With the permission of the House of the 20 minutes I have, I intend to give in this order Senators O'Toole, Murphy, Cregan and O'Shea two minutes each.
I propose this motion with some relish and, indeed, some surprise because as an unapologetic promoter of free trade and free competition I felt that instinctively I would be on the other side of this bid. Indeed, when this bid was made I felt that way. Having looked in detail at what is going on behind this Irish Distillers bid, who is behind it and what their possible intentions are and the potential damage that they can do to this country, I believe that this is a classic case for the Minister to use the power which he has under the 1978 Monopolies and Mergers Act.
This bid infringes — if ever there is a classic case of infringement — the doctrine of fair trading and fair competition for which this power was put in. I understand the Minister's position and I do not want to anticipate his reply. I know the matter is now before the Fair Trade Commission and I know that that puts the Minister in a slightly awkward situation to pronounce or to express an opinion on it at this stage.
On the other hand the Minister must understand my situation because this is the last time I can actually raise it. The Seanad will be in recess when the Fair Trade Commission reports on 5 August and probably for a while after that when the Minister makes his decision. The timing of it is slightly unfortunate. As much as anything else I want the Minister to hear what we have to say at this stage rather than get a reply from him which kicks for touch — which I expect will actually happen.
The first thing I want to say to the Minister about the recommendations of the Fair Trade Commission is that, whatever recommendations are made, and perhaps the recommendations will be to block the bid, the Minister should consider whether he can enforce them. If the Minister decides to allow the bid with certain stipulations as recommended by the Fair Trade Commission, the one criterion and the most important one is whether he can actually enforce the stipulations he makes himself. Let us make no bones about it. Probably many of the decisions made after that time, if the bid goes through, will be made outside the jurisdiction of this country and of course his writ does not run there. That is the most important thing the Minister should consider.
The bidders' case for Irish Distillers rests on one principal fact alone and that is that Irish Distillers have been a sleepy company, with a bad profit record and have not performed particularly well. That is something which, by implication, the Irish Distillers company themselves admit in their document and in their statements. They say quite simply that they have got to change and have recently changed their marketing techniques. They admit implicitly that all has not been well in the past with Irish Distillers but they also say, and I believe them and I think others should look at the statements and what they have said beforehand, that the future for Irish Distillers, with their new marketing programme, is a rosy one and this should be examined before any decision is made.
I think it carries great credibility but the bidders have made a very clever commercial move. In fact, it is very similar to another bid for Abbey, another Irish company, by French Kier not so long ago. When the bidders see a company which is about to take off, they say to themselves: "Right, we had better nip it in the bud before it shows the sort of profits which would be out of our reach". It is my belief, and I think it is the belief now of many institutions around the city of Dublin who hold the shares in Irish Distillers, that Irish Distillers was about to take off and that this, while being a great commercial decision by the bidders, is an opportunist bid and, as a result, we should look at it in a different light. That does not offend the rules of commerce but it should be realised that Irish Distillers are on their own now. There is a very great probability that Irish Distillers, its products and its exports would take off this time.
I hold absolutely no brief for the defence which says quite simply: we must keep Irish whiskey Irish, "Keep the spirit Irish" as the slogan goes. That does not wash with me and it is not a good argument. However, there are good arguments about Irish employment, about Irish consumers and about Irish shareholders. They have got to be looked at in a non-nationalistic but in a highly sensible way because 1992 does not mean that we become slaves to British and European industry. The Act is there particularly to protect us from that.
What the bidding company has done, and it is something which the Minister must look at when he is looking at the bid, is that it has created a camouflage. It states in the film which many of us went to see in Buswells, and in its document, that GC & C is an Irish company. I think it should be put on record, that what it has done is to create a company and put Irish directors on board and make it look Irish, but that company as anybody who looks into it in any detail at all, is fully owned by British companies and will be fully controlled by British companies in the future if this take-over goes through.
Why would they have to disguise this? Why have they gone to such enormous efforts to disguise the fact that they are a British company? It is simply and solely to convince the Minister and politicians that they are an Irish company and not a British company. In the offer document which GC & C Brands, as they call themselves, which is a shell company, have issued they try to establish their strong Irish roots, as they call them; in 26 lines they mention the words "Irish" or "Ireland" 17 times. It is vitally important to them to prove their bona fides of being Irish. They are not Irish. That should be established. Whether it is relevant or not I do not know but it is relevant in one way in that the considerations of Guinness and Allied-Lyons and Grand Met. who are the parent companies, will not be for the Irish workers, they will not be for the Irish consumer and they certainly will not be for the Irish shareholders because if this bid is allowed to go through there will not be any Irish shareholders any more. It will be a fully owned company from abroad.
The Minister should also look at the fact that the profits of this company, if there are profits, and if there are increased profits, will also be in the hands of overseas companies. The profits will be repatriated like it or not. The profits will go back one way or the other to Allied-Lyons and Grand Met. and to Guinness. It is undeniable that that is the case and it is also undeniable that while that may be good commercial stuff for the people involved in buying the company it is patently against the national interest that this should happen. That is why this clause is in and that is why the Minister should consider exercising it.
I should like to make a couple of points about Guinness and about the promises in the document. GC & C will say that it is not, of course, their intention to play ducks and drakes with the Irish whiskey industry, that the fact that Guinness own 49.6 per cent of C and C which is making the bid, and the fact that they have a dominance in Scotch brands will be irrelevant because they will say, and they say in this offer document, that Guinness, in fact, will have no say in the day-to-day running of Irish Distillers when and if it is taken over. I find that difficult to believe. I would remind the House of one thing, that in this document which I hold here, the offer for Irish Distillers, they declare, "we intend that the bottling of Jameson for the US market, currently being carried out in the US, will be returned to Ireland." One noble intention to convince us to allow this through.
The document also states, "it is important to emphasise that Irish Distillers' products will continue to be produced at the Midleton and Bushmills distilleries and that all key business activities will continue to be located in Ireland". That is a noble intention but I would remind the Minister and the House that the promises made in that document are not worth the paper they are written on. I will have to remind the House when saying this that they can take all the promises in the world in this document but I ask Members to remember the controversial bid which Guinness made before for Bells and which Guinness won. What is considered by many to be the prime reason why Guinness eventually won that bid and took over Bells was because they promised they would move their headquarters from London to Scotland. To my mind that was the telling decisive factor in that take-over bid. Guinness's headquarters remains in London to this day and that promise was forgotten about the moment that the votes were counted. That is important.
I ask anybody who reads this document to discount the promises in it, to look at it in the cold light of day, and to look at the potential damage that can be done. It is absurd for Guinness who have three members on the board of C & C and to whom this will cost approximately £50 million, if not more because it values Irish Distillers at £200 million — on value rule of thumb it will cost Guinness £50 million — to say that Guinness will have no input into this, that Guinness will be a sleeping partner. No company worth its salt could possibly put £50 million into an operation of this sort and say, "Get on with it, all right it is fine if it helps Scotch Whisky here but it does not matter". There will be an obvious conflict of interest if this bid goes through and Guinness is the prime example of where that conflict will lie.
Whereas it would be absolutely correct in certain circumstances to allow take-over bids to go through, it is utterly wrong that the Minister should not use his power where indigenous industry is involved, where the Fianna Fáil manifesto itself, in fact, promised to protect indigenous industry and where, in fact, there is a confusion. There is a confusion about being modernistic about 1992 which is about free trade and fair trade and is not about unfair trade and about conflicts of interest. I believe this is the classic case. The Minister should not be embarrassed, he should not be shy and he should not be coy about using his power in this case. Simply, 1992 is not about allowing monopolies to come in and damage Irish industry.