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

I was told that the groceries order did not depress suppliers' prices. I was also told that it provided lower prices to consumers. Logically, it depressed the retailers' profits. Something had to give. When I was in school, there was an idea that one cannot create nor destroy energy. This is not altogether true because a nuclear reaction can destroy matter and turn it into energy. Similarly, if suppliers did not take a hit and retailers sold at a lower price to consumers, it is logical that something had to give monetarily. I am sceptical that it was the retailers' profits, but we will leave that issue hanging in the air.

Deputy McNamara asked a valid question on higher overheads. The difference between North and South is 15%, yet we are on the same landmass. Allowing for the primary cost of buying the product to represent 60% of the price and Tesco's overheads to represent 40%, the overheads would need to be 35% more expensive in the South to effect an overall 50% difference. It is difficult to believe that there is such a difference.

Mr. Keohane pooh-poohed the idea that primary producers had an issue with multiples and the power of same. If I only meet one or two complainants, I treat their complaint sceptically, but if it is an issue across Europe it merits further investigation. The pressure being placed on primary producers and suppliers by multiples is of concern to parliamentarians across Europe. The companies present are not charities. They will press everyone for the best price possible. That is good for the consumer, the companies' competitiveness and themselves.

Significant issues have been raised with me about the sector rather than about a specific company. These concern the pressure applied to suppliers at the farm gate and to processors. At times, the pressure becomes unsustainable. We were discussing this matter before the horsemeat scandal broke. A reputable person in the food business who was not affected by this issue told me that price pressures were forcing people to use cheaper ingredients in processed foods. The product's price was determined by the company, not its cost of production. I will take a great deal of convincing to believe otherwise. I want to see substantial evidence proving that there is no price squeeze. I asked how the process of price determination operated, but I am no wiser. That is a serious issue.

It was mentioned that the European code is principles-based rather than rules-based.

This country knows exactly what principles-based regulation brings as opposed to rules-based regulation, and we all thought it was a good idea in the banking sector. We know how that worked out but the exact argument was that it was a principles-based regulation. There has been much talk about the banking crisis genesis but the underlying problem was that it was regulation based on principles, meaning that broad principles were laid out but we did not get into petty rules because of the reasons outlined today relating to bureaucracy, etc. There was also the argument that the financial sector would be much more competitive and that such an approach was good for the financial services sector here. We all know that the Irish public would wish we had not gone with a principles-based approach but that we had used a much more detailed code like the rest of the world, even if it meant higher prices in the short term. People would have preferred smaller bank profits, greater control of the banks and more bureaucracy if we could have avoided the debacle that emerged from principles-based legislation.