Mr. Niall O'Connor:

I will begin by providing some background information on Aldi. Aldi is a privately owned international discount food retailer operating in nine countries worldwide. We entered the Irish grocery market in 1999 and currently have 100 stores nationwide. We opened our 100th Irish store this morning in Callan, County Kilkenny. We also announced this morning our plans to open a further 20 new stores over the next three years, with the intention of creating 300 permanent jobs. Aldi's headquarters and distribution facility is located in Naas, County Kildare. A second office and distribution facility that will service our southern operations will open in Mitchelstown, County Cork, in September this year.

We are committed to working with as many Irish suppliers and to sourcing as much of our offering from within Ireland as possible. When Aldi opened its first stores in Ireland in 1999, our product range was largely imported. Over the past 13 years we have adopted a localised approach to our Irish operations, investing in and developing an Irish buying department comprising over 40 professionals dedicated to increasing the number of products sourced from Irish suppliers. As we have grown, so too have our suppliers' businesses. Aldi has tripled its annual spend on Irish products over the past five years, helping maintain over 20,000 jobs across the Irish food industry. In the same five year period, we have recruited more than 60 new Irish suppliers, meaning Aldi now partners with over 125 Irish suppliers, producers and manufacturers.

Currently, over 50% of Aldi's grocery range is sourced from Irish suppliers. All of our Nature's Isle fresh poultry, beef, pork and lamb are sourced exclusively from Republic of Ireland farms which are certified under the Bord Bia quality assurance scheme. All of the fresh breads and almost half of the cakes sold at our stores are sourced from Irish suppliers. Aldi's milk is 100% Irish sourced, while more than half of the yogurts we sell are produced in Ireland. Aldi's fresh fruit and vegetables range is also sourced, where possible, in Ireland. Other Irish produced products available at Aldi stores include eggs, chocolate, cheese, crisps, tea, coffee, dog food, flour, soft drinks and spring water.

We are always looking to work with new Irish suppliers and to innovate our product range. Our buying department works closely with Bord Bia in this regard and we have held a series of well-attended seminars for existing and prospective suppliers to develop relationships further and plan future seminars with Bord Bia to explore exporting to our international business. In recent years, our Irish sourcing practices have matured beyond trading with traditional grocery suppliers, as we have partnered with a number of new, innovative Irish producers such as EuroPharma Concepts Ltd., from Clara in County Offaly, which is the only Irish company making toothpaste and mouthwashes, and Gallagher's Bakery in Ardara, County Donegal, which produces high-quality gluten-free products.

Aldi's commitment to Irish products is based on our interest in playing an active role in the economy. Equally, we find that Irish customers have a certain expectation with regard to the taste and appearance of certain products that can only come from Irish producers. Since July 2008, Aldi has maintained the position of the fastest growing supermarket chain in Ireland and is now the fifth largest grocery retailer in terms of sales. We firmly believe our strategy of offering high quality Irish produced products has been a key driver behind our continued strong performance and growth. Opportunities also exist for Irish products to be sold in Aldi's international businesses. Currently, products from Irish suppliers are sold in Aldi's UK, US and Australian businesses.

Aldi's chief concern is providing our customers with an unrivalled value-for-money grocery offering, by selling high-quality goods at the lowest possible price. Our customers tell us they have managed to save up to €80 a week on a typical family shop by shopping at Aldi, without having to compromise on quality.

In delivering real value for money for our Irish customers, Aldi maintains excellent relationships with all of our suppliers, farmers and producers. We have adopted a long-term, co-operative, sustainable approach to working with our Irish suppliers, many of whom, including Callan Bacon, Iverk Produce, Irish Yogurts and Gem Pack have worked with Aldi for more than ten years. We offer our suppliers fair market prices for the products they supply. Agreements reached are honoured and invoices are paid promptly. It would make no sense for Aldi's business to squeeze suppliers, seek additional discounts or renege on an agreement. Our business model involves little or minimal duplication in our product range. For example, we offer one type of flour that comes from one supplier. If we make it difficult for our supplier to operate, we will not have any flour to sell in our stores and, as a business, therefore, we would lose out. Aldi categorically does not demand any money from its suppliers. We do not ask suppliers for "hello money" to stock their goods or for financial marketing support to run promotions on their products to give them prominence. Given that 95% of the products sold at our stores are own-label, are unique in our range and are produced exclusively for Aldi, such a practice is irrelevant. We do not seek payments from our suppliers for spillages, wastage, etc. Such costs are borne by Aldi. We negotiate a fair price with a supplier that works for both parties and then stick to that agreement. We agree a cost price for products delivered to our distribution centre and we do not ask for anything more. Our straightforward approach to working with suppliers is recognised by the industry and Aldi has not attracted any of the negative commentary related to some practices in the sector. This was noted at a previous meeting of the committee when the author Suzanne Campbell told members the feedback she had from the industry and, in particular, from the then IFA President, Padraig Walshe, who said trading with Aldi was exclusively positive.

Aldi achieves its low prices and value for money through our efficient, well-organised business model. Efficiencies are sought and achieved in every aspect of our business. I will briefly illustrate what we mean by this. For example, the checkouts in our stores utilise the leading scanning equipment in the market and place multiple barcodes onto the product to make it scan as efficiently as possible at the point of sale for the customer. This results in our checkouts being on average 50% quicker than other retailers. Our stores are largely uniform in size and we know exactly how much they cost to heat, clean and maintain. An Aldi store can be run by between 12 and 15 people, compared to 200 for a large multiple retailer, which leads to staff cost savings. This is not achieved at a cost to our employees; Aldi pays on average 30% higher than the market. We also minimise the use of product packaging and shrink wrap, further reducing the cost of products. Having only 1,350 lines with minimal or no duplication of products, removes the additional costs related to buying, developing and stocking products. Customers are not charged more to have to make decisions about largely comparable products. They, in essence, buy into and trust the choices we have made for them and benefit from the savings. That is a huge responsibility and it is one that we take seriously. Strong customer support has meant Aldi's market growth has consistently been the strongest in Ireland every month since July 2008.

I refer to the proposed statutory code of practice for the grocery sector. Aldi fully complies with all Government regulations and legal obligations with respect to operating in Ireland and will continue to do so. However, Aldi is not an enthusiastic supporter of the introduction of such a code of practice . As previously described, we firmly believe we have a fair and efficient operating system in place with our suppliers. We do not believe, therefore, it is appropriate that we should be punished for the indiscretions of others. Legislation exists to deal with this issue, which is not being availed of by suppliers or producers and we do not see how a code of practice will address this problem. Our primary concern is that the introduction of a statutory code will mean an extra layer of bureaucracy in dealings between the retailer and supplier, which, in turn, will mean an additional cost of doing business and, ultimately, higher prices for the consumer. Our customers understand the strong relationships we have with our Irish suppliers and appreciate the low prices and value for money Aldi provides through our current fair business practices.

Providing correct and informative labelling to ensure customers can make informed decisions when shopping is of the utmost importance to Aldi. Customers are particularly interested in buying Irish products where possible and the need for comprehensive and accurate food information labelling is essential for their trust. All Aldi products are clearly labelled in terms of provenance and content. If a product is 100% Irish, that is, grown or farmed in the Republic of Ireland and subsequently produced and packed in Ireland, it carries a tricolour logo with the words "100% Irish". All of our Bord Bia quality assured fresh poultry, beef, pork and lamb carry such a logo, as does our Irish organic smoked salmon range. We also differentiate between products that are produced in Ireland and those that are packed in Ireland. Finally, if a product is sourced from Northern Ireland, we indicate this. This approach ensures our customers are clear about the provenance of our products.

Aldi was extremely disappointed by recent events relating to the mislabelling of the content of a small number of beef products, which clearly let our customers down. It was totally unacceptable to Aldi and we felt angry and let down by the suppliers in question. If the label says "beef", our customers expect it to be beef. Our suppliers are absolutely clear that they are required to meet our stringent specifications and Aldi does not tolerate any failure to do so. Each mislabelled product was immediately recalled and removed from our shelves and the company responsible for supplying the product removed as a supplier to Aldi. Our rigorous testing and quality control procedures are already among the most exacting in the retail industry. However, recent events mean that Aldi must raise the standards of compliance for our suppliers to an even higher level to ensure that our stringent specifications are met. Aldi is determined to learn from this experience and avoid any repeat. We are now introducing a programme of regular DNA testing to ensure meat content conforms to specification and labelling. Aldi customers need to have absolute confidence in Aldi products and we will continue to work tirelessly to enforce exceptional quality control throughout the supply chain.

Aldi has been the fastest growing retailer in Ireland since 2008 and we firmly believe that the high quality products supplied by our many Irish suppliers have contributed significantly to this growth and we thank them for their continued support in this regard. Our own-brand Irish product range has proven to be very popular with both our customers and the food industry, winning a number of national and international awards for quality and taste. Our Irish suppliers have won 45 Blas na hÉireann national food awards since 2009, picking up more awards than the suppliers of any other retailer in Ireland over the last three years. Our Irish suppliers also performed strongly at the prestigious 2012 Great Taste Awards in London, picking up a total of 29 titles. I will leave my opening remarks at that and I am happy to take any questions.