Mr. John Bryan:

As they were shorter, I will start with the last questions. On Senator O'Neill's question regarding hello money, I have had discussions with the Chairman on this issue over the past three or four years, when vegetable growers approached the Chairman and told him they were asked for hello money. Several representatives from the horticultural sector have approached us but they will not make a complaint. Just as Senator Mary Ann O'Brien has stated she must do it, I have met people, both at that level and at a much higher level, who have told me they were asked to make a substantial contribution at Christmas. However, were one to ask them to make a complaint, they would not do it because they know they would get delisted regardless of whether they were a small horticultural grower in north Dublin, a chocolate manufacturer like Lily O'Brien's or perhaps a dairy or beef supplier. They are intimidated by the sheer power of the retailers because to get delisted from organisations like Dunnes Stores, Tesco or the Musgrave Group, which purchase so much of one's product, is a considerable knock to one's business. This reverts to the IFA's point, which is that retail regulation is required, as is an ombudsman who can investigate. I would not be concerned that this might affect Ireland because different levels of legislation exist in different jurisdictions and it actually is the legislation which applies in the individual jurisdictions with which one would be obliged to deal. My only concern would be that some country like France, which is considering a retail code, might go a bit over the top in nationalistic terms, given that we export 90% of our beef and will be exporting more than 90% of our dairy products. Consequently, at European level, we must watch that to make sure no trade-distorting legislation is brought into any of this.

As for the Senator's question on the abolition of the groceries order, the IFA actually had made submissions to the then Department of Agriculture and Food seeking to strengthen it. At the time when the groceries order was abolished, we were seeking to have more products included in it. Several of the products the Senator and I both produce were not covered by the groceries order and we were seeking for them to be included.

In response to Senator Ó Domhnaill, the lessons from the horsemeat scandal certainly must be learned. Representatives of the IFA were in Leinster House on the day the Minister appeared before the joint committee and I thought that was a good discussion. However, we must all learn lessons from that. Moreover, there must be improved legislation. We cannot simply state that it was a mess and then put it behind us, as much stronger legislation is required. We need much greater inspection at secondary processor level. We need much clearer labelling and it is extremely important that labelling is what it says. It is unacceptable that one could buy something, be it water, alcohol or anything else, in which there could be product from six different countries. Clear and transparent labelling is required and this is the time for the Government to act. There is a view, which was expressed by both Ilse Aigner, the German Minister for Agriculture and Stéphane LE Foll, the French Minister for Agriculture, seeking stronger legislation in this regard. Consequently, Ireland also should be pushing for a much stricter legislation. Moreover, to take up a point made by the Senator, if the label says something is Irish, the ingredients should be Irish. Part of what emerged from this scandal was there was a mix and matching process going on and people were using labelling that clearly was designed to mislead the consumer. This was in addition to all the other things that went on involving unacceptable practices. Consequently, a tighter level of regulation is required in this regard. We must learn from this issue and a level of proper legislation must be brought in.

As for the Senator's question on a supermarket ombudsman, the IFA believes precisely what the Senator stated, which is that such an ombudsman should be there to represent the consumer, the primary producer and any other third party. This is because the person who makes a complaint often will be another shop or retailer. The idea is to put in place an ombudsman that can take complaints independently. The Senator inquired about the ombudsman in England and the IFA has met its British equivalent, the National Farmers Union, NFU, on this subject. While it has not been running for long but the NFU is reasonably happy with it. Its members believe the opportunity to make an anonymous complaint, without being rung by the retailer in question to tell one it is dumping one's vegetables the next day, is extremely important. Again, in a response that also answers some of the other questions, there must be proper, substantial penalties. There is no point in having penalties of €100 or €1,000 for an entity with a turnover of €2 billion. One must have real and meaningful penalties and we also refer to ethics in this regard. When a product manager's total salary is based on who he or she does along the line, whether he or she does the primary producer or the consumer, his or her salary is based on a bonus based on how much her or she can screw everyone in between. How can there be ethics when this is the way? This issue must be dealt with in retail legislation, in that one cannot be paid more for buying from the Senator for nothing and then selling for three times that to the Chairman. This entire area must be regulated and the payment system in place for individual product managers at present certainly is encouraging them to do everyone along the line. Moreover, if the penalties are small, they will continue to do this because their salaries are based on bonuses.

Deputy Deering noted that representatives of the supermarket groups appeared before the joint committee and asked the reason they are so opposed to a code of practice. As my predecessor from IBEC stated, they spent a few years stating they were against the voluntary code but now that they think there is a chance of a compulsory code, they are against that but seek a voluntary code, because they know they have a lot to hide. I have never met a retailer anywhere in the world that did not claim no regulation was needed or sought. The attitude is there is no need whatsoever for it, that it should be got rid of and is an unnecessary cost on the consumer. However, food still sells at a higher price in Ireland even as the retailers source much of it more cheaply here in Ireland. It is similar to the point Deputy Deering made in respect of milk. He gets his price, which, relative to different markets in Europe is lower than some and slightly higher than others, but yet the retailers here sell at a price that enables them to take a hell of a good margin on it. Deputy Ó Cuív asked some highly in-depth questions to which I will turn in a minute but milk is a sector in which the capacity of retailers to take a huge margin at a time like this shows no respect whatsoever for primary producers. I refer to the weather and the pressure under which primary producers are operating on foot of the winter that has just passed with the higher costs of meal but yet the retailers pay as little as they can get away with.

Deputy Pringle queried the limit on own-brand products. Probably the main reason the IFA gets concerned about own brands is the retailers use it all the time as a way to push down the price. I do not wish to name brands - and it does not matter whether the milk is from Connacht Gold, Glanbia or whoever - but the retailers stock it and the consumer gets used to buying it. However, if it is Tesco's own brand or Dunnes Stores' own brand, they can substitute the morning after and one does not know from where they sourced it. Essentially, own-brand products give the retailers greater power. Senator Mary Ann O'Brien has left the room but earlier she referred to how the practices come from the United States from entities such as Walmart and so on. These are the practices they employ to push down prices.

Those practices are evident here but we must resist them as best we can and encourage people to do so. They make it way too easy for the retailer to substitute.

We export 90% of our beef and 85% of our dairy produce. As dairy production increases, that percentage will rise substantially. That is why other markets across Europe are vital to us. It is vital that there be free trade within Europe and that we have equal access to France and the United Kingdom, for example. At different times, little barriers can be put in place. However, the Irish market, particularly the fresh beef market and also the liquid milk, pork and chicken markets, is important. Members will see our poultry men protesting when they see too many imported products. They can get a greater margin in their own market.

Everyone selling into an import market sells at a discount. If I sell Irish beef in the United States, I do not sell it at the US price. The same applies to sales in England or France. There is a little discount. If English beef comes to Ireland – there is some – or English chicken or Northern Ireland milk, it all tends to be sold at a discount. The domestic market is vital, especially for fresh meat, such as pork, chicken and beef. Some 10% of the market is at stake but it is a very high-value sector. It is helpful that the major Irish retailers source only Irish produce.

I was asked what we expect the code of practice to achieve. We expect there to be a level playing pitch. Senator Mary Ann O'Brien could not have been clearer. A business person is expected to bring in a big wad of money. However, if there were a code of practice banning this, in addition to transparency, it would be useful. I agree with the Chairman that retrospective action is far worse. The practice to which I am alluding does take place, as we all know. If it were banned and if there were a sufficiently large fine for companies, it would be stopped. It exerts considerable downward pressure. Horticulturalists have told us a major retailer met them at Christmas and sought 10% or 15% of the turnover. They will not stand up in front of this committee unless there is anonymity and proper legislation providing for a massive penalty. Anonymity is very important.

On Deputy McNamara's point, we have met the banks. We have told them about the huge pressure on the pig and poultry sectors and others. There is probably no sector in farming that is not under pressure after the winter we have had. Huge feed costs have been incurred. In a normal year, most stock would be out a little after St. Patrick's Day, even in the Deputy's part of the country. This year we are heading for 1 May. Every sector has considerable debt built up. We have asked the banks to be more lenient and to give people more years in which to pay and to spread loans. We have asked the banks to consider restructuring for some of the pig farmers in serious trouble. Many of the pig farmers have large loans from merchants, as the members will be aware. It is not easy to deal with that. We want to sustain the pig sector in Ireland and address the high cost of feed.

The retail margin plays a huge role. The retail margin taken on liquid milk, beef or lamb is much lower than that taken on pork. A huge margin is taken on pork. Tightening up in this regard would be of considerable help.

I agree with Deputy Ferris. Since 2005 and 2006, I have been coming here talking about labelling. I met former Tánaiste Mary Coughlan and former Minister Batt O'Keeffe and I have worn a trail on retail legislation. I spoke to Deputy Michael Creed, present members and the Minister of State, Deputy Sean Sherlock. There are very few spokesmen on agriculture with whom I have not sat down with over the past five or six years. We are not talking about three months but about six or seven years. We need legislation. I welcome the fact that there is a commitment from the Taoiseach but what I propose needs to happen. People have been made promises for so long. Operators in the pig and poultry sectors are so disappointed that the matter has dragged on for so long.

I agree with Deputy Ferris on proper labelling of all ingredients and the country of origin. It is totally unacceptable that a pie could have unlabelled ingredients from six countries. It is not fair to the consumer or primary producer.

The Deputy mentioned cartels. Retailers have power over major food companies but the power they have when dealing with small and medium-sized producers is unbelievable. The latter are sucked into an arrangement on which they become totally dependent. On supermarket dominance, it would be very helpful to enshrine in legislation the right of people to make complaints anonymously and the right of an ombudsman to impose substantial fines. Retailers will resist the legislation. They will resist voluntary and mandatory codes of practice. However, when the legislation is introduced, most will obey. When there is no legislation, there is an à la cartearrangement, but proper legislation will be a big help.

Deputy Ferris asked about the UK legislation. We met the NFU several times about it. It is relatively confident that legislation can force the retailers to be bit more responsible. I do not like setting my bar too high; I am just saying what I have said already, that is, that there should be substantial penalties. How product salesmen are treated by product managers and retailers is downright scandalous at times. They are treated as if they were a lower form of life. If there were proper legislation in place to find law-breakers, it would be desirable.

Deputy Ó Cuív asked me about eight questions. I welcome his strong support for the Taoiseach's commitment to a timeframe of three or four months. I will have to keep the pressure on until the measure is introduced but it is important that it be introduced. We want action at national and EU levels. I am a little sceptical of action at EU level based on remarks of Commissioner Barnier the other evening. It will probably take him two or three more years talking about voluntary codes of practice and then the Commission will proceed to talking about mandatory codes. This represents a long time. Some countries, such as Denmark and Holland, will be dragged screaming. The amazing point is that the United Kingdom has moved ahead. As Mr. Paul Kelly said, there will be contract legislation, etc., brought into play. The Danes and the Dutch will put up resistance and that is why it is important that there be a national element.

I was asked about liquid milk but he answered the question himself. The reality is that the major processors are spoken to. The Deputy is in touch with the Clóna representatives and a few of the others. The individuals submit a contract. They shop around and if they do not, they talk to people in Northern Ireland. In recent years, the Northern Ireland trade has taken over 25% of the Irish liquid milk market. That is a substantial proportion. The market extends all the way to the area about which the Deputy is talking. It is very hard to regulate the practice. We work very closely with the National Dairy Council, which brands Irish milk as Irish when it is produced and manufactured in the Republic. Some of the people in the North came up with a solution to this. It involved buying a few gallons from someone in the South, bringing it across the Border and then bringing it back down again.

Winter production is very expensive. The dairy sector is vulnerable in this regard. Deputy Deering outlined clearly the costs. Retailers will do anything to keep the price down. We have met all the retailers. The answer to the Deputy's question is self-evident. Why do the retailers not agree? All we do is negotiate on behalf of perhaps 2,000 liquid milk farmers and 17,000 dairy farmers. We had the Competition Authority rampaging up our stairs. Fifteen of its officials were with us for two days just because one or two of our members said the price may not be realistic. It is very clear why companies such as Glanbia, Clóna and Connacht Gold cannot agree on a price. If they even thought about it, the Competition Authority would issue a fine of a few million euro. Retailers, however, will never be fined for manipulating the price downwards. Competition law, as it exists in the State, is very flawed, to the point where it discriminates against primary producers. We have no rights at all but if we just say we want a fair price and cover the cost of production, we are deemed to be conspiring to shove up the price. The competition legislation is wrong.

Reference was made to the one tender every year. Some must tender every three months. With regard to the own brand milk in particular, there is a tendering process, the price is set and one is up and down. Some processors put in a plant with the intention of supplying a retailer. If they lose that business, their viability is called into question.

The Deputy asked me about meat factories. There are 30 to 33 export plants in Ireland and there are three major operations.

The question was asked about supply and demand at different times of the year, and our price in different categories. I do not have a figure off the top of my head for an R3 steer, but one is probably talking about somewhere in the region of €100 between here and the UK. One would get €150 more here than in England for a P-minus cow. Therefore, the price varies on different grades of animal and at different times of the year. Ireland is currently at 107% of the EU average for our beef prices. Last October we were at 92% or 93%.

A question was also asked about the IFA and the levy. The IFA gets a levy on marts, milk, horticulture, pigs and several other areas. How does the committee think we run the IFA? We ran campaigns, the same as Fianna Fáil collects outside the church.