Vol. 504 No. 5
22 Mrs. Owen asked the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to the serious implications for suppliers of pharmaceutical products and goods due to the actions of a company (details supplied) which has delisted a number of Irish suppliers; and if she will make a statement on the matter. [12379/99]
The European Single Market gives the right to any firm within the European Union to establish retail outlets in other member states and to source freely their supplies from within the European Union. This is a right which many Irish firms are exploiting very successfully, both in terms of establishing businesses in other member states and in supplying the Single Market. Once the relevant provisions of competition law and Single Market rules are adhered to, it is open to all companies to source their products anywhere within the EU.
The company referred to is a private, commercial company over which my Department has no responsibility. However, in view of concerns expressed regarding the sourcing of products by the company, a meeting was arranged to discuss the matter against the background outlined above.
During the meeting, the company explained that it had delisted 25 suppliers, the majority of which were distributors but that the volume of goods purchased from Irish companies remained unchanged. The company stressed that it was committed to growing its business in Ireland and, with the opening of two new stores in the near future, would have 1,200 employees. The company indicated that it would work with Enterprise Ireland, in so far as is possible, to ensure Irish companies can compete for business. The company also stressed that £50 million of products are purchased by their company in the UK from Irish companies every year.
Is the Tánaiste aware that when Boots, the chemists, took over the Hayes, Cunningham and Robinson chain of chemist shops there were 80 suppliers of products to the HCR chain and that supplier list has been reduced to approximately 21 suppliers? Is she aware that a number of those suppliers were discontinued as suppliers of Boots by a peremptory five or six line letter telling them that, from a week after the date of the letter, they would no longer by supplying to Boots? Does the Tánaiste agree this kind of action by a company, despite all the rules on open and free markets, should not be tolerated here and would not be tolerated in any other EU member state? Will she take the initiative and meet the company again and ask it to ensure suppliers based in Ireland continue to be given the same rights to supply Boots as suppliers outside Ireland.
There were 60 suppliers when Boots took over. There are now 35.
There were 80. They told us at the committee.
I am giving the facts I have. Many of the suppliers who have been delisted are distributors. The Deputy is wrong in saying no other European country would allow this. We have no right to stop it. Just as Irish companies have succeeded in winning business from competitors in domestic economies abroad, other companies win business here. It is significant that the volume of business purchased in the Republic of Ireland by Boots has increased, albeit from fewer suppliers, which I accept. In the context of the Single Market, and even without it, it would be unsatisfactory if we were to discourage foreign investment in this jurisdiction on the basis that in order to invest one was compelled to use the products of Irish suppliers. That is not sustainable in a modern context, nor is it desirable. We have to continue to work, as Enterprise Ireland is seeking to do, to improve, at a competitive price, the products being supplied by Irish suppliers so that they can not only supply foreign companies that invest here but also the wider chain. Much work is under way in that regard. It has been extremely successful on the food side in the case of Tesco, and if we work across other sectors we can be equally successful. However, the Minister and the Government have no authority in this area, and it would not be desirable to seek to have it either.
Is the Tánaiste aware that some of the distributors, to which she refers as if they were of no consequence, employ 100 or more people, that in respect of products like Dove, Wilkinson Sword and so on which can be supplied from Ireland, the suppliers got no chance to tender to continue to supply, that there was an arbitrary cut-off date, and Boots are now bringing in all those supplies through their central buying and purchasing depot in the UK? Is she going to stand over the loss of Irish jobs when some of these companies might have to close down because they have lost the supply chain?
One thousand jobs a week are being generated in this economy. Eighty per cent of what we produce in this economy is sold abroad, in the UK and many other countries. If others abroad applied the kind of law the Deputy wants me to apply, it would be very bleak for Irish employment and Irish suppliers.
That does not help those who will lose their jobs.
Across the board in Europe, particularly since EMU, there has been huge rationalisation in the distribution industry. Right across the board companies are opting for central distribution and central purchasing. That, unfortunately, is the reality in which we live. I know that is putting enormous pressure on the distribution industry, particularly in a small country like ours. What we and Enterprise Ireland are seeking to do is to develop strategies with Irish companies to allow them to succeed in the new ever more competitive environment, and it is meeting with success. Unfortunately, we have failures, as we always will have in this sector. We cannot save everybody. However, there has been enormous success.
Is the Tánaiste aware that if distributors are put out of business it will have a detrimental effect, particularly in rural Ireland, on small shops and services that require distributors and suppliers to travel to outlying areas? They will lose business and will not be able to stay open. This will have the knock-on effect of loss of jobs and living standards in rural areas.
The time for that question has expired. We will proceed to Question No. 23.
