Éamon Ó Cuív (Galway West, Fianna Fail) | Oireachtas source

While I welcome the very belated publication of the Bill, some of the previous speakers have highlighted a whole lot of issues which remain unaddressed in the proposed legislation. The Minister has now been in Government for three years. The Bill was on the A list in autumn 2012. We are getting a Bill dealing with the relationship between suppliers and retailers which gives the Minister the power to make regulations. I wonder how many of the regulations will be made before the next election. I wonder if the Minister will publish the legislation and bring it to the House for detailed debate. If that is not done, we will not get something effective.

Europe has made a god of competition. It considers that if it is competition, it is always good for the consumer. What Europe defines as "competition" is in many cases a free-for-all among small groups of very dominant players. Too much of anything, no matter how worthy in principle, always leads one to a bad space. We saw that in relation to the banks. The theory was that the banks would regulate themselves as they knew how to make money. It was thought that if there was outside competition, the banks would get it right and everyone would get money at a competitive rate. AIB, Bank of Ireland and others now justify the mess they made by arguing that they had to follow a small bank, which was Anglo Irish Bank. It is a simple example of the way the god of competition across the world led to major difficulties.

Regarding retailers, particularly the multiples, the first thing to take into account is the fact that five major companies - Musgrave, Tesco, Aldi, Lidl and Dunnes - control the bulk of the Irish retail market. These are very powerful purchasing groups. The second thing we must get into our heads is a bit of joined-up thinking. We are always in favour of more expenditure and free this and free that, forgetting that the money must come from somewhere. We always talk about cheaper prices for consumers, but we must be clear about who will ultimately bear the burden of cheaper prices and what the broader price will be. Our economy depends to a very great extent on the food industry. It is vital to the well being of the country in terms of economic activity and Exchequer funding. So much of what we earn as our net international earnings comes from agriculture and the agrifood industry. If we talk about cheaper prices for consumers while decimating an industry employing 300,000 people, are we really solving any problems and obtaining a price advantage? Are we in fact taking the money from the very consumers we intend to help by making the economy less robust? Will we end up having to put more money into the CAP to ensure the survival of the family farm? Are we, as a society, of the view that a factory farm approach in Ireland would be better than the structure we have with all the consequences a change would mean for the environment, rural communities and society at large? We must lead a debate in which all of the angles of every decision we make is understood.

We must recognise that the major multiples do not act in the interests of the consumer. If they did, they would not sell alcohol below cost. Many Members have pointed that out today. The multiples know it is not good for the consumer to buy vast quantities of alcohol while skimping on food and other essentials. They do it because it is profitable and provides them with the leverage to attract customers who then buy other things. If the multiples were altruistic, would they always have the sweet counter up beside the checkout to get the loose change from one's pocket when the children want the sweets? This is a country which has a major problem with obesity. Supermarkets are there to make money and for them it is all about the bottom line. We found out when we dealt with this in the joint committee that the major problem we face is that we do not know what supermarkets make in Ireland. We know that prices are higher here, but we do not know how much money is being made. Supermarkets make vague statements about higher overheads, but that cannot be the cost of bringing the goods in. Prices in the North of Ireland are not the island of Ireland prices, they are the UK prices.

I want to talk about what happens in reality. It is something the Bill will do very little to address. The joint committee looked at the liquid milk situation in great detail. Ireland has a national milk agency which is made up of different parties and is a Government-sponsored body. Its job is to ensure there is fresh milk on shelves 52 weeks of the year. The agency produced a great many statistics to the committee which gave lie to the idea that if the price to the farmer is reduced, the consumer gains. According to the agency, while the price of milk is not much different from its price in 1995, the farmer gets 11% less for every litre than he or she did nearly 20 years ago. In other words, farmers used to get 43% but now they get 32%. In simple terms, that represents €45,000 for a 100 cow farmer producing 5,000 litres per cow.

It is a huge amount of money and shows when they squeezed the liquid milk producers in the State, as we know they did, the ultimate beneficiary was not the consumer but somebody in the middle. We have considerable knowledge on how much the processor takes out of it because some instances involved co-ops which are farmer owned. We know they are not the location of the big rise in costs.

On 30 March 2014 a Sunday newspaper contained the type of advertisement to which one would not pay too much heed in the normal course of events. A certain major multinational retailer in the State made a promise to keep the price of a punnet of strawberries at €1.99, of tomatoes at €1.79 and of blueberries at €2.69 for the next 12 weeks. One might think bully for them and that is great for the consumer but before we all rush to clap them is it not curious this was done just as we came into the Irish season, when Irish producers put these materials on the supermarket shelves? If the Minister carries out an investigation he will find these are not economic prices for Irish producers to produce these goods. I wonder whether the supermarket suddenly lost money on these products or whether it put pressure on producers to reduce their prices to uneconomic levels.

For good reasons the people involved in the industry are reticent to speak about what is going on for fear of retribution. One might presume a benign scenario in the price promise case I have detailed, but we know what happened at Christmas, which not only affected primary producers at the one time of the year they hoped to make a few bob but it also put ordinary greengrocers who are not part of the multiple set-up at a total disadvantage at a time of the year they were trying to make a few bob. These people can do this one year and need never do it again as they can destroy with one stroke. I am interested to hear whether anything in the Bill will stop this type of practice.

We have spent the past three months looking at the issue of beef, bull beef, steer beef and every other type of beef but many valid questions have not been answered. It is fair to state some of our problems have arisen because of the horsemeat scandal of last year as there is much greater inspection in the factories by multinational retailers with regard to what they get, and rightly so. To blame processors or somebody in the supply chain for putting in the horsemeat is a little disingenuous and simplistic. I have no doubt part of the temptation was the ever-present downward pressure on prices on those competing to remain listed on the supermarket shelves. Of course people should not cheat but this does not mean one should not look at the pressures they face which drive them to cheating. We have many unanswered questions and I am afraid we will not receive composite answers.

Something which greatly annoys me is that if a band of farmers, such as liquid milk producers, come together to try to level the playing pitch against these enormous organisations the Competition Authority will be on their backs suing them for forming a cartel. I understand the new CAP will have provisions to allow producer groups a structure to defend the interests of the smallest weakest parties involved in the chain, but when I asked the Department of Agriculture, Food and the Marine about the details I was told there were many difficulties with it and the Department could not indicated to me what a producer group will be allowed to do. As far as I am concerned unless the producer group is allowed to act on behalf of farmers in a concerted way, and people at primary production level are allowed join together, the completely unequal relationship which exists at present will continue. If anybody thinks this unequal relationship is a good idea I ask them to consider what will happen if some day we end up in a country which produces no potatoes, no vegetables and no liquid milk and we import liquid milk onto the island of Ireland. It involves very specialist production. Perhaps we will import it in midwinter.

The Minister shied away from the idea of a statutory code and instead he will be able to make regulations. Will he give us detailed indications on which of the provisions in the Bill he intends to use to make regulations? They are specific. Will he confirm whether he has instructed the officials to start drafting these regulations in anticipation of the Bill passing through both Houses of the Oireachtas? Will he give us an indication as to whether, prior to the regulations being laid formally before the House, he will allow and facilitate the draft regulations being brought to the appropriate committee? I suggest this would be a joint subcommittee involving the committee dealing with the Minister's Department and the committee dealing with agriculture. This would allow us to examine the draft regulations. When is it hoped to have whatever regulations the Minister intends to introduce signed into law?

I am not against the idea of using regulations because they give the Minister a set to which he can keep adding, so long as the general provision in the Act is wide enough. This is something we must consider when the Bill is going through the House. The use of regulations will allow for easier amendment. I do not believe the regulations in themselves will deal with the fundamental concern I have, which is not about defending the likes of Procter & Gamble or Nestlé against a supermarket because I am sure they can have an equal battle and can slug it out on equal terms. They are not where the problem lies. We know where it is. Protecting our agriculture industry against predatory practices, which are happening, and protecting small manufacturers and artisan foods against predatory practices would not have any significant effect on the consumer price index. It would be possible for the supermarkets to absorb it if they had a mind not to abuse such products in their pricing policy.

I am curious about an aspect of the Bill and I ask the Minister to explain it. If one of the big five supermarkets breaks the regulations it will face a summary fine of €3,000 and €5,000 for a second offence, or a fine of €60,000 on indictment and €100,000 for a second offence. I am sure they are trembling at the thought they might be fined these amounts.

I am sure they are being kept awake at night wondering how they will come up with the money to pay that kind of fine if they are prosecuted.

It is interesting that the Minister said he might name some of the companies we are dealing with. We have named Dunnes Stores time and again. One of my colleagues did so again during this debate. In my view, Dunnes Stores showed total discourtesy to the Oireachtas, which is elected by the people, when it refused to take up an invitation to address the joint committee. In fairness to the Musgrave Group, RGDATA, Tesco, Aldi and Lidl, they all came in. Dunnes Stores decided to say to the elected people: "We do not answer to you; we do not turn up." I would not mind but it is an Irish company. It is amazing that the media, which got very excited when one individual - Angela Kerins - failed to turn up at a committee meeting, for some reason did not show any interest in the fact that a company which has a great deal of influence over people's lives did not turn up in this case. Even though Dunnes Stores has much more influence over people's lives than Rehab, its failure to turn up does not seem to have been worthy of media comment. That is why I believe the threat to name and shame organisations under this legislation is unlikely to faze some of them.

I do not envisage that many prosecutions will be taken unless the proposed competition and consumer protection commission takes prosecutions off its own bat. One is told time and again by people involved in this sector that they are unwilling to speak on the record about what is happening because they are afraid of being delisted by the five big players. They will do no more than give an indication of what is happening, or they will get a third party to do so, because they know their goose is cooked if they are delisted by the five big players. They will be liquidated and will go out of business. Despite the proposed regulations, the way this is set up leads me to expect that not many complaints will be made. Too many people will be afraid to make complaints because they will be worried that to do so would cause their situations to go from bad to absolutely worse. Therefore, I am not yet convinced that we have dealt with this whole issue. I believe the EU has to take a leading role in this regard. The total reform of this whole relationship that is needed should be led at EU level. This is bigger than any state. Some of these supermarkets are much bigger than some states. Unless this imbalance is tackled at EU level, European farming will require more and more subsidies to survive.

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