Charlie McConalogue (Donegal, Fianna Fail) | Oireachtas source

First, there was evidence and case law assessed around the introduction of minimum unit pricing for alcohol, for example, that indicated and gave a strong basis that if we were introducing minimum pricing, it needed be for health reasons as opposed to other reasons, and that if we were doing it for other reasons, it would constitute market interference. Minimum unit pricing would seem appropriate because it is a health measure but anything else would be market interference.

To give a bit more detail, the below-cost selling piece is important. It is not something we have not tried in this country before and it was in place for many years. We did away with it because it was found not to work and not to achieve its objective of protecting the primary producers and ensuring they got fair play. Previous legislation banned the sale of some retail products below net invoice price, which was the Restrictive Practices (Groceries) Order that was brought in back in 1987. That order effectively allowed suppliers to specify minimum prices below which products could not be sold. It was revoked in 2005 as it was considered that it had acted against the interests of consumers. There were also difficulties with enforcement.

The Competition and Consumer Protection Commission has advised that studies have found that laws banning below-cost selling often fail to safeguard the parties they aim to protect from declining market shares and often lead to higher prices for consumers. The European Union directive on unfair trading practices from 2019, though including a number of unfair trading practices, UTPs, to help protect small suppliers, including primary producers, did not include below-cost selling or selling below the cost of production as an unfair trading practice to be prohibited. The rules in the directive do, however, ban unilateral changes of contract, which would include the price agreed to be paid, and practices where the buyer requires the supplier to bear all or part of the cost of any discounts on agricultural and food products that are sold by the buyer as part of a promotion.

The banning of below-cost selling is something that other member states are trying to address but, historically, like ourselves, with limited success, if any. For example, a previous law introduced in France does not appear to have achieved what it set out to achieve. In a case centred on below-cost selling in Spanish law, I understand the European Court of Justice raised issues regarding compliance with EU law. There are no plans at this time to introduce it here.

That is just by way of background. The key thing is that if we put in a restriction in terms of what price something could be sold at, it does not necessarily stop those who are still buying that product from trying to squeeze the seller in every way possible. The fact they can sell it on the shelf at a certain amount does not mean that when they are buying it, they will not try to get the lowest price. As I said earlier, when talking to primary producers, we find that what they want to ban is below-cost buying of their produce, not the below-cost selling of it at the end of the chain. They want to make sure that what is bought from them is bought for a fair price. Again, it is not possible to interfere in the market to that extent.

What we need to do and what will be a very important rationale for establishing this office is to try to ensure we are building a healthier supply chain, one that respects the primary producer and one that will have the capacity to put in place codes of conduct, protocols and so on. For products that are sold on the domestic market, that is going to be an important role, and the experience in recent months speaks to that. Whenever there are changes in terms of the pressure and cost that comes into play for the primary producer, as we have seen in recent months, it is important that the rest of the supply chain responds to and respects that, and that it does not simply squeeze the life out of the primary producer and leave them carrying the burden and, ultimately, squeeze all of the life out of them to the extent that they stop producing. There will not be a healthy supply chain unless those who are producing the goods, and doing the biggest part of the work at the outset, are getting a fair margin. For products that are produced primarily for the domestic market, it is important that we ensure this through protocols and the building up of respect, as well as through building an office that is proactive in regard to calling that out and identifying it as important.

The vast majority of what we produce, some 90%, whether it is dairy, beef, lamb or otherwise, is exported and sold abroad. Obviously, there is nothing we can do other than producing the best product possible, ensuring it is a premium product and then marketing it in the best way possible. We cannot do anything to determine what price will be available on world markets or international markets other than making sure, to every extent possible, that we are at the higher end of the value chain. For those products, therefore, the price is set abroad. What we need is oversight and transparency in regard to what is happening in the supply chain so anyone can trace the price back from China, Europe or Britain to what is happening in the supply chain, shine a light on that and try to ensure the producer is getting fair play by doing that.