Mr. Niall O'Connor:

If I gave the impression that we do not take account of what is occurring in terms of the raw material prices of products and, therefore, producers' costs, I did not mean to do so. Through a comprehensive tender process, we are aware of the constituent parts of every product that we produce. On the basis of our buyers sitting down and discussing these parts with their counterparts among our suppliers, we agree a fair cost price. We take costs into account, although we do not negotiate directly or have a direct relationship with the producer.

I can cite a number of examples of overseas supply. Our Irish operation does a significant amount of business with Callan Baking in County Kilkenny. Its product is exported to our UK business. We also have a significant relationship with Irish Dog Foods, the products of which are exported to our UK and German businesses. Should members require it, we can provide information on further examples.

We participate in in-store promotions.

I would insert a caveat by saying that we are effectively an everyday low-price retailer. How we differ from others is that the prices we set are the prices the consumer will pay next week and the week after. Their shopping basket does not increase or decrease on a weekly basis and there is really no requirement for consumers to move from one retailer to the next to seek out the best value. They should be aware that they can come to Aldi and avail of the best value in the market and a significant discount every week.

Having said that, we heavily promote what we call a Super Six offer on fruit and vegetables. How that works is that we have meetings with our suppliers and indicate to them that we would like to increase volumes and we negotiate a cost price based only on increased volumes. We then select a retail price that we feel is appropriate for the promotion and we sell the items to the customer at that retail price for a period of two weeks. It is a rolling two-week promotion that we do throughout the course of the year with different products. The cost of the promotion is borne absolutely by Aldi in the same way that it is our cost if we choose to put an advertisement in a newspaper. We do not get into a situation in which we say to a supplier that we will sell a product at X amount and pay them Y. We have a discussion with them in advance. We need to do that because of the point I made earlier, which is to say that we need supply. We will not offer a promotion to a customer and then not deliver. We ensure we have supply. We estimate and agree volumes with the supplier and then we set our retail price and we take the burden of the reduction.

On our spend in terms of groceries, currently the figure we quote is 53% of what we currently pay to our suppliers. In our Irish business, spending on grocery items goes to Irish producers. That is not a retail figure that is distorted by televisions or whatever else; it is what we pay for food items to our Irish suppliers.

In terms of tripling our spend, I am not sure how I can answer that question because we were asked about the base from which it had risen. I am not comfortable giving a figure on where we were. What we can say is that if we assume a figure for three years ago or five years ago, we have tripled it using the measure of cost price that we pay the supplier. Five years ago we were paying X; now we are paying Y, and the volume has increased threefold.