Mr. Tony Keohane:

There is a wide range of questions. I will deal with a number of them and my colleague, Dermot Breen, will deal with some as well. On the question of relationships with suppliers, we are absolutely clear that our relationships with our suppliers are long-term relationships. Most of our growers and producers have been with us for ten or 15 years. It is a big deal to get a contract with Tesco and it is a big deal to lose such a contract. We are with them and they are with us for the long term. We believe there are checks and balances within our process for dealing with them. We have very good long-term contracts and long-term relations with them. We have regular meetings with them and we take issues on board as they occur.

The point with regard to the farm gate prices and so forth was primarily to demonstrate that the market is working. When and where there are issues and where there are supply pressures, albeit some of those supply pressures might come from outside the State or for other reasons, the market and the supply base is able to bring those points to the retailer and cost prices are adjusted. The suggestion, which I think is absolutely bizarre, that the Irish supply base is unable to speak its mind and make its case is quite frankly not true, from where we stand. The Irish supply base is very capable. They are good suppliers with good product and they are well able to make and present their case when they need to. That is demonstrated by that chart. In addition, we do not make any products. We need suppliers and a supply base. We need a growing Irish supply base and we are in the business of securing long-term relationships with our suppliers. We are not into short-term gimmicks of any type. I am not aware of any suppliers who are afraid to meet us. As I said previously, there are a number of avenues available to our suppliers if they wish to make contact with us either directly or indirectly. We have a confidential line that suppliers are aware of if they need to make a confidential comment to us.

We also survey our suppliers every year. We call it Viewpoint, a viewpoint on suppliers. The vast majority, over 80%, of those suppliers respond confidentially and positively. We do this because we know it is in our and everybody's long-term interest that our relationships with suppliers are on a firm footing, where issues can be brought forward and resolved and adjustments made. With regard to our contracts, we are going through a check at present to ensure all our suppliers who want to have contracts have them. We will be offering all our suppliers those contracts. The contracts allow for joint business planning, where promotions and business growth are agreed. We work jointly on those. We have beefed up, which might be the wrong words, our team in Dún Laoghaire to cope with the increase in the Irish supply base. We are currently putting in some extra resources in Dún Laoghaire to meet the requirements both of the increasing number of suppliers who want to deal with us and also to cope with the current challenges in the marketplace. We know we must keep in regular contact with suppliers and our aim is to do that.

On the question of local suppliers, there was a time when we needed somebody to supply all our stores nationally. If they could not supply them all, we could not manage it. We can now manage one supplier, one product, one shop. We can manage one supplier, three products, five shops or any variation. Our systems will cope with that. Our normal supply route is through our distribution centres. We have one for fresh products in Ballymun and one for non-fresh ambient temperature products in Donabate. Most of our goods flow through those supply bases, with daily deliveries to all our shops. However, we are also capable of taking, and we do take in, local suppliers on a very local basis when there is need and when we agree to do that. Whether it is Cork, Galway or Tipperary, we take in local suppliers through the old-fashioned back door system. Our aim in most cases would be that those suppliers would grow to be bigger suppliers in that area or region and then come into the depot. We do that for efficiency and temperature and quality control reasons to make the whole thing work both for us and the supplier in the interests of our customers.

The difference between our system and what the committee might have heard from earlier presentations is that we do not use the word "central". Everything is approved centrally but it can be done locally. There is not a tolerance for the local management to make a call; that still must be approved at the centre. However, the mechanics of getting the goods in can be done at local level.

I will ask my colleague, Dermot Breen, to respond to some of the questions.