Willie Penrose (Longford-Westmeath, Labour) | Oireachtas source

I am glad to have the opportunity to contribute to this Bill. When I was at the Cabinet, it would not be unfair to say that I was a strong advocate of the Bill. That is because I was chairperson of the Oireachtas Joint Committee on Enterprise, Trade and Innovation which prepared the first comprehensive report on the issue in March 2010, which examined the supplier-retail relationships in the Irish grocery market. That report identified serious irregularities in the market, which it recommended the then Government act to eliminate. It provided a very strong case for the introduction of a statutory code of practice and the appointment of an ombudsman to oversee its implementation and the strict adherence to its terms by all the participants. We indicated at the time that such a code of conduct should facilitate the maximum level of transparency and oblige suppliers and retailers to publish data, including their profit margins. We heard a researcher who went incognito to interview people, because there was a genuine fear that people would be delisted and son on. That was an excellent committee and it produced an excellent report, with seven very strong recommendations.

This Bill is complex and is technical in nature but it is a long time in gestation. The dissolution of the Competition Authority and the National Consumer Agency and the establishment of the consumer and competition protection commission has been long awaited. It was promised in the programme for Government as part of the elimination and streamlining of quangos, although the amount of money saved from this amalgamation would not set the place on fire. Nevertheless, it is a move in the right direction. I hope that this new body will be a strong and independent watchdog in carrying out its diverse functions, such as enforcement, investigations and even termination. It needs to be properly resourced to be effective in ensuring that the voice of the consumer in particular areas is heard and protected.

I also hope that this new rationalised quango will not do what many quangos do. Very often the first thing quangos do when they are set up is to focus on medium sized businesses, which is the line of least resistance. While there are financial parameters involved from a turnover perspective, the commission should not just focus on that when dealing with consumer protection. The State is often one of the big suppliers of services and it should be the first port of call in ensuring that consumers are not getting fleeced. The setting up of Irish Water must be focused in this context where the interests of the consumer should be paramount, and these should be accommodated in this Bill. Irish Water should ensure that the consumer interest is being protected and it should not become a monolith that can do what it likes.

It is important that there be some constraints brought into play regarding that organisation.

The savings achieved from the formation of the new body are estimated to be €170,000, which is minimal in this context. One of the main objectives of the Bill is to strengthen the enforcement of competition law by enhancing the powers of the CCPC, which are focused on competition offences that are serious and regarded as white-collar crime.

I am aware that significant enforcement powers are already available to the Competition Authority under the Competition (Amendment) Act 2012. This Bill strengthens those and gives additional powers to the new CCPC by extending the provisions of the Criminal Justice Act 2011 and the Communications (Retention of Data) Act 2011 to serious competition offences. I assume these will all pass muster in the context of our constitutional provisions and the emergence of new jurisprudence in this area at EU level and globally.

The Minister will recall that I raised the issue of media mergers in the Dáil by way of a number of parliamentary questions and Topical Issues, to which he responded on a number of occasions. It is now more than five years since the advisory group on media mergers, under Mr. Paul Sreenan, SC, published a report. It contained 11 significant recommendations. I requested that these be implemented by way of primary legislation and that the Minister should, if necessary, sever the legislation because, as far as I was concerned, it was too slow emerging. There seemed to have been an unnecessary delay. I did so with a view to ensuring the Minister for Communications, Energy and Natural Resources would become the repository the public interest aspect. The Bill includes the change, which differs from the advisory group's recommendations, but this is sensible and correct in that the Minister for Communications, Energy and Natural Resources has seisin of the key areas of media broadcasting in the digital area. The issue of dealing with the question of plurality, from the perspectives of both ownership and content, is critical. I particularly welcome the proposal to designate the relevant joint Oireachtas committee as a notifiable body when considering proposed media mergers from the public interest aspect. This CCPC will examine the proposed media mergers solely from the competition perspective, while the public interest test and the final decision rest with the Minister for Communications, Energy and Natural Resources. This allows for more consistency and effectiveness, and I applaud that. It signifies a clear division of responsibility and is in full compliance with the advisory group's central recommendation in that regard.

There is a comprehensive set of definitions incorporating a detailed list of relevant criteria that should be taken into account in the context of determining the public interest in the consultation process. These are voluminous and comprehensive and they reflect where the public interest lies, which is important in the context of media monopolies. I do not like media monopolies. A big problem in Ireland is that many of the newspapers are either at the centre of the political spectrum or are right-wing, economically and otherwise. There is no newspaper, or very few, propagating an alternative view. While citizens can have some very good ideas in this country, it is very hard for them to find a forum in which to air them because they do not fit in with the prevalent orthodox thinking.

I am particularly interested in the grocery goods provisions, and in particular the attempt to regulate particular commercial relationships and specify the time at which the Minister can make such regulations. I approach this aspect of the Bill with some form because I chaired the Joint Committee on Enterprise, Trade and Employment, which published a report on supplier relationships in the Irish grocery market in March 2010. We put significant effort into compiling the report, including by way of commissioning necessary research involving a number of grocery suppliers. Based on informal information gathered from suppliers in the State, there was good reason for concern that unfair practices were occurring in the Irish grocery market. There was no doubt about that in the context of the research and it is set out in our executive summary. I recall that we were eager to ascertain from various businesses the types of payments they were requested to make to retailers. The wide range of responses was illuminating. Payments were made to list products, and continual payments were made for their ongoing listing. There was a rebate per unit of items not sold by the retailer, and there was promotion investment and marketing contributions. The businesses regarded these types of payments as comprising a euphemism for "hello money". There were payments for retendering and rebates to the retailer, etc.

Chapter 5 of the report was illustrative and illuminating in so far as it clearly highlighted the disproportionate market power that large retailers retain in the Irish retail market and the disadvantages that this causes for suppliers and other retailers when seeking to conduct their business. I refer to the imposition of unfair conditions on suppliers. This has to be rooted out to bring about some sort of level playing field.

A follow-up report was prepared and published in October 2013 by the Joint Committee on Agriculture, Food and the Marine under the chairmanship of Deputy Andrew Doyle, who spoke earlier. I am a member of that committee. The report was called "Report on the Grocery Goods Sector: increasing equity and transparency in producer–processor–retailer relationships". It is clear that primary producers were suffering and being squeezed out of the market. The committee made 13 key recommendations, some of which we hope have influenced the Minister's deliberations on this Bill. We trust the Minister might be open to appropriate amendments to incorporate some of the recommendations that are not reflected in the Bill.

We recall the spectacle at Christmas of horticultural produce virtually being given away, at prices of 9 cent and 10 cent per packet. One would not even buy a millilitre of oil for the farmers' horticultural machines for this. This cannot be deemed acceptable.

We need to protect small rural shops because they are being wiped out. There is no competition at all and they are being gobbled up by the large multiples. According to traditional Darwinian theory, the strong will always survive and gobble up the weak and eventually wipe them out. In large tracts of rural Ireland we will not have one shop. An example is the area between Mullingar and Longford. Within the next three to five years, there will not be one rural shop there. Everyone believes the big supermarkets are great and they are going to them to shop but at 9 p.m. there will not be any supermarket in the local village to cater for the person living two miles away who is short of a pint of milk or loaf of bread. Very often, one is better off paying the 2 cent extra to have a service that will not be made available by the multiples. I often say this to consumers.

In England, the corner shops were wiped out but now there is an effort to return to them. When our shops are wiped out, there will be an oligopoly, with a branch of one big supermarket chain in each town. The chains will be able to coexist because if there is a branch of one in one town, there will be a branch of another in the next. They will get on. The only people who will be wiped out will be the small people at the bottom of the food chain.

We need more transparency with regard to profits made by multiples in Ireland. This would require legislation. I understand that this might prove problematic in terms of the rules governing foreign direct investment, on which the Minister is working. The representatives of the multiples will not appear before a committee of this House. Transparency would result in the throwing of some light on the actual cost of doing business in Ireland. Businessmen are always referring to the higher cost of doing business here. Transparency would show whether the often-vented mantra that it is more costly to do business here is justified. I hope the regulations, which are complemented by new investigation and enforcement powers, achieve a level playing pitch between suppliers and retailers in the grocery goods market.

The introduction of regulations with statutory underpinning will probably be stronger than the code of practice and conduct we advocated and could be subject to quick legislative change and intervention to cater for eventualities or outcomes that were not or could not be anticipated. Therefore, it allows for greater flexibility. I know where the Minister is coming from in that regard. That is to be welcomed.

The Minister will liaise with the Department of Agriculture, Food and the Marine in formulating the appropriate regulations. I always like to see regulations but, when being introduced, they should always be subject to the views of the House so they can be amended, if necessary. This is important. I hate the idea of secondary legislation being brought forward and rushed through. In such cases Members are regarded as not having any ability at all to make change. In the making of regulations the Parliament should not be sidelined.

It should never be forgotten that the primary producer, who is essential to the food chain, is also the most vulnerable, very often producing a product that is perishable and with a limited shelf life. That must be reflected in the regulatory framework. Equality in bargaining power should be the central objective. It is important that the imbalance of power in the food chain between the producer, supermarket and supplier be redressed.

One of the concerns raised at the agriculture committee is that any enforceable or statutory code, such as is being introduced under this Bill, should work in harmony with EU law. If a new code is introduced in isolation, there is a danger that Ireland could lose its competitive advantage, possibly leading to a distortion of trade.

With regard to freedom of negotiation, I note that section 4 of the Competition Act deals with representative organisations, for example, those representing pharmacies, GPs and the actors body, Irish Equity. This is something I also had a particular interest in when I was Chairman of the committee. Indeed, our President was somebody who advocated this very strongly. Those organisations were precluded by domestic competition law from representing the interests of their membership. When in opposition, I was vociferous in calling for this legislation to be amended to reflect the situation that prevails on the ground, so people could advocate and represent their interests, for example, actors and GPs, although I will not comment on the current situation except to say that we can see that everybody is circling but just cannot come to the point of getting some sort of deal.

I am aware that aspects of this have been subject to court action and I do not want to interfere in that. However, there may be an outcome in terms of judicial determination that might be helpful in the context of this Bill. I hope appropriate amendments will be made to the original Act to accomplish this objective, which is important. I look forward to the rest of the debate. The Minister is to be complimented on bringing forward the legislation at this time.

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