Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

Deputies Calleary and Tóibín have again called for a reduction in the turnover threshold specified in the Bill for a qualifying relevant grocery goods undertaking from €50 million to €10 million annually. As I set out on Committee Stage, the current threshold has been carefully chosen and I will repeat the main considerations again. First, I want to ensure these provisions are not disproportionate by including a broader swathe of processors, suppliers and retailers which are not regarded in major players in the national grocery goods sector. At the level of €50 million, we are bringing in 41 major retailers. The backdrop to this was that there are very large retailers which are exercising unfair power and the result is that they are imposing unfair contract conditions.

Many people advocated that we follow the UK approach where only 11 retailers covered as it chose a much higher threshold than we did. In the UK the threshold for qualifying designated retailers for the purpose of the Groceries (Supply Chain Practices) Market Investigation Order 2009 is any retailer with a turnover exceeding £1 billion with respect to retail supply of groceries in the UK. The €50 million we are choosing is based on an extrapolation of the qualifying turnovers under the UK legislation on a population basis.

We are also going beyond the UK legislation in including suppliers meaning that we are embracing, as an area where we will provide regulation of contracts, small retail outlets that feel a large supplier is treating them unfairly. No such protection is contained in the UK provisions. We are going beyond what is done elsewhere.

Moving the threshold to €10 million would bring more than 2,500 operations into the requirements to set out in writing, have compliance officers and all the rest of it, which we do not feel is proportionate. The sort of issue that has given rise to public concern in the Oireachtas Joint Committee on Jobs, Enterprise and Innovation, and the Oireachtas Joint Committee on Agriculture, Food and Marine has been around the really large players in the sector.

The other significance of €50 million is that it is the threshold that the European Commission uses for distinguishing between small and medium-sized enterprises, and large enterprises. I believe that is appropriate.

We are trying to deal with a specific set of problems arising from the very significant market power of particular operators in the retail sector. We are trying to ensure fair sets of practices are applied to those who have to deal with them. We are not trying to go beyond the origin of this public concern. I do not want to be disproportionate about the approach being taken here which is why the €50 million is appropriate. Relative to the UK we are setting the right threshold. We are using the EU definition of SMEs.

This has had a very long history as the Deputies opposite know. Many people are saying on one side that the €50 million should be pushed up to €100 million and there are many people on the other side who say the €50 million should be brought down. In the consultation this emerged as a via media. As I have explained, it has been defined in a way that is much more in the middle compared with the UK whose provisions were extolled by those who were saying we should move to a UK-style approach in this area. We are striking a reasonable balance. I am not disposed to accept the amendment.

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