The Bill is a further step in the direction of allowing the Supplies and Services (Temporary Provisions) Act, 1946, to expire. It re-enacts the provisions of the current Orders relating to tea made under that Act, the effect of which is to prohibit (a) commercial importation of tea by any person other than Tea Importers, Limited, and (b) wholesale dealing in tea by any person who is not the holder of a tea wholesaler's licence issued by the Minister for Industry and Commerce. Senators will wish that I should indicate the circumstances that gave rise to these Orders.
Prior to the 1939 war the bulk of the tea consumed in this country was purchased in, and imported from, London. On the outbreak of war the distribution of tea was controlled by the British Ministry of Food which promised that this country would be given its due proportion of the available supplies for which there was an unanswerable case in view of the prewar practice. The British Ministry of Food failed to implement this promise and in consequence from the early months of 1941 there was an acute shortage of tea in this country which involved the community in serious hardship. In order that this hardship might be relieved so far as possible, Tea Importers, Limited, a State sponsored non-profit-making company, was set up in April, 1941, for the purpose of purchasing and importing from every available source supplies of tea to supplement the meagre allocation from Great Britain. The company's purchases were financed from a bank overdraft guaranteed by the Minister for Finance and their efforts were successful resulting in appreciable additions to the weekly tea ration when most needed.
At the end of 1946 the Governments of India and Ceylon took action which precluded the British Ministry of Food from purchasing tea for re-export and this country was duly advised by that ministry that all allocations from London would cease as from the 1st April, 1947. Production of tea in 1947 was still substantially lower than demand necessitating the continuance of rationing here and elsewhere. In the circumstances arrangements for the importation of our tea requirements from origin had to be brought into operation as a matter of urgency. At that time the total production of tea had not caught up on world demand and it was considered undesirable that there should be competition for the limited supplies available between Irish buyers with the necessary financial resources to operate on their own account on the Calcutta and Colombo markets. It was also considered necessary at that time to ensure that the smaller Irish wholesaler was not placed at any disadvantage in securing a fair share of the available supplies at reasonable prices. Accordingly, in agreement with the wholesale tea trade it was decided that for the time being Tea Importers, Limited, should be the sole purchasing agency as from the 1st April, 1947. It was also decided at that time to restrict the issue of licences authorising the carrying on of a wholesale tea business to concerns which were conducting all the operations of a bona fide tea wholesale business from premises located in this country as it was considered that the admission of external wholesalers would increase the cost of tea to the consumer by introducing an unnecessary additional link in the chain of distribution. In the latter connection I should mention that it is the intention to bring in at a later stage an amendment designed to strengthen Section 6 of the Bill.
A subsidy to keep down the retail price of teas was introduced on the 1st November, 1947, and this development was an additional reason for maintaining Tea Importers, Limited, as the sole importer of tea.
Up to 1950 world production of tea continued to fall short of demand and as the tea issued by Tea Importers, Limited, was heavily subsidised there was no incentive to any individual trader to import tea on his own account. But in 1950 there was an improvement in the world supply position which enabled Tea Importers, Limited, to put on sale unrationed tea at a price which yielded a profit which was offset against the subsidy. These developments provided the incentive to the individual trader to endeavour to obtain supplies of tea outside this country for sale at the unrationed price thereby depriving the Exchequer of the benefit of the profit which would otherwise accrue from sales made by Tea Importers, Limited. Accordingly, it was decided to prohibit commercial imports of tea except under licence and to restrict the issue of such licences to Tea Importers, Limited.
Following abolition of the tea subsidy and tea rationing in July, 1952, consideration was given to the question of restoring freedom to the trade to purchase and import this country's tea requirements subject to direct importation from the producing countries. Proposals made in this connection by the Wholesale Tea Dealers' Association for the replacement of Tea Importers, Limited, and involving continuance of the prohibition of commercial imports of tea except under licence have been under examination but progress has been slow because of the complexities and uncertainties of the general tea situation.
In addition to the fact that the proposals made by the association contemplated retention of the restrictions on commercial imports of tea, it is recognised that the absence of these restrictions would involve Tea Importers, Limited, in serious risk of being unable to dispose, without loss, of heavy stocks of tea purchased for supply to the wholesale trade with bank advances guaranteed by the Minister for Finance.
Early in 1955 when the question of the purchase of 1955 season teas was under review the Wholesale Tea Dealers' Association made representations to the effect that the arrangements whereby Tea Importers, Limited, purchased and imported this country's tea requirements should not be discontinued earlier than December, 1956. It was pointed out by the association that the bulk of the demand in this country is for Indian tea and they represented that on account of the seasonal nature of the Indian tea market it would not be possible for the successors of Tea Importers, Limited, to commence to land before December of the year in which it was bought sufficient suitable quality Indian tea to meet the full demand. I agreed that the company should continue to be responsible for securing our tea requirements for a further period. In order to enable the company to continue to discharge this responsibility until arrangements of a permanent nature can be brought into operation, it will be necessary to maintain the present controls on the importation and wholesale distribution of tea. This is the sole purpose of the Bill, the life of which it is proposed to restrict to a maximum of two years. It is anticipated that a period of two years will be sufficient to enable arrangements to be made for putting the importation and distribution of tea on a permanent basis.
I ask the Seanad to give favourable consideration to this Bill.