Dáil debates

Wednesday, 16 April 2014

Competition and Consumer Protection Bill 2014: Second Stage (Resumed)

 

Question again proposed: "That the Bill be now read a Second Time."

1:55 pm

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein)
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Before the break, we discussed the importance of regulation but also the importance of the enforcement of regulation. This is a critical issue for so many elements of industry. We spoke about the difficulties experienced by many companies within the concrete industry and the damage done to the industry's consumers, including the State which would have been a massive consumer of concrete in the past with the associated cost to the taxpayer. The argument I was putting forward was that the proper resourcing of enforcement leads to a better functioning market which leads to reduced costs for the taxpayer and consumer and competitiveness in the entire industry.

In a draft paper looking at white-collar crime oversight, the academic Elaine Byrne last year questioned whether the State bodies were fit for purpose. The question is very relevant. Ms Byrne notes that there are just three forensic accountants within a team of 70 officers at the Criminal Assets Bureau. Privately, senior officers from different agencies have confided in Ms Byrne that diminished resources are strangling their ability to do the job effectively. Those are very strong words from those at the coalface of enforcement. The Office of the Director of Corporate Enforcement is another area where resources simply do not reflect the need with which it is faced nor the stated commitment of the Government to tackle significant wrongs such as the investigation into criminality in Anglo Irish Bank. Elaine Byrne notes that the Office of the Director of Corporate Enforcement saw a decrease in funding in 2011 of 7.5% and was allocated five administrative staff and five gardaí to assist with the Anglo investigation, one of the largest and most pivotal investigations of the economic health and well-being of this State. Budget allocations for the Office of the Director of Corporate Enforcement, the Standards in Public Office Commission, the Garda Bureau of Fraud Investigation and the Office of the Ombudsman have decreased. What we have seen is a retrenchment of resources to the bodies tasked with enforcing the regulations of the State - a State that is on its knees as a result of regulations not being adhered to in the main.

We all agree that the strengthening of competition law is important.

However, it is not worth a jot if the Minister does not resource it. We are calling for the Minister to show where the resources will come from for this.

The grocery sector, about which I started my contribution, is one of the most pivotal sectors of Irish society because most people are consumers of it, it creates and maintains a lot of jobs and many of the SMEs in the State supply that sector. The muted response by the large multiples to the Minister's legislation is a cause for concern. Criticism has been levied at the Minister for not introducing a code of conduct, as was first promised by Fianna Fáil as far back as 2009 and which was recommended by the Travers report in 2011. Such a code was to be placed on a statutory footing and this is where my problem lies with the legislation. The Minister has said that he considers that regulations would be more appropriate than a code of practice and I would like to hear more from him on his rationale in that regard. The Travers report recommended the placing of the code of conduct on a legislative basis. We accept that jobs, businesses and consumers need to be protected but so too do suppliers. What we are looking for is balance.

On publishing the Travers report and the draft code of conduct in July 2011, the Minister expressed his disappointment with the grocery industry's failure to sign up to the voluntary code of conduct. However, that is hardly a surprise because most sectors and most industries would desire unfettered markets and would like to be able to operate in any way they choose. Most instinctually look for a reduction in regulations that may impose charges on them and cause difficulties for them, even if such regulations are, in general, designed for the better functioning of that market and for the safety of the participants in it, especially if there are dominant forces within a market structure. We must be honest about the Irish grocery sector which has a number of dominant players and vested interests.

The Minister is also asking Opposition Deputies to debate and discuss regulations that have not been written yet. The Minister has said they will be drafted and enacted as soon as is practicable after the enactment of the Bill. Is that not asking the Opposition to buy a pig in a poke? The Minister is asking us to trust the Government on this, it will address the issues and deliver in an adequate fashion. Suppliers have waited for decades to see some concrete action on the sharp practices in the grocery sector. They can be forgiven for finding cold comfort in what is before us. They will feel that this Bill is promising something at some stage in the future for which they have already been waiting for a long time.

It is very worrying also that the Minister is proposing to introduce an initial series of regulations reflecting some of the powers open to him and then he will take a wait-and-see approach before deciding if they need to be amended or strengthened. In short, we are merely getting enabling provisions to allow the Minister to regulate and all we have here are the bare necessities, which the Minister may increase as he sees fit at some point in the future. We need a clear legislative framework and a level playing field now for this sector. It appears that this is not a definitive goodbye to "hello money" after all, which is deeply disappointing.

One of the phrases I have used most in the House since becoming a Deputy three years ago is that one cannot manage if one cannot measure. The Minister is probably sick of listening to me saying it at this stage. One of the major issues in this sector is large multinationals not declaring their turnover, profits or margins in this State. Hiding this reduces the ability of the Oireachtas to regulate and manage the sector. It also reduces the power of suppliers in their negotiations with these organisations. Transparency is on the side of good regulation and good market functioning and the Minister should also be on the side of transparency.

A free and diverse media - the "Fourth Estate" as it is sometimes called - is probably one of the most important components of a functioning democracy. Oversight of competition within the media should be strong, rigorous and independent. We need to make sure that we insulate the regulation of the media from the vested interests within the media itself. That could happen with a good, strong, independent commission. I believe that discretion in the hands of politicians on this issue is more often than not tainted by the huge influence that media moguls can have. Sadly, Ireland's media market is probably one of the least diverse in the world. The issue of the Denis O'Brien's Communicorp dominance in terms of media ownership in Ireland remains. Irish media has been characterised, for as long as I have known it, by a number of powerful oligarchs in Ireland and Britain. These very powerful individuals exert a fierce amount of control over the functioning of the State. A recent documentary on one of the news stations highlighted the level of influence that the Independent Newspaper Group had on general elections in the past and the deals made with Bertie Ahern in the run up to elections.

People talk about freedom of speech in this State but in many ways freedom of speech is determined by how much money one has to control broadcast and print media. If ownership is centred in the hands of a few vested interests, that has a negative effect on the functioning of democracy. Diversity and plurality are what we need in our media system. Plurality is undermined when governments have close relationships with media owners, the case in point here being the Government's close relationship with Denis O'Brien, especially in the light of the Moriarty tribunal. If this legislation is passed, what difference will it make to the Government's dealings with his media interests? I ask that the Government addresses some of these issues.

These are my initial thoughts and deliberations on this very important Bill. I look forward to hearing the Minister's responses to some of the points raised and to discussing this legislation further.

2:05 pm

Photo of Mick WallaceMick Wallace (Wexford, Independent)
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The Minister said that diversity of content and ownership across the media remains an important part of a healthy democratic society and I fully agree with him. However, he also said that he was retaining the basic model of current laws based on the principle of avoiding intervention by Government in media ownership, except in specific circumstances following procedures determined by law. I would like to see the Government not taking such a hands-off approach. I would like to see a lot more regulation in this area. Right now, the media in Ireland is in peril. The fact that the ownership of the Irish media is increasingly entering the hands of an elite few spells disaster for the possibility of engendering a vibrant and participatory democracy in this country.

The media and how it is structured does not appear out of nowhere. To quote the media historian Robert McChesney, "The policies, structures, subsidies and institutions that are created to control, direct and regulate the media will be responsible for the logic and nature of the media system". This means that the problem of the media is a political one and a serious debate about media monopolisation and the importance of a well-funded, objective and independent media needs to take place in this House. There is unquestionably a direct link between the control of the media and control over society.

It is interesting then to consider what kind of information the mainstream Irish media disseminates to the public. Last year, Dr. Julien Mercille of UCD published a revealing study that examined how The Irish Times, Irish Independent and Sunday Independent reported financial consolidation and general budget issues from the period of January 2008 to 31 December 2012. The results are startling. Dr. Mercille's research stated:

Significant support for fiscal consolidation [which we must remember is a core aspect of the austerity programme] is clear. In total, there are 431 articles: 236 (55%) are in favour of fiscal consolidation, 50 (12%) against it and 145 (34%) neutral. When neutral pieces are excluded, 83% of articles support fiscal consolidation and 17% oppose it. No time pattern could be detected in the evolution of views on fiscal consolidation, apart from the fact that a larger number of articles appeared towards the end of years (in the months of November and December), which is explained by the fact that this is the time at which the budget is discussed. Out of the 431 articles, 75 are written by outside writers (i.e. not journalists). Of these, 35 (47%) are economists or working in the financial sector, 13 (17%) are high political officials, eight (11%) are academics (excluding academic economists), but only five (7%) are from trade unions and seven (9%) from progressive organisations.
Only a minority of pieces explicitly opposed consolidation itself by calling for a fundamentally different strategy, such as Keynesian economic stimulus. This can be seen in the fact that among all articles, 8% opposed cuts and only 3% stated a preference for increasing government spending.

If only the 50 articles opposed to fiscal consolidation are considered, a similar pattern is found: 54% of them disagree with specific expenditure cuts while 20% suggest that public spending should be increased. The nature of the opposition to fiscal consolidation is therefore based mostly on disagreement with particular cuts, rather than with the principle of consolidation. This suggests that public debate in the media is framed around the ways in which fiscal consolidation can best be implemented, as opposed to comparing and contrasting it with other strategies.

Nevertheless, on economic policy, theIndependent newspapers are ideologically to the right of The Irish Timesand this explains why more opposition to conservative economic policies is likely to appear in the latter rather than in the former. This can be traced, in part, to the fact that The Irish Timesis governed by a trust that ensures some level of independence from commercial interests. For example, it does not have beneficial shareholders and cannot pay dividends. A number of its board directors also come from elite institutions. Like other newspapers, The Irish Times is dependent on advertising revenue and sales, which veer it to the right.

We must not forget that the media is part and parcel of the political and corporate establishment. Dr. Mercille has also written a paper on the role of the media in sustaining Ireland's housing bubble where he found that news organisations largely sustained the bubble until the property market collapsed. He wrote:

... news content reflects economic and political elites' interests and views. The Irish media can be seen as neoliberalised in line with Ireland's political economy. Over the last several decades, mergers have reduced the number of smaller, independent regional news organisations and increased the concentration of ownership... Both private and State-owned Irish media largely convey establishment views.
The control Denis O'Brien has over the media beggars belief. He holds a 29.9% stake in Independent News & Media, which accounts for 40% of all newspaper sales in Ireland. The said gentleman also controls six radio stations, including Newstalk and Today FM. He controls the Evening Herald, the Irish Independent, Sunday Independent and Sunday World, and co-owns the Irish Star. In addition, he owns 14 regional newspapers, including the Wexford People, New Ross Standard, Enniscorthy Echo and Gorey Guardian, as well as two free newspapers. Mr. O'Brien's ability to shape the news in Ireland is massive as he controls 40% of it. How in God's name can that be healthy for democracy?

Last week in this Chamber, I had the audacity to criticise some aspects of how Independent News & Media operates. I highlighted the fact that it had obtained a bailout of €138 million from the banks, of which almost €16 million fell on the Irish taxpayer. When I was walking out of the Chamber, a Deputy said to me: "Are you mad criticising the Independent? They'll get you." Anyone who was dumb enough to buy The Star yesterday - my life is too short to be reading such rag mags - will discover that they made an effort at getting me. They highlighted the fact that I was going to cost the State money. They did not highlight the fact that I had planning permission for 28 own-door units on that site, which have been sold for less than €20,000 each. If the bank had worked with me, it would not have cost them a fraction of what it is going to cost them now. There is no logic to what has happened. Similarly, there has been no logic to banks selling over 20 of my apartments at a time, which are going to investors for less than half what I could build them for tomorrow. It is also less than half of what the public can buy them for individually. This has a lot to do with rising rents in Dublin. I stressed this matter with the Minister at Question Time this morning. More and more apartments and houses for rent in Dublin are in the control of fewer and fewer people. That is because investors and speculators have bought up huge numbers of them at seriously reduced rates.

One pays a price by daring to challenge these people. I will cite an example from the Minister's area of responsibility. George Monbiot wrote an article about the Transatlantic Trade and Investment Partnership, TTIP, in The Guardian- which is a newspaper we can only aspire to here - under the headline "This US trade deal is a full frontal assault on democracy". Mr. Monbiot wrote that "The purpose of the Transatlantic Trade and Investment Partnership is to remove the regulatory differences between the US and European nations". He also said the TTIP would grant the ability to "big business to sue the living daylights out of governments which try to defend their citizens. It would allow a secretive panel of corporate lawyers to overrule the will of parliament and destroy our legal protections. Yet the defenders of our sovereignty say nothing." I find it incredible how little coverage there has been of the TTIP in Irish mainstream media. Irrespective of what postilion the Minister or I take, I find it frightening that it is not even being discussed one way or the other. That is really disappointing.

Let us take Shannon Airport. Margaretta D'Arcy went to prison for going on the runway and highlighting the fact that the US military still uses our airport to carry out terrible atrocities in other lands. The State washes its hands of it but so does the media; they are not interested. Margaretta D'Arcy has to go on the runway to highlight the fact that terrible things are happening. Almost 500,000 people have died in Iraq and we are part of it; we have facilitated it.

A UN International Panel on Climate Change reported recently and it was very interesting what it came up with. In fairness to The Irish Times, Frank McDonald gave it good coverage. However, that paper and others are not covering the fact that our Government is going in the opposite direction to what the UN international panel on climate change is saying. We are not interested in this area.

A man telephoned me just after lunchtime today and told me that he went on the Irish Independent website to correct the fact that I was not here for questions yesterday. A number of Deputies were ridiculed in the media for not attending the House for questions. It was an unusual day because our questions came up more quickly than usual as three or four people were missing. Most of the Deputies, from all sides, who were missing for questions were at committees at the time. I was at the Joint Committee on Jobs, Enterprise and Innovation asking Mr. Richie Boucher some questions on banking for SMEs. I actually did come into the Chamber because the questions came around a second time. Therefore, I was here for my question and the Leas-Cheann Comhairle can verify that.

The man in question went on the Independentwebsite to clarify the fact that I did get here for my question, but they would not allow it and took it down.

The same gentleman e-mailed me some material about Irish Water and the privatisation of water services. He sent me a copy of a letter that was sent to a Greek Minister by Commissioner Olli Rehn's office. It stated:

As you know, privatisation of public companies contributes to the reduction of public debt, as well as to the reduction of subsidies, other transfers or state guarantees to state-owned enterprises. It also has the potential of increasing the efficiency of companies and, by extension, the competitiveness of the economy as a whole, while attracting foreign direct investment.
The Corporate Europe Observatory is a well respected body in Europe. It got hold of the above letter and sought to highlight the fact that the privatisation of water is being challenged in many quarters. It published the following:
The European Commission is deliberately promoting privatization of water services as one of the conditions being imposed as part of bailouts, it has acknowledged in a letter to civil society groups. EU Commissioner Olli Rehn's directorate was responding to questions posed in an open letter concerning the European Commission's role in imposing privatisation through the Troika in Greece, Portugal and other countries. The civil society groups have today written to Commissioner Rehn to demand that he "refrains from any further pressure to impose water privatisation conditionalities".

The Commission's push for privatisation goes against the growing trend in Europe and around the world which has seen water privatisation fail to deliver. Paris and many other cities have recently remunicipalised their water services due to negative experiences with privatisation. The Dutch government in 2004 passed a law banning private sector provision of water supply and the Italian Constitutional Court ruled that any future legislation attempting to privatise public services would be unconstitutional.

The Commission has not put forward any evidence to back its stance in its reply, even though research shows that public provision is often more effective than private. It also violates key articles of the EU Treaty which state that the EU should be neutral on the question of water ownership.
The gentleman to whom I referred earlier also tried to put that material on the Irish Independentwebsite, but it was not allowed either. That is called "control of the news". If one dares to raise one's head above the parapet to challenge the establishment, one can expect to be kicked around by Independent News and Media, which is very powerful. If asked whether the Taoiseach or Mr. Denis O'Brien had the most power in Ireland, most people would say it was my good friend Denis. It should not be like that. The Government should rein him in.

A healthy, independent media would mean so much to this country. It could do so much to improve how our society works. The State should help to fund the media to allow it to be more independent.

2:25 pm

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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I am grateful for the opportunity to contribute to the debate on the Competition and Consumer Protection Bill 2014. The Bill has three main purposes. The first is to amalgamate the National Consumer Agency and the Competition Authority as part of the Government's programme of rationalisation of State agencies. While it probably makes sense to amalgamate the bodies given that they are both directed to protect consumers, people who have experience of the Competition Authority and its lack of action on serious competition issues across the State will question placing the National Consumer Agency with it. The Competition Authority has completely failed to act to improve competition. I speak in the context of the operation of cartels in the concrete industry and the difficulties that have arisen in that regard. I have read reports that show that the lack of competition in the market could be costing the State approximately €2 billion a year. When we are talking about continuing and increasing austerity, €2 billion is a huge sum. It could be gained for the State if it had a Competition Authority with real teeth and the resources to act on behalf of the State and citizens. The Minister said the new competition and consumer protection commission will be a powerful body with real teeth acting to protect and vindicate consumers' rights. I wonder. While time will tell, the history of the Competition Authority suggests we will be sadly disappointed.

By amalgamating the National Consumer Agency with the authority we are increasing the workload but I do not see a corresponding commitment to providing the resources necessary for the new agency to act on behalf of citizens to ensure that there is fair competition and treatment of consumers. It is a sad lack. As has been said many times in the House, we are great at making regulations and passing laws, but we do very little if anything when it comes to enforcing them. If we only enforced half the laws we have, Ireland would be a much better country for people to build their lives in.

The second aim of the Bill is to implement the recommendations of the advisory group on media mergers. Deputy Wallace has clearly outlined the difficulties within the media in the State. There is little that needs to be added to what he said. While it is perhaps not a matter for the Bill, I have a particular problem. The legislation provides that media mergers should have a new emphasis on media plurality to provide diversity of ownership and content. Would such content include home-produced content? Is that something that could be provided for in the context of media mergers? It is stark to see that only 7% of content broadcast by national media is domestically produced. In France and Canada, where there is very strong legislation, adequate levels of domestically produced content must be produced by national media. Strong industries accompany the legislation in those countries. It may be a matter for another Bill but it is something at which the Government should look. Given his responsibility for jobs, I draw to the attention of the Minister the potential in this regard for growing and developing the cultural sector and creative industries across the State. It is something that could have a huge impact.

The final aim of the Bill is to make provisions on grocery goods and to regulate the operation of the relationship between large multiples and wholesalers on the one hand and producers and consumers on the other. I am a member of the Joint Committee on Agriculture, Food and the Marine which produced a report last year which the Minister referenced in his opening remarks. We called in the report for the introduction of a statutory code of conduct in the groceries sector. During our hearings, we were lucky to have all the multiples with the exceptions of Dunnes Stores come to the committee to give evidence of their views on a code of conduct and whether it should be statutory or voluntary. It will be no surprise to anybody that they wanted a voluntary code. They said that in any event they were totally compliant with all current legislation and that nothing ever went wrong within the groceries sector. Therefore, they concluded that there was no need for a statutory code at all, which is interesting in itself.

We heard contributions from Tesco, the Musgrave Group, Aldi, Lidl and Retail Ireland. It was interesting to hear them all say practically the same thing word for word. It was a rehearsed script the whole way through. I must give credit to the representatives from Aldi who said when they were questioned that they would be happy to comply with whatever code was introduced, whether statutory or not, although their preference was for a voluntary code. They were the only people to say that. It was also interesting during the hearings to hear representatives to say when pushed that their reason for not having a statutory code was that it would place astronomical costs on them in compliance terms. These huge costs would have to be transferred to the consumer.

In Europe the Commission has decided on a voluntary code after examining codes of practice. In the UK the position of Groceries Code Adjudicator, or supermarket ombudsman, has been established. The original report here was published in 2009. One would think they would have worked out the cost of complying with a statutory code but no one could indicate how much it would cost them, or even provide a ballpark figure. It is a facade and an attempt to delay the regulation. It was very interesting to see them trying to stall it.

I was concerned when I read the Bill and saw the Minister had opted for regulation and statutory instrument. The list of provisions to be made through statutory instrument to regulate the relationship between grocers and their suppliers is long. We had hoped for, and the committee had recommended, a statutory code. The Bill states the Minister may if it is appropriate include provisions and the Minister may introduce regulations. This is of concern because we have seen such provisions contained in previous legislation - the Education for Persons with Special Educational Needs, EPSEN, Act is the most stark example, but years later nothing has happened. I am concerned these sections may not be enacted.

Last week the committee was briefed by departmental officials on how this would operate and we were reassured. In his speech the Minister emphasised regulations are in the process of being drafted and will be introduced as quickly as possible after the legislation is passed. This is good, but I imagine once the legislation is passed, the retail sector and large multiples will intensively lobby to water down the proposals in the statutory instrument and delay the enactment of various sections which will allow this to happen. The Government must resist this on behalf of consumers and on behalf of the small and medium enterprises throughout the State which are dependent on a fair contract and relationship with the companies they supply.

I do not believe this legislation will add €1 or one cent to anyone's shopping bill. If it costs large multiples with turnovers of up to €1 billion a year €5 million to comply with the Government's code of practice or the regulations, it is a small drop in the ocean compared with their overall income and profitability. It is scaremongering and the Government must resist it to ensure regulations are introduced which provide for a proper and fair relationship to develop between suppliers and grocers.

This always comes back to whether it will be enforced, and this is the big question which hangs over all legislation. We discuss all types of well-intentioned laws which are timely, needed and will set things right. I hope in a few years time we will not be sitting here wondering what happened with regard to the regulations, whether inspections are taking place, whether the new agency is examining compliance and whether cases of non-compliance are being brought to court, not simply to punish people but to change practices and behaviour. We need to be able to state such practices and behaviour have been ruled out once and for all. It is only through proper and rigorous enforcement of the regulations that this can take place.

2:35 pm

Photo of Seán KyneSeán Kyne (Galway West, Fine Gael)
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The Competition and Consumer Protection Bill has been most eagerly awaited. The necessity of the change has been impacted by the economic changes which have taken place in Ireland since the 1980s when markets were liberalised and opened up with the completion of the Single Market. Many of the provisions of the Bill are commitments which can be found in the programme for Government and the Action Plan for Jobs.

At individual level, consumers are at a total disadvantage when it comes to the balance of power. Even when acting together, a considerable critical mass of consumers is required before the balance of power tips in their favour. Information is imperative to assist consumers. A strong advocate to act on behalf of the interests of consumers collectively is also essential. The current framework has not been adequate.

It has been a source of irony how elements of competition law have negatively impacted on consumers. An example is telecommunications in Ireland, with particular reference to Eircom. The objective behind privatising Eircom was to comply with EU competition law and to provide consumers with greater choice. It was also assumed the private sector would provide the finance necessary for investment in services such as broadband. We now know the privatisation of Eircom has not worked out well. The inclusion of the entire communications network, along with the company, in the sale continues to impact negatively on communities throughout the country 15 years later. The coinciding of Eircom's private ownership with the property boom took away focus from investment onto the profitable sale of the company's property assets. With the recession, the company was unable to provide the investment required for improvements to the network and it was only last year the company was able to launch the eFibre broadband programme for areas outside the main cities. Added to this were the restrictions placed on the company from aggressively competing until its market share had fallen below a specific percentage.

If all consumers, including householders and businesses, had access to the same number of service providers and the same level of choice and service, this would not have been a problem. However, the fact is that hundreds of thousands of consumers have been negatively affected by the evolution of the telecommunications market in Ireland. Particularly affected have been consumers in rural towns, villages and areas where the main broadband competitors such as UPC and UTV were not, and are not, available. A process that was supposed to provide greater choice, better service and more competition did nothing. Rather, consumers became victims of competition. They were supposed to be the beneficiaries but instead ended up the casualties of laws and actions, at EU and national level, intended to improve consumer choice and service. The Bill is an opportunity to learn from the mistakes of the recent past and ensure we have an organisation in the competition and consumer protection commission which is able to raise issues such as this, publicise them, act on behalf of consumers and play an important role in finding and implementing solutions or advocating changes to legislation.

Another interface between competition law and service provision to consumers is state aid. In the Single Market state aid is eyed with suspicion and is deemed incompatible with the Common Market and a threat to competition. Once again, however, this view ignores the realities of a country with a population density such as ours. It is undeniable that certain services just would not be provided without the support of the State. In the early decades of the State, the provision of electricity, public transport, health care and telecommunications occurred because of State support and intervention. While the situation has changed in many sectors, there remain some services, such as the provision of high speed broadband in rural areas or the provision of transport services such as air and ferry to our islands, which require and rightly receive state aid.

The national broadband plan stated the service would be put out to tender and broadband would be provided to the most remote and rural areas, but unfortunately the service has been very poor. In the new mapping which is taking place, we must ensure state aid is allowed to provide support for the most rural areas where the market will not provide such support. This is being examined and the Government is in discussions with the European Commission.

I do not view financial savings as the sole rationale for merging the Competition Authority and the National Consumer Agency. Rather, I believe the purpose is to create a stronger organisation to provide competition and champion the rights and interests of consumers. This should apply to consumers irrespective of where they reside and should take into account how actions and policies concerning competition can have different effects on different locations.

Consumer rights and health competition are inextricably linked. I agree with the suggestion in this Bill's regulatory impact analysis that the newly merged body will be stronger and more co-ordinated and will have benefits for the consumer.

This Bill is also necessary because aspects of existing competition law have proven to be inadequate. The groceries order, which was introduced in 1956, was further strengthened in the late 1980s following the collapse of the H Williams chain of supermarkets. Among its provisions was a ban on below-cost selling of food and alcohol. The order was the subject of much debate and controversy before it was removed by the Competition (Amendment) Act 2006. There remains a ban on below-cost selling of food, however, by virtue of the Competition Act 2002. This will seem perplexing to many people, given that large supermarkets were able to sell Irish-grown vegetables at a fraction of their true cost before Christmas 2013.

Retailers, particularly those known as the multiples, drive down the price of fresh food at the expense of producers. We know that Irish farmers receive a fraction of the price that is paid for food, with milk being a prime example. There is a clear dominance and imbalance of power in the relationships in the grocery sector. The Joint Committee on Agriculture, Food and the Marine argued in its recent report on the grocery goods sector for the introduction of a statutory code of conduct for the sector, with an independent supermarket ombudsman. I appreciate the rationale for this. However, the Bill before the House proposes instead to empower the Minister to make regulations on certain aspects of commercial relationships. I hope the Minister will not be slow to introduce such regulations.

Legislation like the Bill we are considering, is important for the food industry, producers and retailers. The responsibility of consumers to be aware and informed is equally important. If they ask questions about the origin of food, the production of food and the proportion of the price being paid to producers, and make informed decisions on that basis, large retailers will have to take note. The effect of consumer power can be seen clearly in the case of the discount retailers. The wishes of Irish consumers to purchase quality food products that are locally sourced or produced has led to Aldi and Lidl changing their business practices in Ireland and in other European countries. Other supermarkets have recognised this by augmenting and increasing their support for Irish producers as a result of the increased competition in the sector.

Media mergers are also addressed in this Bill. Media ownership has been an issue since the first newspapers rolled off the printing presses. This issue has evolved distinctly in different countries. For example, public service broadcasting in Europe is different from such broadcasting in the US. On this side of the Atlantic, public service broadcasters such as the BBC have been viewed as integral parts of modern society. Raidió Teilifís Éireann played a significant role in building our nation. It was important for Ireland to have its own radio station and television service.

Just as the organisation of the groceries sector and the provision of food have changed since the late 1980s, so too has the media sector. The introduction of independent local radio stations has brought about a welcome plurality. All businesses go through stages of start-up, growth, expansion, consolidation and maturity. Media businesses, whether in print or in broadcasting, are no different. The economic uncertainty of the past five or six years and the changing business models have accelerated consolidation. Newspapers have merged and radio stations have been acquired. The issue of media ownership has grown in significance in tandem with this. The effects of the concentration of ownership in the hands of very few people have the potential to be highly negative.

This Bill is not about controlling the media or about censorship. It is about ensuring fairness, transparency and equality, all of which are essential ingredients for a democracy. The growth of social media, facilitated by the Internet, has also been revolutionary. It has broken down entry barriers, encouraged and opened participation and lessened the power of old media. The task of regulating and providing oversight in the common good is becoming increasingly complicated. It is not something that many governments have been able to grapple with successfully. It is startling that 21 EU member states have no special rules for media mergers. Ireland is leading the pack on this issue. I hope the legislative process can be better at keeping pace with the changing communications landscape.

The proposed competition and consumer protection commission has been described by the Minister, Deputy Bruton, as "a powerful watchdog with real teeth acting to protect and vindicate consumers". The Minister has indicated that a new criminal investigations function will be added to combat white collar crime. Only time will tell if this comes to pass. I hope it does because it would ultimately be to the benefit of everyone in the community.

2:45 pm

Photo of James BannonJames Bannon (Longford-Westmeath, Fine Gael)
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I acknowledge the presence of the Minister for Jobs, Enterprise and Innovation. I thank him for being in the Chamber for this debate. These debates are often left to Ministers of State. The Minister, Deputy Bruton, is always in the Chamber for debates on legislation relating to his portfolio. That is very welcome. This Bill is the latest effort to balance consumer protection with competition. It shines a light on the debate over whether large retailers bully their suppliers. Those of us who live in rural Ireland pride ourselves on our local grocers and corner shops. We trust them to deliver a better product than the faceless supermarket chains. I regret to say that the local corner shop is slowly ebbing away as the supermarket sector monopolises the market.

The people have continually driven forward, as it were, since the crash in 2008. We have worked hard over the past six years to get to where we are. This country is now creating more than 1,000 jobs a week, rather than haemorrhaging them by the day. According to the ESRI, this country has one of the highest predicted growth rates in Europe at present. I believe no other country could have done what Ireland has done. I attribute this to a unique feature in Irish society, namely, our sense of community, which has driven us forward. People throughout the country have worked tirelessly to get Ireland back on track, not because Germany told them to do so, but for the sake of their neighbours across the road and their local grocers on the main street. Local communities have been and are fighting to keep their towns and villages alive. It is disheartening that the heart has been taken out of the main streets of many towns in rural Ireland as a result of the development of supermarkets on the outskirts of those towns.

I refer to my local county town, Longford, in this context. I took the time in recent days to count how many establishments or outlets in the town have closed in recent years. I found that 63 outlets have closed, one third of which were grocery shops at one time. The local grocer is essential to communities and must be helped and supported. The same thing can be said of the local post office. Indeed, they are often one and the same. Big grocery retailers are making massive profits in Ireland. One of the main reasons for this is their dominance over smaller suppliers. Small suppliers invest locally, whereas the large supermarket chains that make these massive profits invest outside of Ireland.

Before Christmas, farmers protested throughout the country against the below-cost selling of vegetables, a practice which is more commonly known as "loss leading". Farmers gathered in protest outside big chain supermarkets throughout the country and outlined their demands for change, signalling a warning to the Government to act to protect their interests. By selling below cost, the big retailers drive down the prices paid to growers. This issue needs to be monitored and addressed by the Government. I suggest that this sort of behaviour is driving many young farmers off the land.

The practice of looking for "hello money", whereby payments are levied by retailers on suppliers to get onto their shelves, is now outlawed. The big retailers have found ways to get around this ban, however. Many of the marketing charges and promotional fees levied by retailers to cover the cost of price cuts are seen as a new form of "hello money" by another name. The Bill before the House will regulate the grocery sector and ensure there is fairness between suppliers, retailers and consumers on issues such as contracts and the delivery of goods. New legal requirements for record-keeping and the inclusion of certain terms in written contracts, together with strong enforcement powers, would ensure fairness and sustainability in this sector.

The Bill will create a new, powerful watchdog that has the strength effectively to protect the Irish consumer. The National Consumer Agency and the Competition Authority will be merged to create the competition and consumer protection commission, as outlined in the programme for Government in 2011. The Minister and his Department have been working tirelessly since then to bring the Bill to fruition. The new watchdog will be given criminal investigation functions to combat serious white collar crime and ultimately combat higher prices and protect consumers. It will have a full 360 degree perspective on consumer markets in Ireland, allowing it to strengthen further the environment for consumers.

Anti-competitive practices are damaging both to consumers and the wider economy. The ultimate aim of the new body will be to ensure open and competitive markets where consumers are protected and empowered and businesses can actively compete. The newly merged body will result in savings of €170,000 annually. Its establishment is another aspect of the Government's fulfilment of its role to protect citizens' rights. It is important that large retailers are not allowed to cheat consumers out of those rights.

2:55 pm

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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I welcome the publication of this important Bill. Members of this House are particularly well served by the Oireachtas Library, and its staff have excelled themselves on this occasion. Their Bill digest has been of great assistance to us in providing background information.

The Bill has three main functions, namely, the amalgamation of two existing agencies into the new competition and consumer protection commission, whose abbreviation, CCPC, makes it sound like the old Russian Communist Party; regulations regarding the groceries order; and the issue of media mergers. The initial work on these provisions began under the former Tánaiste and Minister for Enterprise, Trade and Employment, Mary Coughlan. The legislation will bring Ireland into tandem with most European economies. Indeed, our neighbours in the United Kingdom launched their merged body on 1 April.

I have concerns in regard to some aspects of the Bill, which I hope the Minister will address in his response. The provisions of section 18 allow the Minister for Jobs, Enterprise and Innovation of the day to direct the CCPC in regard to Government policy and its implications. This raises concerns regarding the ability of the new body to do its job independently in a context where the Government is a major consumer and driver of costs in the State. We cannot have a situation where a Minister might use or abuse these provisions. I do not expect that to happen under this Administration, but if the relevant powers are vague enough, a future Minister might use the provision to stymie the CCPC's independence. It is an issue that needs to be clarified.

On the consumer protection side of things, it is difficult in this time of great change, technologically and economically, for people to keep abreast of consumer rights. Likewise, it is difficult for agencies charged with safeguarding those rights to advise customers. We as consumers are often not fully aware of our rights until we need to call on them, by which time it may be too late. The new agency must be properly resourced to get information across to people. Moreover, it probably needs to do so in a shock tactic type of way given that large companies have many multiples of the promotional and other resources that will be available to this agency at any stage in its ownership. There needs to be some type of level playing pitch to equip and guard consumers in terms of their rights. One of the drivers of this merger was reform of agencies and cost control but, in pursuing those ends, we must ensure we do not damage the ability of the consumer side of the CCPC to keep people fully informed of their rights and obligations.

In regard to the competition side of its remit, we need an agency with teeth and the ability to call out any large organisation or sector within the economy where anti-competitive practices are occurring. If it is to have teeth, the legal protection given to the new body in the legislation must be enforced properly. It requires the powers set out in this Bill and in the 2012 Act to be properly understood. There is no sense in enshrining the types of powers set out in this Bill in law unless we train members of the Judiciary in those powers. We must have people on the Bench who fully understand the consequences and import of these provisions and their potential to assist consumers and smaller companies. It is essential that the Commercial Court is fully resourced and we have a cadre of judges within it who have the ability to implement the powers outlined in this Bill.

On the question of naming and shaming, we must bring the surveys formerly conducted by the National Consumer Agency back into frame in order that consumers can be consulted. Even though the Bill has been in gestation for a long time, the public consultation phase needs to be slightly more robust than it has been. Perhaps in the course of the coming weeks a debate can be initiated to ensure people are aware of what is happening.

An important question is what type of budget the new agency will have. In a situation where two authorities with very different specialties are being merged, there needs to be a robust budgetary process internally that ensures all the functions of the agency are properly resourced. It is important, for example, that the consumer side should get the same types of resources as the competition side. The latter will require a great deal of legal support, which brings me on to the issue of the failure of the Government to tackle legal costs. Nothing is being done to tackle that issue in the Legal Services Regulation Bill. As long as those costs remain as high as they are, it is even more important that the competition side of the new agency is adequately resourced.

In regard to the groceries order, I am concerned at the vagueness in the Bill in terms of the regulations and statutory code. The plan is to give the Minister powers to implement a statutory code and regulations, and we have been given an idea of what those regulations might be. It is unfair, however, to ask the House to debate this Bill without seeing those regulations in advance. There cannot be a proper regulatory impact assessment without having effective regulations in place. While the Minister has given a flavour of what they will be, we really need to see and study them. Perhaps he will indicate whether we might see a copy of them before Committee Stage. There is also cause for concern in the provision that the Minister will have the power under the Bill to introduce new regulations as the process goes along, rather than introducing them all in the context of the Bill. He should at least give us an analysis at this stage as to what types of regulations we can expect.

Deputy James Bannon referred to the utterly unfair playing field that pertains in the grocery market. There is a push on at this time to encourage small and artisan producers in a context where people are increasingly interested in sourcing their food locally. At the same time, however, the large retailers seem continually to be increasing their control and using their commercial prowess to that end. It seems a case of never the twain shall meet, and this Bill does not offer much enlightenment as to how we can protect smaller operators. Businesses worth €50 million plus will be subject to the Bill's provisions, but what about those in the middle, such as the distributors who bring the smaller producer into the larger chain? We need clarity in that regard.

I see the Chairman of the Joint Committee on Agriculture, Food and the Marine, Deputy Andrew Doyle, is in the Chamber. That committee has published a very useful report on unfair pricing practices.

The notion of vegetables being sold for 6 cent, 7 cent or 8 cent does not make sense from either a commercial or a social point of view. We are all aware of that. This type of below-cost selling is going to result in food production in this country being concentrated in the hands of very big operators. Once again, the small guy will lose out. This cannot be encouraged. The legislation before the House must be the first step in preventing that from happening. It must also act as the first line of defence for small producers and allow them to stand up to the larger operators.

In the previous Dáil, the then Joint Committee on Enterprise, Trade and Employment examined the grocery market over a period of years. It held hearings on the matter and published a great deal of material on the cost prices relating to food and drink. Such prices are higher in Ireland than in other economies. The prices charged here by multiples which serve other economies are higher and those companies seem to make larger profits here. We would be able to obtain a definitive picture in this regard if we could obtain sight of the profits of such companies but we cannot do so because they jealously protect information relating to the amounts of money they make in the Irish consumer market. These prices are charged by the multiples in respect of a range of goods - such as the basic foodstuffs - which people need on a daily basis. It appears that the companies garner much higher profits in this jurisdiction than they do elsewhere.

One of the worst aspects in this regard is that many of the large grocery multiples use alcohol as a magnet to attract people. They entice people to enter their shops by using cheap or, in many instances, below-cost alcohol and then oblige them to pay higher prices than those charged in other markets in respect of basic foodstuffs and commodities. There is a serious problem in this country in the context of alcohol consumption. The one issue we continually dodge and refuse to debate is the role played by large supermarket multiples, particularly in respect of the way in which they use alcohol as a price attractor. Large quantities of alcohol are being sold with very few controls in place. The consumption of such alcohol is giving rise to all sorts of issues relating to antisocial behaviour and vintners and everyone other than those in the sector to which I refer are blamed for this. In the context of public health and competition law, the use of alcohol as both a loss leader and a magnet by means of which to attract people to enter shops before fleecing them when they purchase basic foodstuffs, etc., must be brought to an end. Provision to facilitate this must be made in code of practice and ministerial regulations that are to be introduced.

I must admit that I become nervous when reference is made to statutory codes of practice because they give rise to additional costs and make matters very difficult for small businesses. However, we have faffed about for long enough in respect of the grocery sector. There appears to be an unwillingness to take on that sector. The Bill before the House presents us with an opportunity to do so. I hope the Minister will seize that opportunity. Those in the sector do not respect voluntary codes of practice and tend to ride roughshod over them. I am of the view that a debate is required on this matter.

I will now deal with the issue of media mergers. In that context, our thoughts are with the staff of Landmark Media which publishes the Irish Examinerand many other newspapers and which launched a redundancy programme today. This announcement again shows the vulnerability of our domestic media outlets, particularly at a time of such change with in the media market. The Minister for Communications, Energy and Natural Resources has taken responsibility for this matter and will have the ultimate say - following a review carried out by the new CCPC with regard to any potential media mergers. Will the Minister opposite, Deputy Bruton, either when replying to this debate or on Committee Stage, outline what that process will involve? Will he indicate the kind of issues the new CCPC will examine? What controls will be imposed on the relevant Minister in terms of his or her ability to make decisions on these kind of matters? What support will be given to the Minister of the day? Will there be a court of appeal? These issues are probably dealt with in the legislation but I would appreciate it if the Minister, Deputy Bruton, could outline the position in brief.

The Bill does not focus on the location of the major cost drivers within the economy at present. We debated this matter on Question Time yesterday, which, contrary to what people might have read in this mornings newspapers, did take place. It is evident that the big drivers in terms of costs for businesses are emanating from the State. One such driver is the cost of health insurance. Increases in this regard have been driven by tax increases which were introduced in the most recent budget and which affected 90% of policies. Health insurance companies are continually increasing premia and they state that in doing so they are - in their view - responding to health policy. There is also the fact that costs relating to utilities and electricity are the sixth and seventh highest in the eurozone, depending on whether one's enterprise is an SME or a larger operation. Will the Minister indicate the impact the Bill is going to have on utility costs? Costs relating to waste in Ireland are considerably more than those in competitor EU member states.

It is quite ironic that we are debating the Bill on the day on which the Government is tearing itself apart in respect of the biggest monopoly of them all - Irish Water. There is going to be no competition at all in respect of water. Will the Bill before the House provide protection for citizens who might encounter difficulties in their dealings with Irish Water? In view of the kind of resources available to that company, will the Minister outline the robust role the new organisation - the CCPC - will be given in terms of taking it on?

Another issue which arises relates to rulings handed down by the Competition Authority in the past with regard to how people in various professions can organise themselves. I am aware that a court case is pending in respect of how GPs can organise themselves in order to lobby on their own behalf and obtain basic rights for themselves. I know that the Minister is not permitted to comment on the matter but during the course of this Bill's passage through the Houses, a verdict should be handed down in that case. It is quite unusual for an organ of State to use competition law against an organisation which seeks to represent the collective interests of its members in the context of their terms and conditions. A small cohort of organisations representing GPs, pharmacists and even actors is affected by what is happening in this regard. It strikes me that, in the context of this Bill, the Minister will have an opportunity to address that matter and grant people their rights in the context of freedom to negotiate and bargain. Perhaps he might give some consideration to this issue.

There is already in place a robust body of competition law. There are many elements within the Bill which will enhance that. I wish to pay tribute to the two organisations which are being merged. Both the Competition Authority and the National Consumer Agency struggled over the years but they did some good work in difficult circumstances. If the new body into which they will be merged is to work, I reiterate that it must be independent of Government. The new body must be able to call out the Government, which is the biggest driver of costs and one of the largest consumers in the State. It must have the legal power and the powers of enforcement required to take on the multiples and also large corporations of any ilk in any sector who run roughshod over consumer rights and who treat those consumers as a necessary evil as opposed to being essential to their interests.

We must use the Bill to inform the large multiples, particularly those which operate in the grocery sector, that they do not run the country. They must also be told that they are valued employers but that their operations must be regulated. At present, these companies appear to be able to do as they like in respect of producers, communities - particularly small, rural ones - and independent retailers. We must be in a position to use the Bill to ensure that we will have a healthy media sector that will be diverse in terms of both content and ownership. In light of this country's literary tradition, it would be ridiculous if, as a result of developments in the media market and technology, voices were concentrated in one area and focused in one direction and if those with literary talent were prevented from having outlets for their work.

I welcome the Bill but there are aspects of it which the Minister must clarify, particularly those relating to the groceries order. As stated earlier, the provisions of section 18 will allow the Minister for Jobs, Enterprise and Innovation of the day and the Government to direct the CCPC. Will the Minister outline the exact position in that regard? I look forward to his reply.

3:05 pm

Photo of Marcella Corcoran KennedyMarcella Corcoran Kennedy (Laois-Offaly, Fine Gael)
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I now call Deputy Doyle. I understand he is sharing time with Deputy Harrington. Is that agreed? Agreed.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I welcome the introduction of the Competition and Consumer Protection Bill and I commend the Minister on the work he has done in respect of it. The Bill has been quite some time in gestation and I understand that certain difficulties and challenges arose in the context of dealing with the technical aspects relating to it. None the less, the Bill, which was placed on the A list at the start of last year's autumn session, is now before the House. Five years ago Deputy Creed and I published the Food (Fair Trade and Information) Bill, which specifically dealt with the grocery sector. I am glad that the Bill before the House incorporates many of the guiding principles contained in our legislation.

The Joint Committee on Agriculture, Food and the Marine produced a report last October entitled Report on the Grocery Goods Sector: Increasing equity and transparency in producer-processor-retailer relationships. I commend my fellow committee colleagues for their support and input into the drafting of that report and those who came before the committee to offer testimony. Not all of them would agree with our conclusions but at least they showed up, unlike one of our large domestic multiples, Dunnes Stores, which decided to ignore an invitation and that was a pity. None the less, the committee recommended a statutory code with an adjudicator or ombudsman. It was envisaged that this office would not be created at any cost and that it would be contained within the merged entity which is now going to be called the competition and consumer protection commission.

As Deputy Pringle noted earlier, the Joint Committee on Agriculture, Food and the Marine had some concerns about the general thrust of this legislation, in particular the fact that everything was being done by regulation. We received a briefing from the officials - I thank the Minister and his officials for that briefing - and we are satisfied that this is, in fact, a stronger and more enforceable methodology to ensure that the objectives of the Bill are carried through.

The Bill sets out that all relevant undertakings in the grocery food sector should be guided by regulation. The list is extensive although not exhaustive. The Minister and his officials made it clear that because the circumstances can move or be fluid, there was a necessity to ensure that the regulations could be nimble and that they could be amended easily to reflect any changes. The position is similar to when budget measures are introduced and people find loopholes. The recommendation was that a corresponding ability should be incorporated into the regulations and the Act.

I welcome that the formal contract must be in writing, as must the circumstances or reason why it is being terminated, varied or renewed. The circumstances under which a contract of a supplier of goods may be varied must be in writing. There are further arrangements regarding promotion of the grocery sector, including arrangements for the preparation of annual compliance reports in respect of these regulations by relevant grocery goods undertakings and the submission of the reports to the competition and consumer protection commission, CCPC, as well as provision for the maintenance of records relating to the compliance activities for the period for which those records are to be held. These are all welcome measures. They will ensure once the new commission is established, the legislation is passed and the regulations are signed that there will be powers of compellability and criminal sanction given to the new CCPC. This is important in spite of some of the protestations of the major multiples and Retail Ireland to the effect that this would add costs ultimately to the consumer.

Last week, I attended another meeting to do with general practitioners in which a well-known media financial consultant said we were doing it all in the interests of saving €170,000, a rather unfortunate observation from someone who proclaims to be an expert. He suggested that we were simply going through the motions of merging two agencies to save €170,000. That is not the purpose. The individual decided that he would advocate that position in the full knowledge that few people in the room actually understood what was going on because they had their own issues to deal with.

Deputy Calleary and others referenced minimum pricing of alcohol. A working group is deliberating on the minimum price per unit of alcohol and this is to be welcomed. I suggest that the regulations should include a requirement that alcohol should not be used for marketing or promotion, whether it is below-cost or over-cost.

Fully 80% of our groceries are sold through the big five multiples and probably a similar percentage of our alcohol off-licence sales are sold through the outlets with 80% of the market. Our off-licences which, in the main, do not sell anything else, account for the remaining 20%. There are also some sales in filling stations, etc. It seems that every weekend newspaper has pricing for various goods that are available in the following week in a given store. Invariably, there will be a price for various carry-out offers for alcohol, whether beer or wine. That is unfortunate because generally they are loss leaders. This should not be allowed in the interests of public health apart from anything else. This, combined with a minimum unit price for alcohol, would be effective and I am keen to hear the Minister's thinking on the matter.

I welcome the fact that the Minister realises the regulations must be made quickly. Although there is a reference to May, I am satisfied that the intention is to bring them in as soon as possible. I understand they are being drafted at the moment. There are different scales. The regulations acknowledge the fact that there is a particular model of retailer, that is, the franchise holder. Some of the franchise holders are as big as some of the comparable stores but others are small, no bigger than the operators that RGDATA represents. Is it possible on Committee Stage or Report Stage to discuss a way of ensuring that these stores are not unduly burdened? I am referring to small operators, perhaps a single entity or stand-alone franchise operated on a small scale. Any support measures from the point of view of compliance to reflect the level of activity and turnover would be welcome. This is something we might usefully discuss.

Deputy Calleary referred to the disclosure of profits. I understand there are various reasons relating to foreign direct investment why one would not be keen for multinationals to disclose their profits but there is a specific group to which this point applies. According to today's newspapers we should almost feel sorry for one of the biggest retailers in the world, whose profits went down from €3.5 billion to €3.3 billion. The company is paying out over 14 cent per share. Perhaps that could be used as the reason why we should not have stronger regulations. It would be helpful to know the extent of profits to level the playing pitch. Small suppliers and producers find it difficult to generate collective bargaining power and they have always had this problem. The new CAP will allow for the formation of co-operatives or producer groups. This is recognised not only at Irish level but at EU level and I am keen to hear the Minister's thoughts on that.

I welcome the fact that the Bill deals with media mergers. It is high time that when media mergers are about to take place the parties notify the relevant Department. I welcome the fact that the Department of Communications, Energy and Natural Resources will have a proactive part in this process.

3:15 pm

Photo of Noel HarringtonNoel Harrington (Cork South West, Fine Gael)
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I welcome the opportunity to speak to the Bill. I welcome the Minister's presence in the Chamber. I welcome the Bill as part of the Government's programme to reform State agencies and to merge those deemed suitable to be merged, leading to better value for the consumer and the taxpayer.

However, it is important that we evaluate what the Bill will do for the consumer.

Consumer protection is defined as a group of laws and organisations designed to ensure the rights of consumers, fair trade competition and the free flow of truthful information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors. They may also provide additional protections for the weak and those unable to take care of themselves. Consumer protection laws are a form of Government regulation that aim to protect the rights of consumers. For example, a Government may require businesses to disclose detailed information about products, particularly where safety or public health is an issue, for example, in the case of food.

Consumer protection is linked to the idea of consumer rights and to the formation of consumer organisations that help consumers to make better choices in the marketplace and to get help with their complaints. Our membership of the EU has improved much of our consumer protection legislation. This Bill has been in the ether for some time, having been announced in the 2009 budget. Since it is highly technical and detailed legislation, it has taken this long to be produced. It must be noted that different forms of competition legislation have evolved and matured.

The Bill addresses three broad areas. First, it amalgamates two agencies. With few exceptions, this move has been met with broad approval from some of the key stakeholders involved in consumer protection and competition. I look forward to reading Mr. Eddie Hobbs’s book some day. It might be interesting, but he has misread this situation as a money-saving exercise. Rather, it is concerned with providing a better and more efficient regulatory competition regime and protection to consumers.

I welcome the Bill’s provisions under which the new commission will play an important role in co-operating with other regulatory authorities, for example, ComReg, the aviation regulatory authorities, the health insurance authorities and others, to provide better services for consumers and citizens and a level playing field for industry leaders and those trying to get involved in the industry.

We already have various pieces of primary legislation. It has been well noted that we are reasonably quick to adapt primary legislation to address new pressures or issues arising in the marketplace that have adversely affected consumers, producers, industry etc. This Bill is a significant milestone in consumer and competition legislation.

Section 4 on media mergers is particularly important. The 50 jobs that will be lost in the Irish Examinerunder Landmark Holdings should be noted. It is a difficult day for those involved, but it highlights one of the issues facing the print media in the modern age, namely, technology that puts the news at almost everyone’s fingertips. Media, particularly print media, is finding it difficult to evolve into something that allows it to maintain its relevance. The response to this challenge seems to be consolidations, acquisitions and mergers and less plurality of ownership and content. This matter must be addressed. We all have different opinions on it, but every Deputy has a significant interest in current affairs. We might believe everything stops and finishes at that. What is happening is not a new phenomenon, but it has gained pace in recent years and should give us cause for concern. We should reflect on how our society can be better served by a media that is more diverse in ownership, points of view, content etc. I am not just referring to public affairs, but also to the niche interests that many of our citizens have come to enjoy. Often, those interests are lost in media mergers and acquisitions and, perversely, people who look to the media for such content find that, in a world where there is better technology and access to information, the quality of that information is sometimes less than appreciated. We require balanced legislation to deal with media consolidations.

I will focus on consumer protection. It is an issue that continuously comes to the fore in a myriad of industries. Deputy Doyle’s agriculture committee produced a fine report on the groceries order. This problem, which has arisen in the past year or two, is addressed in the Bill. I look forward to further discussions on how the consumer can be protected in the long term by provisions such as those outlined herein.

Recently, a household pack of vegetables sold for 5, 6 or 8 cent or whatever the case may have been. While there are short-term gains for the consumer in such practices, they are unsustainable in the medium to long term. They will not work for the consumer. For the producer, they are a disaster. We must provide the new commission with the teeth to investigate how such behaviour affects the marketplace. I support open and fair competition in the marketplace irrespective of which industry is involved, but short-term gains of the type described can be detrimental to the producer, the retailer and the consumer in the long term.

The new commission should investigate the difficulties being experienced by the on and off trades in the drinks industry in terms of the regulatory framework and consumer protection. There is much work to be done in that regard.

As a result of this Bill, I look forward to having a greater level of public naming and shaming of market players who do not conform with the legislation when enacted. Across the water, there is considerable interest in consumer protection programmes on television. They make for riveting viewing and comprise a further element of consumer protection. Including a provision in the Bill on naming and shaming after its enactment would be attractive.

3:25 pm

Photo of Marcella Corcoran KennedyMarcella Corcoran Kennedy (Laois-Offaly, Fine Gael)
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I understand that Deputy Mattie McGrath was to share time with Deputy Healy-Rae. Is the latter taking the full allocation of 20 minutes?

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry South, Independent)
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No. I will just take half of that time, as I am not sure whether Deputy Mattie McGrath will attend.

Photo of Marcella Corcoran KennedyMarcella Corcoran Kennedy (Laois-Offaly, Fine Gael)
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Deputy Healy-Rae has ten minutes.

3:35 pm

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry South, Independent)
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I thank the Technical Group for allocating some of its speaking time to me to speak on this very important Bill. I also thank the Minister and his officials for bringing this major reforming legislation, with its three main objectives, before the House. The structure is modelled on that of the Competition Authority. I hope that when the legislation is passed by the Oireachtas the merging of the National Consumer Agency and the Competition Authority will deliver improvements in competition and create a watchdog with real teeth. It is part of the broader reform agenda within the Department of Jobs, Enterprise and Innovation, which will see the number of agencies reduced by 41 over the coming months. That should be welcomed as it will streamline the agencies by pulling them together and putting them into more workmanlike shape. That is how I view it and I hope it works out that way.

With regard to the three main aspects of the Bill, I will focus on the regulation of certain practices in the grocery goods sector aimed at ensuring balance and fairness between the various players in the sector - the suppliers, retailers and consumers. This is very important. At this point it is only right that I declare what could be classified as an interest in that I am a grocer, albeit a small grocer in a small village. However, as a result of that job or role, I have seen how some of our larger retailers carry on. Some of their behaviour is often questionable. Deputy Harrington correctly referred to what happened a number of months ago in some of the larger retailers when they sold groceries at nonsensical prices. I was glad to join the members of the Irish Farmers' Association, IFA, when they left Leinster House and marched to a store not far from here. We went in and bought vegetables in the store at ridiculous prices. We brought them outside and gave them away to people. We did it to highlight in the media that what the retailers were doing was quite disgraceful.

The people that day were vegetable producers and many of them had come from the midlands and north Kerry. These people grow vegetables and incur the usual increased costs due to the times in which we are living, yet they were watching their absolutely perfect vegetables being sold for virtually nothing. The consumer might have thought they were winning on that day, but ultimately the consumer would lose. Where a system does not allow for a fair price to be paid to the person providing goods to a shop, it will not continue to work. People must receive an honest, fair reward for the goods they sow, produce and sell to shops, including these large retailers. The practice of "hello" money and many other shady practices have been carried out over the years by the large retailers. I would vehemently and wholeheartedly support anything the Minister can do to put checks and balances in place to prevent such behaviour.

One hears about the promotions being conducted by the larger retailers but these can be laid bare and ultimately shown to be not in the interest of the consumer. I have seen that happen repeatedly. Retailers have engaged in price wars just to put other retailers out of business. When they have put the others out of business they ratchet up the price and, to be honest, screw the consumer. That is wrong and I hope this Bill will address it. It would be right and proper for that to happen, as it is increasingly difficult for smaller retailers to survive.

With regard to a code of conduct in the grocery sector, be it statutory or voluntary, I would prefer something rock solid. It should not be a voluntary code but a statutory code that is put in place and seen to have teeth. That would be welcome.

The other matter dealt with by the Bill is the updating and modernising of the laws on the media to take account of international best practices and technological developments. We live in an ever-changing world. If one wishes to see what can happen as a result of modern media, it is fair and honest to point out that without modern media we would probably have a different President of Ireland, with all due respect to the current President and I acknowledge he is doing a great job. However, that is a fact.

I listened earlier to Deputy Wallace's contribution. I wish to set the record straight on one matter. I am no fan of large media conglomerates but I believe it is fair to mention somebody's name, Denis O'Brien, because I am doing so in a positive way and the Deputy did so in a negative way. When I hear his name I do not think first of the wealth he has accumulated for himself but of the jobs he has created, both nationally and internationally. When a person is successful, an employer and a doer, I must admit I would support such a person. It is only right to bring some balance to the record of the Dáil today. While he was cast as somebody who might not be particularly great earlier, I have a different opinion and I am anxious to put that on the record.

That said, I am aware of what the Minister is doing. The man I mentioned, large as his operation might be, is operating within the law, and always will and always has done in his business dealings. However, it is only right that this Bill will ensure that we will not have a situation whereby one person would have undue influence over this country's affairs. We must have modern laws that will ensure we are operating at all times to best national and international practices. It is a very difficult job due to the speed with which the media operate. We have seen in the past how an issue that might not have been portrayed correctly can be released on media outlets in seconds. It could be a big story because it takes off so quickly, but much of the information in it might be incorrect. There is a lot to be said for when the media moved a little slower because when it moved slower, it had a better chance of being factual. However, that is not the world in which we are living today and there is nothing we can do about it.

I support the Minister in trying to ensure that the media are governed in a proper way, while at the same time ensuring nothing is done to stifle them, as we do not want that either. What we want is fairness and transparency. We would also wish that the media would be fair to us. It would helpful if, rather than trying to spin things for much of the time, they would just report factually and not tell blatant lies about people, as has happened in the past.

Hopefully in the world we are living in, where people are a bit more active about standing up for themselves, they might be curtailed on that in the future.

I welcome the Minister bringing the Bill before the House and I thank him and his officials who sometimes do not get thanked for the work they do, but whose role is very important. They put an awful lot of time and effort into bringing a Bill like this before the House. They are not in here today as they are in other offices elsewhere, and I would like to acknowledge their work because it is important that they are appreciated and that we thank them for their efforts.

3:45 pm

Photo of Marcella Corcoran KennedyMarcella Corcoran Kennedy (Laois-Offaly, Fine Gael)
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Deputies Kenny and Penrose are sharing time. You have ten minutes each.

Photo of Seán KennySeán Kenny (Dublin North East, Labour)
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This is a major piece of reforming legislation. It has taken a long time to make it to the House and I am pleased to see it is finally here. I am particularly happy to see that the legislation will deal with the issue of ownership across the media, which is an essential part of a healthy democratic society. The legislation is in keeping with the advisory group in this area, which recommended that the legislation retains the basic model of current media legislation, which is based on the principle of avoiding intervention by government in media ownership except in specific circumstances following procedures determined by law.

However, it is important to modernise these laws to reflect international best practice and in line with the latest technological developments. The legislation will implement in full, with two changes, the 11 recommendations of the advisory group on media mergers, which published the Sreenan report during the lifetime of the previous Government. The broad three-step process that currently exists in respect of media mergers will continue in existence in future. First, there will be a determination by the relevant regulatory authority that a merger has taken place. Second, there will be a decision by the relevant regulatory authority on whether the merger should be permitted to go ahead on competition grounds. Third, assuming the relevant regulatory authority has given the go-ahead, a decision will be made by the Minister on whether the merger should be permitted to go ahead on the grounds of the public interest.

The recommendations of the Sreenan report include the findings that there should be a statutory definition of media plurality, referring both to ownership and content. In addition, the Competition Act 2002 should be amended to incorporate a statutory test to be applied by the Minister in the discharge of his or her function on media mergers and there should be an ongoing collection and periodic publication of information and employment of concrete indicators on media plurality in the State. I think this is very important. The ownership of the media organs active in the State needs to be monitored in order to detect when competition in the media sector might be lessened - or indeed strengthened - with transactions involving media businesses. There should also be a separate system of notification of media mergers made to the Minister for clearance, as well as an obligation imposed by statute on parties to a media merger to provide full information to the Minister on all circumstances which might impair media plurality in the State and to notify any changes in information provided to the Minister, with appropriate penalties for non-compliance. In the event of the Minister deciding to proceed to a detailed investigation of a proposed merger, a three to five person consultative panel should be established on a statutory basis to provide advice to the Minister on the media merger.

I am also very pleased that the Department of Communications, Energy and Natural Resources is taking on these responsibilities from the Department of Jobs, Enterprise and Innovation, as I feel that the former Department is a better fit. As a member of the Joint Oireachtas Committee on Communications, Energy and Natural Resources I will be doing all I can to assist in the passing of the legislation.

There is no provision for an ongoing regulatory function in respect of media ownership, nor did the Sreenan report recommend it. The power is only exercised in the event that a merger takes place as defined, and that merger is permitted to proceed on competition grounds. The key concept in the definition of a merger remains the concept of "effective control", and no changes are recommended or provided for in that context.

The law makes two changes to the recommendations of the Sreenan report: first, that the relevant joint Oireachtas committee will become a notifiable body and second, that the legislation will transfer responsibility for media mergers from the Minister for Jobs, Enterprise and Innovation to the Minister for Communications, Energy and Natural Resources. The definition of "media business" should be amended to include publication of newspapers and periodicals on the Internet and the broadcasting of certain audiovisual material on the Internet. One of the other purposes of the Bill is to strengthen the enforcement of competition law in Ireland by setting up the competition and consumer protection commission. Competition offences are serious white-collar crimes and they must be tackled effectively.

A suite of additional enforcement powers had already been provided to the Competition Authority in 2012 under the Competition (Amendment) Act 2012 and additional staff were also allocated to it to strengthen competition law enforcement in the context of the EU-IMF financial programme for Ireland. The Bill gives additional powers to the new competition and consumer protection commission by extending the provisions of the Criminal Justice Act 2011 and the Communications (Retention of Data) Act 2011 to serious competition law offences. In addition, some elements of the Criminal Justice Act 2007 related to the use of the taped evidence at witness interviews have been incorporated into the powers of the new competition and consumer protection commission.

The Bill also contains provisions to regulate particular commercial relationships between grocery businesses, such as large retailers, suppliers and wholesalers, and related undertakings such as franchises. The Bill provides that the Minister for Jobs, Enterprise and Innovation will have powers to make regulations in respect of certain aspects of the commercial relationships between relevant grocery goods undertakings, and specifies those matters on which the Minister may make such regulations. The regulations will affect relationships between relevant grocery goods undertakings and other grocery goods undertakings. Regulations will only apply to contracts entered into or renewed on or after their date of entry into operation.

I commend the Bill.

Photo of Willie PenroseWillie Penrose (Longford-Westmeath, Labour)
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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.

4:05 pm

Photo of Denis NaughtenDenis Naughten (Roscommon-South Leitrim, Independent)
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I wish to share time with Deputy Mathews.

Photo of Marcella Corcoran KennedyMarcella Corcoran Kennedy (Laois-Offaly, Fine Gael)
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Is that agreed? Agreed.

Photo of Denis NaughtenDenis Naughten (Roscommon-South Leitrim, Independent)
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I listened with interest this morning to the contributions from the various speakers on all sides of the House. I have to say I really enjoyed it. They say that when people spend long enough in this House, they see Members coming in here contradicting what they said many years before. I heard many of the contributions here today and I thoroughly enjoyed them from the point of view of the way attitudes have changed.

I remember when this issue in regard to the groceries order was first being debated in this House. At the time, we had the Competition Authority pushing the agenda to abolish the groceries order, with Mr. John Fingleton heading it up and campaigning vigorously that the groceries order was anti-competitive and anti-consumer, and this was endorsed by the National Consumer Agency at the time. Mr. Fingleton succeeded in convincing the Minister of the day, Deputy Micheál Martin, to abolish the groceries order. Within a few short weeks, Mr. Fingleton had left us and had gone to a similar job in the United Kingdom, and was vigorously arguing the exact opposite, namely, that there was a need to introduce a groceries order in the UK because he had seen the decimation that had been created by the abolition of the very same type of law in the UK. Things come around very quickly.

It is frustrating to see what has happened. We are now trying to clean up a mess that was created in 2005 with the abolition rather than the amendment of the groceries order. This Bill, in some small way, begins to deal with that but, sadly, the issue of alcohol and alcohol abuse, including its gross abuse through its use as a loss leader and the below-cost selling of alcohol, an issue that was highlighted at the time of the introduction of the legislation, is not being addressed in this law. We will have a report in June and there will be more navel gazing in regard to it. In the interim, however, we have the gross abuse of alcohol, which is freely and cheaply available, and is cheaper in some instances than a bottle of water or a litre of milk.

After the enactment of the Competition (Amendment) Act 2005, we saw very quickly that food prices were not reducing. In fact, if one looks at the EUROSTAT figures, food is still comparatively expensive in Ireland compared to other parts of Europe, so we have not succeeded in reducing food prices. Even some of the big players in the food sector, such as Procter & Gamble, Nestlé and Unilever, themselves complain about the dominance of the supermarkets, which is dictating the price they receive. They are the big players. What chance has a small producer, particularly in regard to non-branded goods such as perishable food products, when the big players in the industry feel they are being limited and restricted in regard to getting a fair price for their products?

We have a particular challenge for food producers in this country. The litmus test in regard to this legislation will be whether it ensures that primary producers get a fair return at the farm gate for their food product, one that covers the cost of production, leaves them with a basic margin and rewards them for the work and investment they are putting into producing the product. That will be the litmus test. This is not something that has come to the fore in recent times. I recall that in 2005 I published a food comparison in regard to the farm gate prices versus the supermarket shelf prices of food, and I published those figures again in 2006 and in 2007. Consistently, over that period, this showed a more than 200% markup from a farm gate price to the supermarket shelf price of basic foodstuffs. Taking a basic basket of goods which was costing the consumer €31, the farmer was getting just €13. Of course, the supermarkets were saying they did not have control over processing. I would like to know how much processing is involved in taking a head of cauliflower from north County Dublin and bringing it to a supermarket shelf in Dublin city centre, yet there was a 210% markup. The farmer was getting 50 cent while the retailer was charging €1.55 for that head of cauliflower at that time.

We saw what happened before Christmas in regard to Brussels sprouts, potatoes and carrots that were being sold at 5 cent. We were told below-cost selling of basic foodstuffs like that was illegal under the Competition Acts and that it could not happen, yet this went on under our noses and nothing seemed to be done about it. Interestingly, Agri Aware, through Ipsos MRBI, carried out a survey of consumers. Nine out of ten members of the public in this country felt that legislation should be introduced to give a fair price to farmers for foodstuffs, and seven out of ten believed that below-cost selling of vegetables was not to the long-term benefit of the consumer. We can see from the markup on fresh food produce that consumers are losing out in this regard. Consumers need to know why there is such a markup and farmers need to know why they are not getting a basic return for the work and effort they are putting into producing the product in the first place.

The Minister in his earlier contribution said he was going to sit down, along with his officials, with the Minister for Agriculture, Food and the Marine to draft a statutory code. That is not good enough. We need to see that statutory code and we want to see the colour of the Minister's money in regard to that statutory code. This legislation has been long enough coming - it has been promised and promised. I believe that, at the very least, in tandem with the publication of this legislation, the Minister should have been in a position to publish a draft of that proposed statutory code. I will be proposing that an amendment should be included in this legislation that will ensure that statutory code is, at a very minimum, adopted within six months and gets the formal approval of both Houses of the Oireachtas so that Members of this House can see that secondary legislation, have it debated and ensure it deals adequately with all of the issues.

These include issues such as hello money. Even though in theory this is banned under the current law, in practice it is happening.

As the Minister knows, in 2009, Deputy Creed highlighted the fact that individual food suppliers were paying €1 million per annum in hello money to retailers to get prime shelf space in supermarkets. He went on to say that ten companies were forced to pay €30 million during a four-month period to access secure shelf space in supermarkets. That practice is continuing today even though the Consumer Acts prohibit it. This is because the Acts put the onus on the supplier to initiate court action when the supplier is not in a position to do this because of the stranglehold the retailer holds. I would like to see amendments to the primary legislation - it is written in black and white here - to ensure that the food producers and processors are protected when selling their food products into supermarkets and that practices such as the use of hello money are abolished once and for all.

The final issue I wish to raise with the Minister is one I raised last week. I thank him for the reply I received on foot of my question on the Order of Business. As he knows, the issue I had was a far broader one, namely, competition law and access to markets across EU borders. Sadly, nothing is being done about this. I know the Minister for Agriculture, Food and the Marine is holding a summit on the beef sector tomorrow. Hopefully, we can see some progress in respect of that. An analysis carried out recently by the farming section of the Irish Independentshowed that Irish beef producers are experiencing price declines that are up to six times greater than those faced by their EU counterparts over the past 12 months. This is equivalent to a €200 per head loss or reduction in prices for beef farmers in this country.

The beef sector is an integral part of the agrifood sector in this country and is worth €2 billion per annum to the economy. However, the industry has been decimated over the past 12 months, particularly in respect of the collapse of bull beef prices which is having a direct impact on farmers' livelihoods. There is a significant price differential between here, Northern Ireland and mainland Britain. Not only do we have a price differential, but we have a situation where some factories north of the Border and in the UK are refusing to kill cattle born in the Republic of Ireland. The Minister for Agriculture, Food and the Marine and Bord Bia need to engage directly with their counterparts in Northern Ireland and Great Britain as well as the major retailers and processing groups to take these artificial and anti-competitive barriers out of the system. I raised this issue here today is because the retailers and major processors about which I am talking are operating in this jurisdiction, Northern Ireland and Great Britain. They have different rules depending on where those cattle are born. Factories are applying an uneconomic 400 kg weight limit on stock here yet the same meat company dealing with the same retailers into the same market is operating a 450 kg limit in other jurisdictions. This is making it virtually impossible for Irish farmers to produce product to go into those markets. It is not just those particular specifications. It happens with specifications such as the final residency period for animals. It is 70 days for Irish cattle but in some of their counterparts' requirements, it is down as far as zero and all for beef that is going into the UK market. Not only is it anti-competitive, it is manipulating the trade and pricing and profiteering on Irish beef and British consumers.

We have a bizarre situation where we can export live cattle on the hoof to Benghazi in north Africa yet we cannot export those same cattle to Belfast or Birmingham. There is something fundamentally wrong with a system that allows such a situation to arise. We have EU labelling laws that specifically provide for that, we have no problem with live trade from Ireland to other jurisdictions and this issue does not arise with the live trade across the borders between Spain, France and Italy and yet we cannot bring live cattle from this country across the Border to Belfast and have them slaughtered north of the Border. There is something fundamentally wrong and it needs to be immediately addressed because it is undermining the livelihoods of Irish beef farmers.

4:15 pm

Photo of Peter MathewsPeter Mathews (Dublin South, Independent)
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I thank Deputy Naughten for giving me some of his time at short notice. The Bill is an omnibus Bill. Rather than going into the anatomy of the Bill, I will look at the overview. There are more than 70 new Members of this 31st Dáil. This is territory that the experienced and longer serving Deputies will have been familiarised with over the years. It is an omnibus Bill that addresses three main areas; the amalgamation of the National Consumer Agency and the Competition Authority; the changes to competition and consumer law, including making provision for the regulation of the grocery goods sector; and the recommendations of the advisory group on media mergers. That is a really broad spectrum. To be able to get an authoritative handle on that would require a huge amount of focused time.

It is very important to take up the themes of experienced contributors here such as the points made by Deputies Naughten and Penrose. Deputy Penrose spoke about the disappearance of the corner shop. This affects not just the village shop, but shops in smaller towns which are being displaced by large supermarkets - from the corner shop as we call it in English to the carrefour as the French call it, which is the crossroads scale of doing business.

We need to be careful about the opportunities for the production of the consumer goods we consume - the farmer, producer, grower and so on. If we allow the power of the multinational-scale operators to dictate what goes on in the marketplace, we will lose that sense of innovation and creativity. There are levers that can be used quite apart from the usual regulatory ones. We could target taxation at the larger multiples and have a differentiated corporate taxation arrangement and a relief taxation or compensating arrangement for sole traders or smaller producers who have been conducting business effectively and honourably for a minimum number of years. It is a different way of looking at things and I invite the Minister and his officials to look more closely at it.

Loss leaders, below cost selling and the alcohol problem must be addressed. It is not good enough to just tinker at the edges and look at the algebra of what has happened in the past and what can be done about it. There is a physical challenge, which is to get the stuff out of the reach of people who should not be consuming it and work towards that. We need to work out how we can do that in terms of pricing or physical obstacles to obtaining it. We must work from simplified first principles rather than looking at the labyrinth of rules, regulations, papers and articles that exist at the moment. We need to clean the blackboard, start from first principles and simplify.

I believe the framing of this Bill is a bit unfair. It is called the Competition and Consumer Protection Bill but that is not what it is. Its constituent elements are highly complex, convoluted and labyrinthine. Maybe the Bill should have been produced in three parts so that we would have an idea of what level of investigation and consideration needed to be applied. An omnibus approach is not ideal. We are all in favour of consumer protection but this Bill is not really framed honestly.

4:25 pm

Photo of Helen McEnteeHelen McEntee (Meath East, Fine Gael)
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I welcome the opportunity to speak on this legislation. I welcome the Bill and thank the Minister for bringing it forward. It has been long awaited for many different reasons. I wish to focus my contribution on the agricultural sector and the smaller producers in particular, that is, those growing fruit and vegetables and selling them on to the larger multinational corporations. I met with many such producers in recent times and before I was elected and they raised the issue of below cost selling in the sector and the fact that there is not a fair balance among all of the stakeholders and players on the field. This has been apparent for a long time and has resulted in many smaller producers being unable to sustain their businesses. We must deal with that. I know that I am always blowing the trumpet for County Meath, but we have a fantastic reputation for the quality of our food and local produce and for our people. I would hate to see a fantastic industry and tradition disappear because we took our eye of the ball for a split second, because that is all it takes. Something must be done and this Bill, without a doubt, is a good start and I thank the Minister for that.

The legislation deals with a number of different issues but I particularly welcome the section that focuses on grocery goods. We need to regulate certain codes of practice in the sector. We need to do that in order to strike a good balance and to ensure fairness between the different stakeholders, including suppliers, retailers and consumers. We need to give consumers some credit in terms of what they are buying and where they are buying it. Most people that I speak to want fresh, local, Irish produce and are often prepared to pay that little bit more to keep it Irish, to ensure that they get what they want and that their neighbours do not go out of business. It is unfortunate that we need to introduce regulations in this area but needs must. I welcome the Bill and anything that protects the interests of smaller farmers. I know that initially there was talk of a code of conduct but I believe that statutory regulation is what is needed and I am delighted that this is the route the Minister has taken. Codes of conduct are more often than not ignored so we need to ensure that the legislation is effective and is adhered to. The regulations will have full legislative force and will be enforceable by law in the context of the issues covered by them.

An issue that was raised with me by many people on the ground was the need for an ombudsman to oversee things. I spoke to the Minister about this and believe we should keep it in mind and not dismiss it out of hand. Hopefully the merging of the National Consumer Agency and the Competition Authority will create a strong oversight body that will do the work of an ombudsman. However, we will have to see how that works in practice. We must make sure that it is completely independent and that people feel they can make a complaint without facing repercussions elsewhere. People need to feel that they are completely protected and I hope that is what we will see.

When it comes to the regulations, there are many issues covered in the Bill which I welcome but it would be important to see more information on these regulations before they go into the legislation itself. I am sure the Minister would agree that this is legislation from which we can work and which we can build on and strengthen over time, according to what works and what does not. There are two specific issues about which I am concerned, the first being the requirement for a company to have an annual worldwide turnover of €50 million in order to enter into the contract. That it is fine for the small grower who deals directly with the likes of Tesco, Aldi or Lidl, all of which have a turnover of over €50 million every year, but it is problematic for those who sell their produce to a middleman or a distribution company which does not have a turnover €50 million annually. Perhaps we could examine the possibility of reducing the threshold of €50 million. The second issue is retention of title which is not addressed in the Bill. This is a problem that many farmers and suppliers have to deal with when a company goes bust. By right, the goods should still belong to the farmer or producer until money has changed hands. We need to do something to protect the smaller farmer.

Much of what is contained in the Bill is a step in the right direction. I welcome the legislation, although I think it could possibly go a bit further. Having said that, I know the Minister is open to change and debate, which I also welcome.

Photo of Martin HeydonMartin Heydon (Kildare South, Fine Gael)
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I thank the Minister for bringing this long-awaited Bill before the House. I understand the complexities involved in trying to bring together so many different facets of law. The Minister is charged here with achieving a very fine balancing act which seeks to ensure the best outcome for the consumer, while respecting the rights of primary producers and processors. It is important that pursuing the best for the consumer does not have unintended consequences, as can often happen.

As a member of the Oireachtas Joint Committee on Agriculture, Food and the Marine, I wish to focus on the grocery goods aspects of the legislation. I was heavily involved in the preparation of the aforementioned committee's report in October 2013, entitled Increasing Equity and Transparency in Producer, Processor and Retailer Relationships. The committee, under the chairmanship of Deputy Andrew Doyle, put a significant amount of work into engaging with all of the key stakeholders and hearing their points of view. Some stakeholders were more giving of their time than others. On the large multiples side, unfortunately Dunnes Stores was unwilling to participate and discuss matters with the committee. However, we had a very robust debate with the other big multiples. In fairness, we listened to a lot of their concerns and issues.

A couple of articles were published at the time of the publication of the committee's report, one of which referred to the committee as one which was "stuffed with Fine Gael farmers" and which was behind a new quango. That took a very specific view of our work. The underlying suggestion was that a Deputy coming from an agricultural background might not have the best interests of the consumer at heart. The author never outlined whether he had any links with the retailers or the multiples or whether his views were purely altruistic. As the committee chairman pointed out in response to that article, having farmers on an agricultural committee is not the worst crime in the world, no more than having teachers on an education committee or doctors on a health committee. Our background means that we would be very aware of some of the difficulties being experienced by primary producers.

Such problems were clearly manifest before Christmas for fruit and vegetable producers. We saw primary producers being put under enormous pressure, with carrots and Brussels sprouts being sold for a few cent, far below the cost of production.

Those primary producers had to take the hit on that because of a price war. That kind of protection is required because otherwise such people will go out of business and will not be there to produce the food. Consumers need to realise that food is different from other commodities and that security of food supply cannot be taken for granted. My grandfather, Lord have mercy on him, always used to say: "When you're doing a deal with somebody there has to be something in it for all sides of the bargain." Everybody needs to come away with a little bit of something, but if one side is squeezed so much that there is nothing left for them, they might not be there to do the deal next year.

The horsemeat scandal highlighted an element of that to a point. A large retail multiple was selling six own-brand burgers in a box for €1.20, which is 20 cent each. That large multiple informed the large producer that it needed burgers for 8 cent each, which is what they would pay. If the processor did not provide that, the multiple would go elsewhere. The large multiple may have been surprised and shocked to find out afterwards that the burgers contained horsemeat. It may not have known that directly, but it must have known that it is not possible to produce a beef-burger for 8 cent. Therefore, the multiple had to know it, albeit inadvertently. We need to address that kind of issue.

The below-cost sale of drink as a loss-leader is a product of a previous drive that was supposed to be pro-consumer. In many respects, however, it turned out to be much more pro-retailer and has left us with a significant amount of difficulty.

I welcome a lot of what is in this Bill and I look forward to the detailed work that will happen on Committee Stage. I am disappointed there is no ombudsman as part of the legislation, but I accept the Minister's point about the costs involved and the risk of duplication. Nonetheless, we should keep a close eye on what is happening with the adjudicator's position in England which seems to be quite effective, although it is relatively new. As Deputy McEntee said, we should keep an open mind as to how these things will work out in future.

To go back to our report, we want a fair balance between all three parts of the equation. The retailer must be able to make a margin, while the processor and primary producer are in a vulnerable position as price takers for their product, but they need a fair margin to survive. That is also in the consumers' interest in the long run.

I welcome the merger of the National Consumer Agency and the Competition Authority along with the extra powers being given to the new merged entity. I accept what the Minister said in his speech earlier, that prices will continue to be set by hard negotiations. Everybody wants to be able to do a fair deal and they do not mind hard negotiations once the deal on the table is agreed. The Bill provides a back-up so that everyone knows there will be implications for anti-competitive behaviour. Breaking competition law can have a significant impact on all consumers, although it may sometimes be hidden. Our national competitiveness, which ultimately leads to job creation, is well protected under these new measures.

I commend the Minister for his work in bringing this long-awaited Bill before the House. I look forward to see it progressing through the Oireachtas, as well as seeing how its various aspects will ensure a fairer system whereby everyone will be protected in future.

4:35 pm

Photo of Patrick O'DonovanPatrick O'Donovan (Limerick, Fine Gael)
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I compliment the Minister for bringing forward this important legislation. Following on from the last speaker, I do not know where media commentators would place me on the spectrum, given that I am totally in favour of everything he said. I am not a Fine Gael farmer but I do advocate on behalf of the farming community who make up a large part of the economy in my constituency. I make no apologies for that.

Both the media and farming organisations have commented favourably on the Bill. They have laid down a challenge to the Minister, Deputy Bruton, to follow through on the legislation. I know the Minister's background and he is committed to ensuring that there is fairness and equity for primary producers. That has been well enunciated both in this House and elsewhere.

I know, as the Acting Chairman does, that poultry producers have suffered at the hands of such behaviour for a number of years. The poultry industry used to be a massive employer in my constituency. We had two processors outside Newcastle West which employed hundreds of people. At the time there was little or no protection in terms of labelling, consumer information or ensuring that the practices identified in this Bill were dealt with. Both processors went out of business within 12 months of each other. Luckily the producers are still there but they, no more than beef or milk producers, have major input costs, including gas, water and cleaning out poultry sheds. Yet the amount they are getting for their product has remained static.

Beef farmers are also concerned about their input costs and what they are getting for their product. They are producing an exceptionally high-end, quality product that is fully traceable. It is safe, the best in its class and beats everyone around the world, yet beef farmers feel that the price being paid for the product they are sending to factories is questionable. I encourage both the Minister, Deputy Bruton, and his colleague, the Minister for Agriculture, Food and the Marine, Deputy Coveney, to sit down with stakeholders in the beef industry to examine this as a matter of urgency. This is a major issue for the rural economy in my constituency and others around the country. The issue arises from falling prices versus rising input costs that producers are now expected to bear, in addition to the degree to which the product must be finished.

I wish to declare a vested interest in one aspect of consumer protection that is not included in the Bill, which concerns rural pubs. One can currently buy a slab of beer and bottles of vodka in a supermarket as loss leaders at a knock-down price that is cheaper than water. We know there are health implications for young people and for society at large. However, there are also implications for publicans who really should be included in the terms of the Bill. I have a vested interest in this because I have family members who are publicans.

It is frightening to see the number of pubs that have been lost across the country in recent years. If something does not happen soon we will not have to worry about the Scottish case that is being, or might be, taken in the European Court because there will be no pubs left at the rate they are disappearing. That is no exaggeration. Something will have to happen to stop this haemorrhage of people from rural pubs to a situation where they are drinking in an uncontrolled environment at home. We know about the societal damage and the health implications, so such measures are badly needed.

Getting back to the thrust of the Bill, any day when there is one State agency less than before is a good day. The Minister, Deputy Bruton, is merging the National Consumer Agency and the Competition Authority into the new competition and consumer protection commission. When we came into Government we gave a commitment to the de-quangoisation of Ireland. Initially, a lot was done to reduce quangos but a lot more needs to be done. Some Government Departments are effective in de-quangoising but others need to do a lot more. Every effort needs to be done to achieve that.

The main thrust of the Bill examines dominance. The Irish grocery sector is now dominated by three or four key players. Farming representatives and others have asked why those sectors are not required to publish annual accounts detailing the profits they make in Ireland. Why are they afraid to publish detailed information that would tell consumers and the authorities about the amount of profits involved? I implore the Minister to examine ways by which that can be done so that the playing field can be levelled both for Irish and non-Irish producers.

From the consumer's point of view and for the parents of young children feeding a family, it is essential to get value for money. No one disputes that. I go back to one of the central points I made at the start. The consumer deserves to know what it is he or she is buying and where it was produced. At the moment, that is not the case. Labelling continues to be an issue whether in relation to chicken fillets or milk.

On the issue of supermarket practices, I note that I worked for Proctor & Gamble, a company referred to by previous speakers. The company had huge difficulties in relation to shelf space in supermarkets. If the likes of Proctor & Gamble have difficulty securing shelf space, what hope would I have if I were a cauliflower producer from Balbriggan? If those practices can be addressed to facilitate a level playing field for producers, it must be a good thing.

Farming organisations, producers and commentators have welcomed the Bill. They have all thrown down a marker however. They are waiting to see what happens. The implications of the Bill are important. We cannot allow certain practices to continue ad infinitum. While the consumer will be in a better position when the Bill is enacted, I encourage the Minister and his colleague, the Minister for Agriculture, Food and the Marine, to look at the beef sector.

I also ask the Minister in his role as a member of the Cabinet to address the demise of the rural pub. The Bill will address in some ways the demise of the rural shop. I concur with the remarks of Deputy Willie Penrose in that regard. If we do not grasp the nettle in terms of the sale of alcohol, we will not have a rural pub infrastructure any more than we will have a rural shop infrastructure. I welcome the Bill and look forward to its implementation.

4:45 pm

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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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.

5:05 pm

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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I thank the many Deputies who contributed to the debate on this Bill. Some of them feel there is not enough in it. Deputy Mathews has suggested that there might be too much in it and that some parts of it could have been separated out.

Photo of Peter MathewsPeter Mathews (Dublin South, Independent)
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Some items could have been dealt with separately.

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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In an ideal world, we would have had a consolidated Bill, which would have been even bigger. As it would have been consolidated, it might have been easier to follow. There are three elements to this. We had a competition Bill last year as well. It is a rolling programme of reform.

In opening the debate, Deputy Sean Fleming expressed concern about the decision to give responsibility for appointing a group to look at media mergers to the Broadcasting Authority of Ireland rather than the Competition Authority. He suggested that this will rob the Competition Authority of its role in some way, but I think the contrary is the case. As other Deputies have said, the Broadcasting Authority of Ireland is a body that studies media plurality and diversity. It is steeped in digital media as well as written media. I think it is better equipped than the Competition Authority to carry out this function. These bodies are already subject to the Freedom of Information Acts and that will continue in the future.

Deputy Sean Fleming also asked why we are not using the existing Office of the Ombudsman, rather than the new competition and consumer protection commission, as the enforcement body. We are taking our approach for a very good reason, which is that the existing Office of the Ombudsman does not have any of the legal background in this. Instead, it deals with public service issues and has no powers of enforcement of the sort we envisage here.

The below-cost sale of alcohol was a consistent theme during the debate. Different versions of the same point were made, for example when it was suggested that minimum alcohol pricing should be introduced. Obviously, a much wider issue of public policy that is not confined to competition law is at stake here. Competition law deals with fair trading rules and the abuse of dominance, etc. As many Deputies indicated, the below-cost sale of alcohol is being considered in the context of the effect on society of drinking rather than in the context of its effect on competition. I appreciate that it is an issue.

Deputies Tóibín and Pringle expressed some concern about weaknesses in the enforcement of competition in certain product lines. It is important to recognise that the Competition Authority is independent in the conduct of its business. It has very strong powers of investigation and can take action where it establishes that abuse of dominance or collusion is taking place. It is open to the public to bring any such abuses to its attention. We have strengthened the authority's enforcement powers, increased its number of staff, added to the number of penalties it can impose and supported the forensic nature of its ability to pursue these matters.

A number of Deputies asked why we decided to provide for regulations rather than a code of conduct. To put it simply, regulations are enforceable by an authority like the proposed new commission, whereas codes of conduct are typically used as guidelines, in the labour area, for example, and are not compellable by criminal sanctions. We are seeking to introduce compellability here. That can be done by means of regulation. It has been recognised by Deputy Ó Cuív and others that the flexibility associated with regulations means that they can adapt to changing circumstances. Something that is enshrined in primary legislation does not have that flexibility because it is there for all time.

The question of whether margins should be published was raised on a number of occasions. It was mentioned at the end of the debate by Deputy Ó Cuív. It is clear that such an obligation cannot be imposed on some sectors if it does not apply to all sectors. If we were to impose such an obligation, it would raise much wider issues relating to foreign direct investment and other matters. Deputy Ó Cuív might be interested to note that before he spoke, Deputy Naughten referred to some very useful work he did in 2006 and 2007 and which I remember well. By simply comparing farm gate prices with supermarket prices, Deputy Naughten was able to make a very good analysis of what was happening and the trends that were occurring. Deputy Ó Cuív repeated some of that analysis. One does not need to see the profitability numbers or accounts of individual companies to see what is happening in the marketplace. The new authority will have a role in looking at pricing. To be fair to the National Consumer Agency, it has published very useful North-South price comparisons. It has examined the treatment of the same product in different shops, for example. It has provided people with some very useful information.

People sometimes expect too much of this legislation. Deputy Ó Cuív outlined his belief that competition law should be used to assure a person a living, in effect. No competition law can deliver that. We have seen many companies go to the wall because cheaper products were imported or made available elsewhere. One cannot use competition law to guarantee a living to people in any business. One can use it to ensure the terms of engagement between the primary producers and the multiples are fair, and that is what we are doing in this legislation. The terms that are set out in this legislation are very substantial. They relate to issues such as having a written contract and being able to produce that contract for inspection. They specify how that contract should deal with all sorts of things that are sources of concern, such as the manner in which suppliers are affected when goods are put on promotion or when there is wastage or shrinkage.

If the forecast made by the supermarket is wildly wrong, what happens to the supplier's contact? These are real concerns which we can and will seek to address. The regulations are being drafted in parallel with the bringing forward of the legislation. Members' contributions in the Chamber today and the debate in committee will influence how we introduce the regulations and they will, of course, be presented to the House for consideration.

Deputy Thomas Pringle raised the question of whether we can regulate home-produced content on radio stations. This is not an issue that can be dealt with by consumer law. To be fair, we do use taxpayers' money through licence fees to support the provision of home-produced programmes and so on.

Deputy Mick Wallace raised the much broader question of why, in his view, some of the issues about which he is concerned are not adequately reflected in the media. Again, this is not a competition issue and cannot be dealt with through competition law. What we can do is ensure that where a media merger is proposed by a party who already has a very substantial interest in the market, it will be scrutinised not only on competition grounds but also on public interest grounds, taking into account such issues as diversity, plurality of ownership and so on, and a decision will be made following a full and open consultative process, with an advisory council established and people having the right to have their views heard. When the Minister makes his or her decision in such cases, the advice he or she received will be published along with the decision. It will be a fully transparent process.

Deputy Dara Calleary raised a concern regarding ministerial direction. The objective here is not to direct the competition and consumer protection commission in any area where it has independent freedom of movement and its own statutory remit. The provision in question is a general one. On issues of pay, for example, or the terms on which people are employed, the Minister would have the authority to offer direction. We can clarify those provisions as we go through Committee Stage.

Several speakers referred to resources, with some highlighting the saving of €170,000 through the establishment of the new agency. That saving is not the purpose of this legislation. It is simply the sum which arises from the removal of an existing board. The Bill will greatly strengthen the enforcement capability of the new body compared with that of the existing agencies. We recognise that without the teeth to match the law we are bringing in, we will not have an effective agency. There are real benefits in bringing together the two dimensions in which people view the market, namely, the consumer side and the competition side, the latter having to do with fairness of trading between producers. Both dimensions can have a positive impact for consumers if we get the balance right. The objective is to ensure consumers are informed, can exercise their rights and are not hoodwinked by unfair practices or misleading descriptions. If we have no barriers to entry, effective means of dealing with collusion where it occurs, and prevention of abuse of dominance, then we create a marketplace where there are good outcomes. Bringing those two dimensions of oversight of our markets together under the remit of one agency is a win-win situation. It creates a more pragmatic agency than we would have where the focus is merely on the fairly legalistic competition background, and gives teeth to the agency in dealing with consumer protection issues. We get the best of both worlds by bringing the two dimensions together under one agency.

In my opening speech, I recognised the work done in this area by Deputies Willie Penrose and Andrew Doyle. They highlighted many of the problems and issues that have arisen and greatly assisted us in our work.

Several Deputies raised the issue of the turnover limit of €50 million. Perhaps we have got it right in this regard given that one Deputy expressed the concern that small operators might be caught by unnecessary compliance while others felt the threshold should be reduced in order that suppliers would not find that some of those with whom they are dealing are not covered by the legislation. There is a balance to be struck here, and we must try to strike it at a point that is fair. Again, this is an issue we can tease out on Committee Stage.

Deputy Michael Healy-Rae and others referred to the practice of vegetables being sold at 5 cent and argued that this does not serve anyone's interest in the long run. That is fair comment, although I am aware that at least one of the retailers selling at those types of prices did pay farmers the full contracted price. In other words, it is not altogether clear that such practices always mean the farmer loses out. We are trying to ensure there is fair practice in this area.

Deputy Peter Mathews raised the broader issue of how to promote an environment where small and medium enterprise can thrive. Some of the effort in that regard is general, encompasses broad supports for entrepreneurship, while some of it, as the Deputy said, necessitates a consideration of narrower issues such as how we can help small operators to survive in more remote areas. Tax policy is clearly a vehicle in that regard. Deputy Penrose highlighted the issue vividly by painting a picture of a future where there is no store between Mullingar and Longford. The pressure on small operators is coming not just from the business environment but also from the choices people make. That is something we cannot control through competition law, but we can try to ensure there is a level playing pitch.

Deputy Denis Naughten raised several issues regarding the beef trade which stray well beyond the scope of this legislation.

In regard to the regulations, as I have said, they are in production. The model was based to a considerable degree on that produced by John Travers. In fact, all of the aspects reflected in his model are reflected in the general powers I have taken in the Bill. We have a good basis here for drawing up regulations that will be effective.

I hope we will proceed to Committee Stage in a timely fashion, where we will have an opportunity to get into the detail of these provisions. I thank Deputies for their contributions and look forward to further discussion with them in committee. I take this opportunity to thank the officials who put a great deal of work into this legislation. It is a complex proposal, as Deputy Mathews pointed out, which deals with three different areas. Getting legislation through the Houses can remind one of waiting in a station through which the train passes only now and again. Once one has boarded the train, it is important to get the issues dealt with in an opportune way. This Bill sees the fulfilment of two commitments in the programme for Government. We will provide the time on Committee Stage to ensure every stone is turned and there is full transparency in terms of what we are proposing to do.

Question put and agreed to.