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Food Industry.

Dáil Éireann Debate, Thursday - 11 March 2010

Thursday, 11 March 2010

Ceisteanna (6)

Máire Hoctor

Ceist:

6 Deputy Máire Hoctor asked the Minister for Agriculture, Fisheries and Food if he is satisfied with the EU initiatives being undertaken in regard to the food supply chain; and if he will make a statement on the matter. [11863/10]

Amharc ar fhreagra

Freagraí ó Béal (17 píosaí cainte) (Ceist ar Minister for Agriculture, Fisheries and Food)

As I indicated in my reply to the Deputy on 27 January, I am pleased that the Spanish Presidency is committed to progressing the issue of improving the functioning of the food chain. There is a need for considerable improvement so that all players, including producers and consumers, receive fair treatment.

The Council of Ministers has held an initial exchange of views on a communication from the Commission entitled A Better Functioning Food Supply in Europe. The discussion focused on questions from the Spanish Presidency dealing with transparency and balance along the food chain, self-regulation, food price monitoring, territorial supply constraints and future initiatives at EU level.

In regard to market transparency, the main concern was the need to achieve a greater balance along the chain between producers, processors and retailers. Colleagues proposed greater monitoring of prices and the establishment of codes of good practice. I took the opportunity to inform my ministerial colleagues of the steps being taken by the Irish Government to implement a national code of practice for doing business in the grocery goods sector with a view to ensuring a fair trading relationship between retailers and their suppliers. As we are operating within the Single Market, measures of this kind need to be taken at Community level to provide an effective and sustainable food supply chain.

Views differ among member states as to the extent to which new EU regulatory frameworks are required. Some consider that contractual relations and other arrangements to regulate the supply chain are a matter for private operators while others favour a regulatory framework or guidelines at EU level. My own view, which I conveyed, is that we need to monitor and audit unfair contractual practices at EU level with a view to ensuring compliance with competition law. There is also a need to look critically at EU competition law in so far as it can militate against consolidation at producer level and make it difficult to achieve the scale necessary for trade competitiveness.

Suggestions were also made to improve the food supply chain by increasing research and development, providing new economic incentives and investment opportunities, reviewing the operation of state aids and strengthening the operation of producer groups. I emphasised the need for careful and sensitive use of market management measures. When applied in a timely and proportionate way, they can and do help to maintain balance in the market and assist in the provision of fair returns to producers. We saw this last year in the milk sector. The new CAP must address the difficulties for the agrifood sector arising from increased market volatility and provide effective mechanisms to manage this.

Additional information not given on the floor of the House.

The Presidency is currently preparing draft conclusions for Council centring on five key ideas. These are improving the structure and consolidation of the agrifood industry in order to help to achieve the scale necessary for greater bargaining power when dealing with large retailers; increasing transparency along the food chain to make it easier to track price levels and developments and to press stakeholders to speed up price transmission and contribute to distribution of added value along the food supply chain; and combating unfair trading practices. The Commission proposes to assess these practices in the Internal Market and propose any necessary Community measures to address such practices.

The Commission proposes to work together with the food supply chain stakeholders to prepare sets of standard contracts. Adoption of codes of good commercial practices is also envisaged.

The Commission proposes to work with the European Competition Network to develop a common approach to competition issues of relevance for the functioning of the food supply chain. The Council is reflecting on the interplay between the existing competition and CAP rules.

In addition, together with the European Parliament, the Council is currently working on a Commission proposal for recasting Directive 2000/35/EC of the European Parliament and of the Council of 29 June 2000 on combating late payment in commercial transactions. In Ireland we have already taken action to ensure earlier payment by the public sector.

The draft conclusions are particularly helpful regarding the need to audit unfair contractual practices and to look again at how EU competition law is interpreted. At present it can discourage consolidation at producer level. The Presidency has tabled the conclusions for Council at its March session.

I refer to the need for a competitive edge as Irish producers and EU members within the food chain. What is the position of the negotiations at the Commission on policy in respect of food labelling especially on the matter of country of origin, but also the place of farming and the origin of the produce? While serving as Minister of State at the Department of Health and Children, I had the opportunity when deputising for the Minister, Deputy Harney, at the December 2008 meeting of the Council of Ministers to raise the issue of the country of origin and food labelling. At the time, the Commission indicated it would take until the end of 2009 before the information would be returned from it. What is the position now? Is the Minister satisfied with progress on this issue? It is in the interest of Irish producers that we maintain a competitive edge as EU members working in a global economy. I would welcome the Minister's response on the matter.

I thank Deputy Hoctor for the question on the labelling issue, which she has raised with me on numerous occasions. The Commission has carried out a two-year consultation on Community quality policy to better communicate to consumers higher EU standards in marketing, geographic indicators and organic and quality assurance to give EU farmers a competitive edge. The Council has endorsed a three-way strategy which includes the possibility of origin labelling by way of a compulsory reference to place of farming. The Commission will explore within the common organisation of the market the form that place of farming might take. It could be EU or non-EU based or country or member state of origin based. This is a good basis for progress. Ireland agrees that use should be made of existing mechanisms for price reporting and we support the proposed draft conclusion in this regard as well as the Commission price monitoring tool.

Obviously, much work remains to be done. This issue has gained prominence during recent years and there is a greater awareness and consciousness among all member states, or at least among the majority, in respect of the sourcing of food, apart from the origin of food, where it is processed and where the final product comes from. Even now, queries arise in regard to environmentally friendly farming, animal welfare and husbandry and so on. To some extent, the debate has widened. Unfortunately, decisions are not reached as quickly as we would wish at the Council of Ministers.

I was unsure whether the question related to competition policy or food labelling, but I will address both matters while I have the opportunity.

The Chair will afford great latitude as always.

We expect nothing less from the Leas-Cheann Comhairle.

I appreciate that. Will the Minster acknowledge in respect of food labelling that there is no willingness on the part of certain EU countries to proceed with a change to the country of origin labelling regime in operation at present, because it would materially affect their trade and the issue of substantial transformation? If there were a real political initiative at EU level in respect of this issue, the Government and the Green Party would be shouting about it from the rooftops. Let us not be disingenuous about it.

I refer to the Competition Act. I appreciate the Spanish EU Presidency is taking initiatives in respect of this issue but there is already a considerable body of law on the Irish Statute Book. Will the Minister acknowledge that the Competition Act 2002, which incorporates the treaty on the functioning of the EU, prohibits agreements and concerted practices which have as their "object or effect the prevention, restriction or distortion of competition in trade on any goods"? Will the Minister further acknowledge that upon the abolition of the groceries order in December 2005 it was stated that certain unilateral action on the part of non-dominant undertakings in the groceries trade would effectively be legislated for——

The Deputy is aware he cannot quote a question.

The dearth of legislation is causing the situation we have at the moment.

Deputy Sherlock's question is very comprehensive. Regardless of which side of the House Members come from we all support country of origin labelling. Some years ago, the Department of Health and Children, the lead Department with regard to labelling since it is the health directorate in Europe that deals with this matter, put proposals directly to the Commission on sheep meat and poultry meat. Unfortunately, those proposals did not progress. There is divided opinion in Europe but it is my judgment that there are more people in Europe now conscious of the need for an adequate and transparent labelling system than there would have been some years ago.

Recently, the Tánaiste dealt with questions in regard to the National Consumer Agency and the Competition Authority and in respect of a voluntary code of practice pending the realisation of a statutory code. This is very important because there is a great disappointment especially among producers and some processors about the unfair returns along the food chain. The necessary transparency is not there.

I was very pleased that the new agriculture Commissioner recently referred to the fact that he sought adequate returns for the primary producer and processor as well. He stated he would work with the competition Commissioner, Mr. Almunia, in that respect. European Union legislation is absolutely necessary.

It is welcome that the EU will give the lead on this matter. However, the Tánaiste and the Taoiseach have acknowledged in the Chamber that they understand why people are concerned. People at home are concerned about unfair trading practices and intimidation within food supply, which is threatening indigenous domestic suppliers. Will the Government accept that the British model of a voluntary code of practice has been torn up and scrapped and that there is a need for a statutory code?

Last August, Deputy Creed and I introduced the Food (Fair Trade and Information) Bill which outlaws certain practices. That Bill deals very simply with the matter of unfair trading and intimidation by dominant players. Ultimately, the consumer will lose out if we do not take such measures.

I refer to labelling. It is not simply a matter of country of origin. There is misleading labelling across the range. The consumer who wishes to buy a product is entitled to proper information. There is only one thing worse than no information and that is misleading information, which is all we have at present.

Deputy Doyle makes the valid point that this involves the primary producer, the consumer and the retail sector. It would be beneficial to everyone to have in place these new systems.

It does not benefit the retailer. He or she does not want it.

Recently, the Tánaiste spoke in this House of the introduction in the near future of a voluntary code to be followed by a statutory code which would follow legislation to merge the Competition Authority and the National Consumer Agency. It is within that particular architecture——

We have the Bill ready. It is all there, including a proposed office of fair trade.

I appreciate Deputy Doyle's work in this regard but the Department of Enterprise, Trade and Employment has been working very assiduously in respect of this issue. The legislation is complicated but it is a very important issue for every sector of society.

We can give the Minister the Bill.

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