of smaller companies already involved in this service. Is it not difficult to create employment then?
I ask the Minister to visit the processing centre of one of the companies currently processing VAT refunds located in Spiddal, County Galway, in Minister Geoghegan-Quinn's constituency. I would prevail on her, and the Minister of State, to do so as quickly as possible because if the Bank of Ireland and Aer Rianta are permitted to exploit their monopoly position, then a large number, if not all, of the jobs of the 20-plus people employed there will disappear before this summer is over. Similar jobs in Killorglin, County Kerry, in my constituency, will also be put in jeopardy.
Some years ago the Bank of Ireland awarded a prize for business idea of the year to that same company in Spiddal for their innovative proposals in the VAT refund area. As bankers they assisted and supported the company in the development of its scheme. When I say as bankers, I mean as bankers to the company and thereby they were privy to much confidential information. Yet this is the same company that the bank have now targeted for annihilation by their proposed link-up with Aer Rianta.
I ask the Minister, and the Minister of State, to take action now to ensure that Aer Rianta, as a State body under the Minister's control, do not lend their suppose port to this most undesirable development in the country's vital tourist business. Monopolies in dominant positions represent the greatest disincentive to competition and the most serious obstacle to employment creation. It is against the spirit of the Treaty of Rome and must be addressed now if smaller companies are not to be swallowed up by large corporations in monopoly positions which are to the detriment of everybody in society, not least the weaker sections.
