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Dáil Éireann díospóireacht -
Thursday, 6 Nov 1997

Vol. 482 No. 5

Ceisteanna — Questions. Priority Questions. - Take-over by Guinness.

Nora Owen

Ceist:

1 Mrs. Owen asked the Tánaiste and Minister for Enterprise, Trade and Employment the reason a major merger between Guinness and United Beverages was not referred in time to the Competition Authority; the body who was responsible for this mistake; the action, if any, which has been taken in her Department as a result of this mistake; and if she will make a statement on the matter. [18369/97]

I informed the House on 30 September 1997 that, following discussions between myself, my officials and Guinness Ireland Group, they notified their proposed take-over of United Beverages Holdings to the Competition Authority on 4 September 1997 seeking clearance of the proposal under the Competition Acts. This means the proposal is now being examined by the Competition Authority, and I understand the Authority yesterday issued a detailed statement of objections which is currently being considered by the parties.

This alternative course of action became necessary as the original referral by me on 8 August, 1997, was made out of time. This occurred because it had been understood in my Department that the deadline of 3 August could be extended by making a further request for information from the parties. However, this was queried by the Competition Authority and the Attorney General advised that the original deadline of 3 August was unaffected by the request.

As Minister, I take full responsibility for the errors that occurred. However, in the circumstances of this case I am satisfied that the course of action taken by Guinness will have the same effect as the original course I had intended to take.

Does the Minister recollect her own words in a Dáil debate during the famous Judge Dominick Lynch saga when she said that accountability means that a Minister must take charge and exert authority over his or her Department and must avoid doing certain things that are wrong and do other things that are required of them? She went on to tell us that it is not good enough for a Minister not to know. A Minister cannot abdicate his or her duty to this House and the public by simply not knowing. Does the Minister recall calling for my resignation and giving me an appalling time in this House because I was not aware of a particular situation in the Department of Justice? Can she tell the House why she did not practice what she preached and offer her resignation over such a blunder? Does she accept now that she should have had a full investigation into this blunder, seeing that on 23 July, according to The Sunday Tribune on 17 August, an official reminded her officials and thereby herself that the date for the submission to the Competition Authority was 3 August. She missed that date. Does she agree that the referral to the Competition Authority now does not carry the same authority as referring it to the Competition Authority under the Mergers Act and that the Minister has no role, irrespective of what the Competition Authority now says about this merger?

I fully accept that responsibility for this matter lies with the Minister.

The Minister did not accept my assertions when she was in Opposition.

Was the Minister on holidays?

I would remind Members that only the Member in whose name the Priority Question appears may ask supplementary questions.

I was not on holidays when this matter was referred by me.

Why did the Minister make a mistake?

If the Deputy would like information, I will give it to her. If she just wants to interrupt me I will not be able to give her the information. I fully accept responsibility. I have carried out an investigation. I am quite certain nothing of this kind will happen again. I further state that these Acts are in place since 1978. On a number of occasions a second request for information was made. That second request was always made within the month of notification and the officers in my Department and others were of the view that it was perfectly in order to make a second request and that it would not cause a procedural problem. They were not aware that there was a procedural difficulty, nor had they any experience of it, until it was drawn to their attention by the parties when they responded on 7 August. This is why it occurred. It was a failure to interpret appropriately the legislation. A second request had been made on a number of occasions previously but always within a month.

The official who advised that a decision had to be made by 3 August was correct. The decision was made by me before 3 August. Based on advice, I decided to request further information to give us more time to carry out the investigation. I followed the advice given by the officials that a decision had to be made by 3 August, and I made a decision by then. My officials were under the impression that making a request for further information was in order. Obviously, that was not the case.

The Minister is saying a mistake was made but she is not guilty because she took advice. The Minister pilloried me in the House a number of months ago but she has not followed her words then, "to exert authority over his or her Department".

The merger has been referred voluntarily to the Competition Authority by the companies involved. The report is now available but there is no role for the Minister. If the case had been referred under the Mergers Act, 1978, the Minister could have said nothing if the merger was acceptable or made an order not to allow it proceed. However, this cannot be done now because the matter was referred under the Competition Act. The companies could enter the merger despite a negative report from the Competition Authority. Will the Minister confirm that is the case?

The outcome can be the same. If the referral had not been made voluntarily, I could have used other powers to carry out an investigation. The Deputy is aware of that and I would have exercised those powers. The Guinness Ireland Group made the referral, albeit voluntarily, after lengthy discussions with me and my officials. The Competition Authority is dealing urgently with this matter at my request.

The Deputy suggested the merger can go ahead. However, if the companies proceed, they will do so at their peril because the Competition Authority can take them to court to stop it. The authority raised objections yesterday about the merger because it believes it could lead to anti-competitive practices. Therefore, the companies would proceed at their peril and I doubt that will happen because the Competition Authority has powers.

Will the Minister confirm the view among lawyers dealing with competition legislation that a referral under section 4 of the Competition Act does not have the same effect as a referral under the Mergers Act and there is an anomaly in the law? The Minister's point is not totally accurate because when this merger was referred voluntarily to the Competition Authority, she cannot make an order to stop it proceeding if she is inclined to do so. I accept the matter is being dealt with by the same authority that would have considered it if it had been referred under the Mergers Act. However, because it was not referred under that Act, the Minister does not have the power to make an order to stop the merger. Will she confirm that is the case? Will the legislation be amended to remove this anomaly?

The application was made on a voluntary basis with a view to getting certification.

Under which Act?

The Competition Act.

Not the Mergers Act.

I do not doubt the outcome will be the same. If it had not been referred on a voluntary basis, I had other powers which I would have exercised. It is better that it was done voluntarily.

These matters must be kept under constant review to ensure there is competition in the economy. We must ensure there are no anti-competitive practices. I assure the Deputy that if there are deficiencies in the law, I will not hesitate to remedy them.

So the Minister is not resigning?

Neither am I going for witch hunts and calling my officials all the letters of the alphabet.

The Minister should reread her contribution to the debate on the Judge Dominic Lynch affair. With hindsight she might be apologetic to me now.

I will resign if I have the litany of cock ups the Deputy had when she was in office.

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