Oireachtas Joint and Select Committees
Tuesday, 24 April 2018
Joint Oireachtas Committee on Jobs, Enterprise and Innovation
Cost of Doing Business in Ireland: Discussion (Resumed)
I welcome from the Irish Pharmacy Union, Mr. Daragh Connolly, IPU president; Ms Ann-Marie Horan, IPU executive member; and Mr. Jim Curran, IPU director of communications and strategy. I welcome from the Association of Fine Jewellers, Mr. Damian Duggan, secretary treasurer of the Association of Fine Jewellers. The organisation was formerly called Retail Jewellers of Ireland. The purpose of the meeting is to discuss the cost of doing business with particular emphasis on the impact of crime on business.
In accordance with procedure I am required to read out the following notice. By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.
Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.
I remind our guests that each presentation should be no more than five minutes. The presentations submitted by today's attendees have been circulated to members. I call on Mr. Daragh Connolly to begin his presentation to the committee.
Mr. Daragh Connolly:
I am the president of the Irish Pharmacy Union. I am joined today by my colleagues, Ms Ann-Marie Horan, a fellow pharmacist and member of the IPU executive committee, and Mr. Jim Curran, IPU director of communications and strategy. The IPU has 2,200 members and is the representative and professional body for community pharmacists in the community. Members are committed to delivering a quality, accessible, personal and professional pharmacy service that puts patients first and has as its primary goal the optimisation of the health and well-being of society.
Crime against businesses, and pharmacies in particular, is not a new phenomenon but is an issue that has been impacting on our members over a considerable period. Pharmacies throughout the country have been subjected to criminal activity on an ongoing basis and the problem continues to get worse. I intend to briefly run through the following areas: types of criminal activity our members are facing; the cost and impact of crime against pharmacies; reporting of crime; and what needs to be done to protect pharmacy staff.
Our latest crime survey, which was issued in February of this year, found that four out of five pharmacies had been the victim of crime in 2017. This represented an increase on the previous year and was up nine percentage points since 2012. The survey reveals that crimes against pharmacies are not isolated incidents with 81% of victims reporting having experienced two or more incidents during 2017.
The type of crime perpetrated against pharmacies varies from staff pilferage and shoplifting to more serious crimes, including break-ins and raids. For example, 89% of pharmacies that were victims of crime experienced shoplifting, 17% were victims of a break-in and 16% were victims of fraud. The number of pharmacists who experienced a raid, at 13%, had more than doubled since the previous year. This highlights the ongoing threat that remains.
Of particular concern is that almost one case in three involving a robbery or raid was described as violent or involved the use of a weapon. A knife was used in 77% of robberies or raids where a weapon was presented, a syringe was used in 15% of cases and a gun 8% of the time. The more violent crimes committed against pharmacies involve gangs who come in with a syringe, knife, gun or hatchet demanding prescription drugs such as benzodiazepines, opiates and z-drugs such as sleeping pills. They are more likely to come into the pharmacy when it is open because they would not be able to access the drugs or cash themselves in an out-of-hours raid. In one out of every four cases controlled drugs or prescription medicines were taken and cash was taken in 21% of cases. In 11% of cases over-the-counter drugs were taken. Cosmetics and fake tan are the most likely items to be shoplifted in pharmacies.
The cost and impact of crime against pharmacies is significant. In 2017 the average cost per pharmacy of criminal activity was €4,300. While this does not seem like a large figure, it does not take into account the significant additional costs that pharmacies face to protect and insure their premises. For instance, 97% of pharmacies have CCTV, 96% have alarms, 20% are using tagging systems and 6% need to have a security guard on the premises. The most significant costs, however, are the hidden costs. These include the impact on pharmacy owners, their staff and their customers. As I have already outlined, a significant number of robberies involve violence. It is difficult enough to run a pharmacy in the current environment without repeatedly being the target for criminal activity. Not only do these crimes have significant cost implications but, more important, they have a very real and detrimental impact on the people working in the pharmacy. Crime has a negative impact on staff morale, with the psychological aftermath and traumatic effects of these crimes, especially violent crimes, leading to increased levels of absenteeism. We are also aware of several cases in which customers have indicated a reluctance to return to a particular pharmacy in the aftermath of a violent incident.
There is a perception that crimes against business are victimless. Consequently, they are not treated as seriously as they should be. The safety of pharmacists, staff and customers is being put at risk by criminals and this cannot be tolerated. Crime also damages businesses, threatens jobs and negatively impacts on staff morale. These hidden costs can have a far bigger impact on the pharmacy business than the direct costs of damage and loss.
Almost three quarters of pharmacy owners who experienced crime reported the case to the Garda and four out of five were happy that their case was dealt with effectively and adequately. However, almost half of those pharmacists who decided not to report a crime refrained from doing so because they believed the perpetrator would not be charged. One in four indicated that they had no confidence in the Garda response. Of those who decided not to report the crime, almost half had a lack of faith that the perpetrator would be charged. This issue raises a wider question about the confidence pharmacists have in the law and the enforcement system. We are aware from research and anecdotes that there are major concerns within pharmacy about the ability of the law enforcement agencies to adequately deal with the threat of crime and that appropriate penalties for criminal activity are not being applied. Several respondents to our annual crime survey were frustrated with the lack of deterrents for criminals. One respondent said that the culprits know the law better than anyone and so they know how to work the system. He said they often know that they will get away lightly and are not deterred by the prospect of being arrested or jailed. He also said that they do not care about the costs to the business and recommended that there should be a system in place whereby they are made to repay at least some of the costs.
Other respondents were critical of the follow-up to reported crimes, with many confirming that they have received no feedback. They stated:
It is very difficult to obtain status updates on reported crimes. I have reported crimes on many occasions but have rarely received feedback.
Another respondent stated: "On several occasions in the past, I have printed off photos and provided visual footage of thefts taking place, but have never been informed of any conviction.". There are serious reservations with regard to the ability of the justice system to identify and adequately convict perpetrators of crime. There is particular annoyance over the judicial system, primarily due to the leniency in sentences and the feeling that perpetrators are not adequately punished as a deterrent to prevent those committing further criminal acts. One respondent to the survey outlined:
Thieves need tougher sentences. The gardaí make the effort of looking at our CCTV, get the criminals but the problem is with the judges and the court ... the criminals are getting off way too lightly.
Another respondent had an issue with the whole judicial process, confirming that he had to take four days out of his pharmacy to attend court just because the perpetrator "who was caught by the guards coming out of my property at 3 a.m., through a window a witness saw him break, had pleaded innocent.". These comments are typical of the feedback we receive from our members.
There is a general sense that the Garda is doing its best in difficult circumstances and most pharmacy owners are aware of and use the services of their local crime protection officers. Many, however, remain extremely frustrated by Garda response times, the lack of Garda response and follow-up in some instances, and by the general lack of visibility of gardaí on the ground.
What needs to be done? A number of key measures need to be introduced, including more visible policing.There needs to be an increase in the number of gardaí on patrol. One potential way to do this is to increase the civilianisation of administrative duties so that gardaí can concentrate on policing. There must be a fast Garda response to reports of crime. Gardaí have had great success in reducing the level of burglaries since the start of Operation Thor almost two years ago and the high level of crime against pharmacies and their often violent nature indicates there is now a need for a similar targeted Garda operation to specifically tackle crimes against pharmacies. There should be increased installation and use of public CCTV, particularly in town centres. There should also be tougher sentencing. The role of the Judiciary quite clearly needs to be evaluated as the pharmacy sector continues to have very little faith in its ability to address business crime. There needs to be a reassessment of the sentences handed out by the Judiciary when dealing with business crime to ensure that it is an adequate punishment and deterrent. There should be development and implementation of business watch initiatives, ensuring they are promoted effectively to businesses to encourage engagement.
It is not an exaggeration to say that crime against pharmacies has reached crisis levels. Pharmacists who are victims of crime say they are sick and tired of the "revolving door approach", with many complaining that even when the criminals are caught, they are not sufficiently penalised and are allowed to continue with their criminal activities. A zero tolerance approach is urgently required from the Judiciary and the Garda. We need tougher sentencing and a more visible Garda presence to address this scourge. Otherwise, this sinister and frightening pattern of crime on pharmacies will continue to the detriment of our members' pharmacies and staff and the local communities we serve.
There is no issue as we have not just dealt with the crime aspects. It is the cost of doing business, so it is fine if it the presentation is not about crime. I see there is mention of VAT, compliance, etc. That is absolutely fine as the other presentations did not just deal with crime.
Mr. Damian Duggan:
Thank you. I am secretary treasurer of the Association of Fine Jewellers, formerly Retail Jewellers of Ireland. We changed our name a year ago.
The first matter of concern is the 23% VAT rate. With shops across the Border paying 20% VAT, coupled with a strong euro, we are losing customers as we cannot be as competitive as our Northern counterparts. The loss of revenue to the Exchequer is considerable and combined with the non-policing of flights from the USA, South Africa and Dubai by customs, the loss of revenue is very large. Online sales mean cheap imports are available with no VAT implication for the consumer and no duty is paid. We plead with this committee to encourage the Government to bring forward legislation to make all the online markets liable for VAT and duties. We need fair competition for all Irish retailers that would increase revenue for the Exchequer. When we are facing these mounting obstacles to our business, we find there are more jewellers closing rather than opening.
There is the matter of compliance. While all businesses strive to be compliant in every way, we are finding more red tape is making it harder and very costly to implement compliance procedures. We understand the necessity for policing businesses but we saw an example recently of an independent retailer being threatened with a fine because although the required correct signage was visible in the store, it was not within 5 ft. of the door. The jeweller can be fined but department stores selling jewellery that have no signage whatsoever on display are ignored. Small businesses are a very easy target to for authorities as they have easy access to the decision maker in the business. The General Data Protection Regulation, GDPR, is going to be implemented next month and we are putting in measures to make sure we are compliant but the small retailer is the low-hanging fruit and will be the first to be policed and fined if not compliant, taking up more time and money.
In the jewellery business we must keep ahead with our security measures to protect staff, stock and our buildings. The lack of visible policing is certainly not helping all retail and if it was more evident, the amount of retail crime would decrease. The effect would be cheaper insurance, along with a safer environment for all. Our legislation would have to buy into supporting our police. Arresting people with 18 previous convictions while out on bail, with no jail time or punishment served, means there is no deterrent to stop crime in retail shops. This makes things frustrating for the retailer and police.
Retail business is a tough life. To be busy and have plenty of footfall is every retailer's dream. All of the above taken together, however, mean it is not an easy life for the Irish retailer in 2018. I know from speaking with many people in the retail sector, they certainly will not encourage family members to take over because they know how hard they work. They are last to get time off and last to be paid, and they have very little down time. Many small Irish retail businesses are "living to work" rather than "working to live" and when the present owners retire at 70 or 80 years old, the businesses will close.
On a positive note, people running their own business need to be encouraged because in general they are passionate about what they do. As food for thought, a coffee shop pays 9% VAT and we would gladly pay double that at 18%.
With regard to security, much crime is not reported. The first reason for this is the impact on insurance but there is also no confidence in the judicial system. There is also the threat of litigation and false accusations to consider. Moreover, there is the cost of security staff and the fact that our doors are generally locked. Even with a small business and quiet days, our insurance companies insist that two staff are on the floor at all times. At the front of the shop we are suffering an epidemic of graffiti, so we start our day at that. All shutters now must have ground locks. Working our way through the shop we can consider what we must implement to make a shop secure.
I mentioned litigation. Two jewellers were recently visited by two characters who were checking cases in shops, trying to open them without staff assistance. When they wanted to see the most expensive items in the shop, staff would not open the case, and a day later the owner got a letter in the post from a solicitor threatening legal action because of racial discrimination.
That is the sort of thing we are up against every single day of the week. I personally have been stabbed in the chest, while my staff have been threatened with needles. My father was beaten up during a robbery and died five years later. I have been through it and know what it is like. I am very passionate about what I do, but staying in business for the love of it is not getting any easier. I have been involved in the business for 38 years and given everything I can to it. Last year I took only six days' holidays. One tries to make it as simple and enjoyable for one's customers and staff and oneself as possible, but it is not easy.
I apologise, but I will have to leave soon to attend another meeting.
I thank both delegates for their presentations. As someone with an uncle who was a pharmacist, or a chemist as they were known then, and who also ran the local jewellery store, this combination does not surprise me at all. It must be said my uncle worked in happier times when crime levels were a lot lower.
The role of the pharmacist, about which I know most as a GP, is integral to the health service. Pharmacists are often the first line of contact for patients who come seeking advice. They are respected by their clientele in their communities. They provide an essential service and it is critically important that they be supported. The committee is about business, the cost of doing business, reducing red tape and helping business people to stay in business. The SME sector, of which pharmacists are part, is hugely important to the economy and communities. That is something that is sometimes lost when we talk about the economy, finance and money. The SME sector is about real people.
What the delegates have outlined is very reasonable. They have called for more visible policing and a faster Garda response. They have both raised an issue about the Judiciary which is clearly something we have heard before at this committee, namely, the disparities in the sentences meted out and the awards made by judges. It can be particularly galling if someone breaks into a shop, injures himself or herself and then sues the shop owner. That seems to be a rather inappropriate set-up. The Irish Pharmacy Union's submission refers to tougher sentencing and an increase in the use of public CCTV systems. The latter are improving all of the time and it is something of which I would be very supportive. I would also be supportive of real consequences for those who transgress, particularly if an assault is involved. That is violent crime and needs to be dealt with very seriously. Obviously, Mr. Duggan's personal experience is horrendous. To be stabbed in the chest is something I am sure he will never forget. He has described his family business and the fact that he is still committed to it, despite all of the challenges he faces in securing it, as well as dealing with all of the red tape involved.
Perhaps we might afford the delegates an opportunity to get back to the committee with some specific recommendations that they would like to see acted on. We heard an excellent presentation last week by the Alliance for Insurance Reform in which it outlined many of the problems to which the delegates have also referred, while also pointing to solutions as they saw them. They made concrete recommendations on which we can act by putting pressure on the Government. For example, they spoke about the fraud squad in An Garda Síochána being involved in dealing with false claims. They said that if a claim fell in court, there should be an automatic follow through, with An Garda Síochána investigating to ascertain whether the claim was vexatious in the first instance. If the delegates could come back to the committee with simple suggestions such as that, it would be helpful. I am trying to afford them more time to come back to us with specific ideas. On the issue of tougher sentencing, for example, the Judiciary, rightly, is very jealous of its independence, which makes proceeding in that area difficult. Certainly, the Government is increasing the numbers in An Garda Síochána, from which quicker response times should follow. The main issue is that there should be consequences for the offender. It is great to have the delegates here to hear their views. I ask them, particularly Mr. Duggan, to revert to the committee with specific recommendations. I would like to hear one or two concrete recommendations which could realistically be included in legislation.
I thank the delegates for their presentations. These are ongoing themes, not just in the context of this committee but also in discussions in society in general on the visibility of policing, follow through by the Director of Public Prosecutions to the courts, the leniency shown by some judges, the revolving door and the never ending cycle of criminality. For the professions and trades represented, evidently there are two types of criminal at work. There are those who are at the very end of life in being drug addicts and there are the more professional elements who engage in shop lifting and steal jewellery and so forth. There are probably varying levels of crime which has an impact on businesses, staff and employers.
Will the representative of the Irish Pharmacy Union tell us whether there is any correlation between proximity to drug addiction centres, including methadone clinics in certain areas of the city, and the levels of crime experienced by its members? Is crime more prevalent in inner city and more built up areas? Is the lack of drug support therapies having an effect in the increased prevalence of crime? Mr. Connolly said crime levels had increased by 9% in 2017 in comparison to the levels in 2016. There is obviously an issue in that regard and I ask him to comment further on it.
Delegates also referred to the non-reporting of crime. While I understand people may have lost faith in the judicial, prosecutorial and investigative systems, there is an onus on organisations such as the IPU to encourage members to report crime. The delegates might think that sitting here it is easy for me to say that, but it is important that all crime be reported, even if only from the point of view of having accurate statistics which can show up deficiencies in the capacity to follow up on crime. If crimes are not reported, An Garda Síochána will not have the right statistics and pressure will not be put on the political system to allocate additional resources to policing, as well as the prosecutorial and judicial systems.
Reference has been made to insurance companies. Are they placing additional burdens on businesses, over and above what the delegates believe to be reasonable, in protecting property? For example, are they insisting on there being two staff on the floor in a jewellery shop at all times? Do they expect CCTV equipment and other security devices of a certain standard to be installed?
Perhaps I look at the streets of Ireland in the past through rose tinted glasses, but I remember An Garda Síochána being more visually present. Do the organisations represented link with other business groups or chambers of commerce to make their views known on this issue on a continual basis? I have been talkingad nauseamabout the need for An Garda Síochána to be visually present on streets as visible policing has a deterrent effect. Do the delegates believe things are improving in that regard?
On threats to staff, society is becoming more violent. Statistics show that the number of violent burglaries has increased, as has the number of assaults on streets. A lot of it is due to the new tiger, or whatever it is called now.
Alcohol consumption is increasing, while drug consumption is probably also increasing. What steps do the delegates take when an assault occurs on their premises or there is a violent raid? Do their respective organisations provide support or do they depend on statutory bodies such as the Health Service Executive to provide support such as counselling services?
Ms Ann-Marie Horan:
My pharmacy has been robbed several times. The most recent robbery was probably the worst because it occurred while my children were on the premises. It was a Saturday morning and my husband had just brought them from football. They were in the dispensary and, as such, would not have been visible from outside. The pharmacy was busy at the time and I had my back to the door because I was fetching eye drops for a customer. When I turned around, there was a knife at my neck and someone was pushing me and telling me to open the till. Two men had come into the pharmacy. They were muffled up in the way they were dressed and looked odd. Martina from the credit union next door had seen them walk across the car park and telephoned the police. The customers in the pharmacy had left the premises, but I was too stressed to realise what was happening. I was screaming and had a huge desire to press a panic button. In my mind, I was telling my husband to get the boys out the back door but, of course, the boys came closer because I was screaming. The robbers told me not to press the panic button. We have a panic button on the till and another in a different part of the shop. I opened the till and the second man who had a gun asked my husband for the Z-drugs, valium and so on. My husband said he did not know where they were as he was not a pharmacist. They turned to me again and I pointed out various drugs to them before pressing the panic button. One of the men told the other that I had pressed the panic button and that they both needed to leave. At that, they left the pharmacy.
The experience was extremely stressful and particularly scary because my children had witnessed the entire incident. Although they did not feel physically threatened, they could see that I was being physically threatened and asked my husband if the man was going to hurt their mummy. The problem is that this type of crime can take place at any time in a pharmacy. The men simply walked out of the pharmacy and that was that. They disappeared or perhaps they were caught for a different crime at a different stage.
The back of my pharmacy is fitted with steel doors and windows, while the upstairs floor is rented out to dentists. Two weeks ago someone broke an upstairs window, climbed in and set off the alarm. The person in question was unable to enter the pharmacy but did damage to the building. I would not dream of claiming on my insurance for the damage caused because it provides cover for unlikely, rather than likely, events. If I were to claim every time small amounts of money were taken, I would no longer be able to get insurance cover, which means that we would have to bear the costs of all these events. That being said, the worst part is the psychological element.
Ms Ann-Marie Horan:
They took cash and drugs, although they dropped some of the cash on the way out. The cost of the drugs was relatively low, probably less than their street value. It was not a monetary issue. The problem is the psychological element and the fact that one does not know when it will happen again.
Ms Ann-Marie Horan:
When I opened the pharmacy at 9.30 a.m. on the morning of the robbery, a man who was wearing a baseball cap and dragging his foot entered the premises and asked in a strong Dublin accent for a blister plaster. He was acting very strangely, as if he had a broken leg, and I thought he was about to rob me. I was surprised, therefore, when he handed over €5 and left the premises. However, the pharmacy was very quiet at that stage. The school next door holds Saturday classes, but they had not started at that point. It was the same man who robbed the shop because we saw on closed circuit television recordings that one of the robbers was wearing the same unusual running shoes as the man who had entered the pharmacy earlier who had clearly been casing the shop. It was quiet when he first entered. The robbers did not change their plan when they entered the shop at 11.30 a.m. and found that it was very busy. There were four or five customers in the pharmacy and lots of people walking up and down the street outside. The pharmacy is located in a suburb.
Mr. Daragh Connolly:
In response to Deputy Billy Kelleher's question, as a representative body for pharmacists, the Irish Pharmacy Union offers good training packages for supervising pharmacists on how to train staff and lay out their premises, for example, on where to place closed circuit camera systems and what to do in the event of a raid, which is extremely important. As members will be aware from the experience recounted by Ms Horan - I have had similar personal experiences - no element of training will ever make someone fully compos mentis, as it were, in terms of what to do when faced by someone pointing a gun. However, we do as much as we can to get pharmacists to talk to their staff about what to do in the event of a robbery.
Deputy Billy Kelleher also asked how we helped staff who had been through the psychological trauma of a robbery. We have a link with VHI under which it provides a private and confidential telephone line which any member of the IPU can call to arrange counselling. The matter can also be dealt with by the particular pharmacist speaking to people locally. We know that those who have used the VHI service the IPU provides as part of membership are glad that it is available. Sadly, accessing such a service through the Health Service Executive or the public health system would probably take too long. It is good, therefore, that we can offer this service to our members.
Deputy Billy Kelleher asked a good question about the types of criminal we encountered and whether they were professional criminals or desperate individuals looking for drugs. The Irish Pharmacy Union made a submission in the previous Dáil to the joint committee with responsibility for justice matters. We indicated that we agreed with decriminalisation of the possession of small amounts of drugs. International experience shows that people become engaged in petty crime because they are found in possession of small amounts of drugs for personal use. They then enter the revolving doors of the criminal justice system and are unable to access the health services they need. They are entering the judicial system when they should probably be entering the health system.
To respond to the Deputy's question on the reporting of crime, I have experienced instances of shoplifting and so forth. On one particular occasion, a young couple entered my shop and were in the process of stealing cosmetics from me. In the ensuing altercation I was punched, spat at and kicked by the girl, rather than the guy. I called the police who knew who the couple were. Curiously, one of the gardaí asked me if she could view CCTV recordings for the three hours preceding the incident. When I asked why she needed this material, she replied that it was in case I had said anything to the person who had kicked, spat at and punched me that might have offended her. Despite having 20 years' experience as a community pharmacist in Dungarvan, I had to prove I had not said something which could have offended the young girl who had come into the shop to steal from me. When the case eventually went to court, I was advised by the Garda that the girl would plead to a lesser charge of affray, rather than assault. I asked what would happen if I sought to have her charged with assault - I had been assaulted - but was advised by a garda that I would need to take a day off work and employ a locum pharmacist at considerable expense while I was away from my business for the day. Ultimately, the perpetrator would probably say she had a headache and did not want to go through the trauma of having to see me, which could mean that the case would be thrown out or not proceed.
The Garda told me to take her advice and let her plead to a roll-over charge, in which two or three charges are taken together. She will plead guilty and the statistics will show that a crime has been solved. I do not know if the woman did any time or had to answer for what she had done in my pharmacy on that day. The incentive is not there for a pharmacist because we have to have supervising pharmacists' cover in the pharmacy for us to go to court for something that might not happen at all.
Mr. Jim Curran:
The Deputy raised a very important point on statistics. I do not believe there are any statistics recording business crime and that creates a problem in itself because if one does not know the extent of a problem it is very difficult to come up with solutions. There should be separate recording of business crimes and we have been calling for statistics on this for a number of years because they would help us to come up with solutions.
Deputy Kelleher touched on methadone programmes and clinics, which take place in lot of pharmacies. Are there any risks associated with this? Do statistics show there is a higher crime level in such pharmacies?
Mr. Daragh Connolly:
There is no correlation whatsoever between the crime levels in pharmacies that dispense methadone and those that do not. There are 1,850 pharmacies in the country and 950, roughly half, dispense methadone. In the majority of these pharmacies, the regular patients do not even know that methadone is dispensed there. In isolated or deprived areas where there are methadone clinics in pharmacies, and where patients interact well with a programme, anecdotal evidence is that petty crime levels are lower because people do not use street drugs.
Mr. Damian Duggan:
We were asked what we were doing as regards insurance companies. We have an annual audit and when we renew our insurance, they come in and check everything, from how good our cameras are to the locks and the safes. I moved from one shop 17 years ago to another which had 11.5 mm banded glass in the windows. On the day I moved in a square was cut in the glass to see how deep it was and, that night, the phone lines were cut to see if I had a radio alarm. That is what we are up against. We might think we are ahead of criminals but we are not.
Mr. Damian Duggan:
Yes, they were. I am 99% more likely to be robbed during the day than at night because of the security measures I take at night. Every single night we clear out the windows and clear out a lot of stock from the shop and put it into safes. When a jeweller dresses their shop in the morning, they are putting their stock back out. It takes an hour in the morning and three quarters of an hour in the evening. We are most vulnerable when we are filling safes, when they are open and everything is stacked nicely for whoever wants to come in and rob the shop. The professional will rob the shop during the day because it is far easier as he can get access to everything. Security systems are so good now that they find it more and more difficult to access a shop at night. With our steel roofs, we are virtually a safe.
Mr. Damian Duggan:
Yes, but we also have to try to get ahead of insurers. If one puts in an insurance claim, the insurance goes up automatically. It is like the people who are flooded three times - insurers do not want know them any more. If a person continually puts in claims, it will either be too expensive or the company will not insure him or her whatsoever. I will not put in a claim for somebody robbing a watch, or even four or five watches, because it is not worth my while and I will end up paying for it through my insurance.
Some of the questions I wanted to ask have already been addressed. Mr. Curran called for the segregated recording of business crimes. I have been told by community groups that they feel disheartened about reporting crimes to gardaí but they need to continue to do so. At the political level, crime statistics need to be recorded to identify black spots, etc. If something is brought to my attention I can put down questions asking for the statistics. I also understand there is a person behind the statistics.
Can the witnesses flesh out the points they made about the decriminalisation of small amounts of drugs? This is connected to petty crime. Have studies been carried out into this suggestion? Can the statistics be benchmarked against other areas? The counterargument is that people progress from one form of chemical dependency to a deeper form of dependency.
As part of the action plan for rural Ireland, CCTV is being rolled out in a number of different towns, including in my own area. Have the organisations been consulted by the local authorities about the positioning of these cameras? When I was growing up, banks were the target for crime and there was a lot of security in a bank, although there is not so much now as many transactions take place electronically. There now seems to be a shift towards luxury products or chemicals. Are there differences in the way luxury items and chemicals are pursued?
Mr. Damian Duggan:
We have an issue with cash for gold and, in a lot of house break-ins, silver-plated items have been left behind and gold has been taken. There is no legislation to stop a five year old kid taking his mother's wedding ring and going into a shop to get cash for it.
We met with the Department of Justice and Equality a number of years ago and suggested that such shops offer cheques for gold rather than cash for gold because cheques are traceable and one must have a bank account with a name and address in order to lodge them. A person selling five or six rings to a shop would be traceable. There is a sign in my shop which states that we do not buy gold and that is because there is no legislation governing its purchase or that of other precious metals. All of these points must be considered. Some quite easy options, such as the proposed implementation of the cheques for gold measure six years ago, would have prevented many house break-ins and meant that many jewellers would not have been so easily targeted for what people can very quickly get rid of in another shop.
Mr. Damian Duggan:
Alan Shatter was the Minister for Justice and Equality at the time. Two other representatives and I met his departmental officials and gave them a list of ten items which we recommended for implementation, the first of which was the cheques for gold proposal. They thought it was wonderful. However, we did not receive any feedback after the meeting.
We recently tried to contact the Revenue Commissioners. We have been sending it emails for seven months regarding an idea of ours relating to things being smuggled into the country. It responded to say that a certain person would phone us within the week regarding VAT on imports. If one buys a high-value item anywhere in the world and wishes to have it insured in Ireland, Irish insurance companies will insist on it being valued here. We recommended the imposition of a charge similar to the vehicle registration tax, VRT, whereby one must register one's car when one brings it across the Border, on jewellery, paintings and other high-value items, which would entitle the importer to a registration certificate for the item. If one wished to sell the item, one would have to produce the certificate stating that the duty had been paid, and it could not be insured unless the duty had been paid. That is a very simple way of addressing this issue which would bring in a lot of revenue for the Exchequer. We have sent numerous emails to Revenue but have not heard back from it. If I owed it VAT, I would hear from it very quickly. It is quite disheartening.
Is it fair to say that cash for gold shops are not as prevalent as previously? They were everywhere five or six years ago. Only cash and gold jewellery was being stolen in the robberies of homes or businesses; the thieves did not take silver or plated items.
As regards the cash for gold businesses five or six years ago, many older people sold them very substantial pieces of jewellery in order to get a few bob for their grandchildren. When they realised their mistake the next day, the jewellery had been melted down and was no longer in the country. Mr. Duggan is correct that the industry is completely unregulated.
I ask Mr. Connolly to address the question put by Deputy Neville.
Mr. Daragh Connolly:
The issue around decriminalisation, which is not a process of legalisation, is quite broad. We know that An Garda Síochána is under a lot of pressure to do its job and is up against it within the judicial system. It is a professional law enforcement agency and knows its punters as we know our patients in our pharmacies. The Garda has no legal discretion as to whether to arrest or not arrest a person who has a small amount of cannabis for personal use, for example. When the joint justice committee of the previous Dáil considered how other jurisdictions deal with this issue, it recognised that the system in Portugal works best. The amount of petty crime there has decreased because people are not sucked into a world of criminality. A criminal record for drug use stays with a person for life, and that person then starts to move towards criminality rather than the ordinary life we would wish for people to have. It also diverts people away from a healthcare system because they have been labelled as criminals. That is not to say that people there do not have an interaction with the judiciary but, rather, that they are assessed on medical need rather than by the judiciary. It is a big and complex issue and it is probably fair to say that no jurisdiction has completely gotten on top of it. However, in countries such as Holland, Sweden, Switzerland and Portugal where the healthcare approach has been taken fewer teenagers use illicit drugs and fewer persons die of overdoses or have problem addictions.
I am not a member of the committee but as a practising pharmacist and a politician I am very interested to hear the input of the witnesses. I understood that the cost of doing business is the topic under discussion, so I might make a few general comments on that.
Does crime predominantly affect pharmacies in cities and towns rather than those in rural areas, such as mine in north Kerry? Anecdotally, rural pharmacies are not affected by crime to the same extent as those in towns and cities. Listening to the story told by Ms Horan, I tried to imagine something similar happening in my or any other pharmacy. It must have been an horrific ordeal. Having heard of her experience, I will try to avail of the training that is available for staff because I have not yet done so. Many rural pharmacies would, perhaps, be well advised to take up that offering because an experience such as that endured by Ms Horan would leave a pharmacist and his or her staff very traumatised.
As regards the continually evolving issue of data protection, do the witnesses envisage any problems in that regard in terms of the sharing of CCTV footage and so on to aid the investigation of crime? Could that be an issue for pharmacists and, if so, should that be clarified?
I was struck by how the person staked out the premises in the morning and later carried out the crime. Are repeat offenders responsible for many such crimes? Are the same people repeatedly doing the same thing? Would it be possible for a pharmacists' body or union to consider a general bar on repeat offenders going into pharmacies? Those with a criminal record might be entitled to enter a pharmacy. They may have to make an appointment or similar to do so.
The cost of doing business involves expenses such as insurance, rates, rent, ESB bills, computer systems, backup for the computer systems, packaging and data protection. We were last week issued with letters relating to Garda vetting. There is continual pressure on businesses in terms of costs and there no longer seems to be an opportunity to recover cost.
Is there any sign of a reversal of the FEMPI cuts that were imposed on all pharmacies? I asked a question last week relating to GP issues. Pay restoration following FEMPI for most, if not all, public servants, such as teachers, gardaí, politicians and so on has begun but no progress seems to have been made on pay restoration for GPs or pharmacists. Has any progress been made in that regard or is something preventing that from happening?
Such restoration would prove beneficial because we provide a very valuable service.
Last year, at the IPU conference reference was made to a study conducted in either the UK or Canada on the impact of not having a pharmacy as a first line of care for many people. The study concluded that the payments we receive would fade into insignificance if we did not exist in the first place. That fact should be conveyed. Even though I am a pharmacist I wish to state that pharmacists provide a very valuable service and need more recognition.
In terms of crime, I have closed circuit television, CCTV, operating on my premises. Before installing the system I talked to the publican who runs a business across the road from my pharmacy. I did so in order to ensure that we cover as much area as possible so that if something happens and the criminals park their vehicle opposite his place that we can link in. Have community police linked as many businesses as possible on a street or in an area in order to maximise coverage? If so, the systems would provide enough recordings of the criminal activity to secure a conviction. I shall reiterate the simple suggestions of more visible policing, fast responses and tougher sentencing. I believe we should have more visible policing, in particular. If gardaí patrol the streets then there is less chance of something happening like what happened to Ms Horan. The presence of a garda would act as a preventative measure.
Dr. David Connolly:
My colleague, Mr. Curran, will answer on how much it will cost our businesses to comply with regulations because he has the figures. The Deputy asked a good question about the urban-rural split in terms of one's risk of being a victim of crime. My colleague, Ms Horan, will talk about her experience and repeat offenders. Finally, I will answer his question on the general data protection regulation, GDPR, and CCTV issue and his question about the FEMPI legislation.
Mr. Jim Curran:
In terms of pharmacy compliance costs, the IPU conducted a study last year. A consultancy company called Tonic Consultancy was specifically engaged to consider this matter and concluded that to comply with pharmacy-specific legislation, for Pharmaceutical Society of Ireland, PSI, requirements, cost on average €20,000 per pharmacy per annum. That is an additional cost that would not be imposed on other retail businesses. That cost does not include maintaining computerised patient medication record systems, which cost a minimum of €3,000, as Deputy Brassil is probably aware.
Another big issue is registration costs. Pharmacists must pay PSI registration costs, which are well in excess of the amount charged internationally. In Ireland it costs €3,325 to register a pharmacy the first time yet the equivalent fee in the UK or across the Border is €250. A pharmacist must also register and the typical annual cost is €540 the first time and €380 annually thereafter, which is a significant cost. If one is a pharmacist who wishes to operate a pharmacy business then before one opens the door one must pay €3,000 per year to simply register with the PSI.
Mr. Jim Curran:
The PSI produced the figure but the Minister for Health has the right to change the fee on an annual basis. The PSI has set the fee, which is a high rate. We call for the rate to be reviewed and reduced to the standard international rate. Yes, the PSI set the fee and the Minister rubber-stamped the fee.
Mr. Jim Curran:
The fee was reduced by 5% in 2014 but that was the last reduction.
Deputy Brassil asked about the rural-urban split. Our survey did not specifically analyse the situation in provincial towns. We surveyed different regions and discovered that, on average, 79% of pharmacies nationally were the victims of crime. The figure was 89% in the eastern region, which is a region that is more urban dominated. In the south east we found that 92% of pharmacies were the victims of crime. The lowest figure of 56% was in the north west, next was the midlands at 69%, the mid-west at 84% and the south was 75%. There was not a massive variation in percentages. The evidence strongly suggests that crime against pharmacies is very much perpetrated against both rural and urban pharmacies.
Ms Ann-Marie Horan:
In terms of the robbery I mentioned, I do not know whether the perpetrators were repeat offenders because they were never caught or identified. I know that the perpetrators of previous robberies were repeat offenders because the police recognised them. For one robbery in my pharmacy a guy entered the premises wearing a balaclava and wielded a knife. He moved towards the controlled drugs safe and as he left he asked to shake everybody's hands in the pharmacy. He wore gloves but he said: "You know, Ann, remember to tell the police that I did not hurt anybody." The police said that the perpetrator was in and out of the prison system, expects to be caught and does not want to get a maximum sentence. I mean the perpetrator understands the categories of crime for which he can be sentenced.
Mr. Damian Duggan:
When I was stabbed in the chest during a robbery the guy was eventually caught. He would not have gained access to my shop if he had worn a balaclava. Therefore, he knew he would be eventually caught and charged for some robbery. Two people participated in the robbery during which I was stabbed. The guy who came into the premises behind him wore a balaclava. I learned that on another occasion the first guy had put a sawn-off shotgun in the window of a police car and pulled the trigger but, thankfully, the trigger jammed. The same guy had beaten up an elderly woman in a shop in Sutton during an earlier robbery. He had been caught quite a few times before. He was out on bail when he stabbed me and eventually he was charged for attempted murder.
We did not have to lock the door of the premises where I worked but one still had to be cognisant and to always be on guard. Two people had to man the floor at all times. Even if somebody went into the back office to put a battery in a watch one was always conscious of security. Like Ms Horan said about working in the pharmacy where she was attacked, one constantly feels uneasy and must watch everyone who enters the premises.
I shall recount an incident in which, thankfully, I was not injured. The minute I saw a particular man come in the door of the short I knew I was in trouble. He asked to look at some engagement rings that were displayed in the window. I specifically remember asking him whether he wanted to see rings containing white or yellow gold and he said platinum. I told him that we did not stock platinum rings even though we did. To cut a long story short, I took the cheapest tray of silver rings from underneath the display. It was obvious to me that he was high on something but at the same time one is obliged to serve the customer.
I selected the cheapest tray of rings and placed it on the counter. The tray contained silver rings and a few rings in white gold and cubic zirconia, CZ, rings so they were not highly valuable. The average value of each ring was probably €200. I placed the tray on the counter.
He got two rings. I made a great racket. I actually followed him. A guy outside tackled him. The Garda was called. We got the two rings back. Afterwards the gardaí came back in and reprimanded me because when they searched him, they discovered he had a knife. It was an automatic reaction that kicks in when people try to save their stock. It can be the best-dressed person whom one might think could buy half the stock, who needs to be watched. It is a horrible situation to be in. Obviously jewellers depend on the public to come to their shop but because they are selling high-value items, they must be constantly be aware.
Ms Ann-Marie Horan:
I considered it. The credit union next to me has a buzzer on the door and has people behind glass panels. However, that would be detrimental to how a pharmacy works. A huge portion of my time would be spent on consultations with people. People come in casually and ask for my opinion on something or they might be worried about something. That patient would not come into a pharmacy. People would only come in if they were definitely going to buy something or they had a prescription.
Ms Ann-Marie Horan:
Yes, as well as those who might ask whether one would mind looking at something to ascertain whether they need to see a doctor. We also would lose the personal touch and would lose the consultation. All pharmacies now have consultation rooms so we can spend some minutes discussing a specific concern a patient might have. One would lose all that. A buzzer does not guarantee that someone who is planning on robbing the pharmacy will not come in. A pharmacist who works for me also works for another pharmacy in Clondalkin. Around Christmas a guy buzzed the door at 6 p.m. The staff looked at the CCTV and saw he was wearing a baseball cap but they thought he looked fine and let him in. He had a shopping bag that contained a hatchet. He was looking for money from the till. They had buzzed him in. Nothing guarantees security.
Mr. Daragh Connolly:
Specifically on GDPR and CCTV, I have just upgraded the camera system in my pharmacy. The advice I have been given is that provided I state in my pharmacy that I am using recording equipment and that the person knows or should know they are being recorded in what they do, it does not statutorily affect them that there is a recorded image of them. If somebody comes to me and says, "I am not comfortable that you are recording me", I will then say to them, "Well, you may be more comfortable going to another pharmacy that does not have it." I do not know if there is one. That is my understanding regarding CCTV.
As all pharmacists do, we have a very good rapport with local crime prevention officers and with the Garda in general in local communities. Members of the Garda often come to us to see if we have footage from a previous night. I just let them have it because they have complete access in law to the street-facing cameras that look out at the public. Along with other businesses we help one another. We try to co-ordinate as best we can as to where those cameras are.
Deputy Brassil asked a very good question about the financial emergency measures in the public interest, FEMPI. The headline figure I can give is that pharmacy has given up €2.2 billion since those cuts were introduced. The headline figure of the totality of the cuts that pharmacy has suffered in that time is €3.1 billion. I am very disappointed that we have had no engagement with the Minister for Health, the Department of Finance or any Government officials about the unwinding of FEMPI.
The IPU has offered the Department of Health at least 12 different ideas to make the healthcare system better and to save money for the healthcare system. Sadly we have only been able to advance on one of those, which is the access for patients to emergency hormonal contraception in the pharmacy, irrespective of whether they are public or private patients. That is a great advance, but pharmacists can do many more things to add value to the healthcare system because we know the pinch points are with GPs and in accident and emergency departments. We know we can do much more but it can only be done in the context of paying us properly for what do currently. The pharmacies that are most affected by the FEMPI cuts are not the pharmacies on high streets or in affluent areas; they are the pharmacies that are needed most by those local communities that have difficulty in accessing healthcare, namely, rural pharmacies, pharmacies in deprived areas and pharmacies in isolated areas.
I would love to be able to tell the Deputy that we were engaged in a process about the unwinding of FEMPI, which we have been promised and which exists for all other people whose take-home pay was cut by FEMPI, but it has not happened yet. We are hopeful because the Minister has promised we will have an engagement before the end of the year.
I know from dealing with the GPs that they have an issue around restoration and then they will talk. We are not at that point. We are at the "Let's talk" stage and in whatever negotiations need to take place, we will certainly engage with the IPU.
Mr. Daragh Connolly:
Some 75 million prescriptions are dispensed every year. There are 96 million interactions between Irish people and their pharmacists. On average people see their pharmacist 13 times a year. As community pharmacists, every day we listen to people who are hugely frustrated at not being able to access very simple healthcare. We have come up with really good ideas which are only a reflection of international best practice that can save money and increase access to healthcare, which then has the downstream effect of not making things more complicated later on where we can actually deliver. It is hugely frustrating that we have not got the traction that we believe Irish patients deserve.
I apologise for being late coming in. Sometimes other committees are scheduled at the same time. I was in another committee room next door.
I have read the submission. I am shocked to hear of stabbings and knives being held to people's necks. I cannot believe it is that bad. I come from a rural constituency in County Mayo and have not heard such reports. That type of crime may be more prevalent in some of the cities. However, I have certainly heard of the theft of goods from many local pharmacies. It is a daily or weekly occurrence that cosmetics, fake tan and other things that are quite expensive are stolen. Unlike in clothing shops, in a pharmacy it is not practical to put a security tag on everything. Are State supports available to help pharmacists prevent against these things and protect themselves? Does the IPU offer any supports? I know it has made submissions about more visible policing and tougher sentencing, with which I agree. Can the pharmacy community do anything for itself, on which it might need help, to try to protect premises from these occurrences?
Do the witnesses believe the increase in crime against pharmacies will discourage people from entering the profession? Would they advise their sons and daughters to follow in their footsteps and take over if they have had a very difficult time in running their business? Will it impact on future service?
Mr. Jim Curran:
We are not aware of any State supports for protection equipment and putting systems in place. The IPU provides advice and support for our own members. We have a security pack that is available to all our members.
It comes back to Deputy Neville's earlier point in that we encourage our members to also report crimes to us in order that we might assist them. We often have representatives on the road who visit pharmacies and provide advice. It is a two-pronged approach, providing advice and going out externally in an effort to support pharmacists on the ground. We are not aware of any specific State support which is available.
Ms Ann-Marie Horan:
Yes, I believe it does have a negative impact on pharmacists wanting to work in pharmacies and perhaps even on people becoming pharmacists in future. It is now harder for pharmacists for find locums. A higher proportion of pharmacy graduates do not want to work in community pharmacy and are working in hospitals and industry. This is not the only reason but it is a factor for it being a less attractive career than it was. My children would not think positive things about pharmacy after that raid.
Mr. Damian Duggan:
I am a trained horologist. I have a trade, I do all my own watch repairs, jewellery repairs, valuations and so on. It is still very tough in retail, which is due to a combination of many things. There are all the overheads, to which the robberies and so on are added. I have two sons, 21 and 17 years, and I would not encourage them into this business in a million years. I love it and am passionate about it but between online shopping, things being bought abroad and generally how tough retail is, if it was not for the services that I provide, I would be gone as a retailer a long time ago. I do not see a future for my lads in that trade.
Also, as I said earlier, I had six days holidays last year which was split over three weekends. I work six days a week. I am the secretary treasurer of an association that supplements my income. It is not easy. There are issues with banking. We are told that banks are giving loans to small and medium enterprises but as far as I am concerned that is rubbish. I say that because banks are removing overdraft facilities from businesses, putting them on term loans and calling it new business. They are telling politicians that they are doing new business with small and medium sized enterprises. The banks are doing nothing for us. I own my own property but were I to walk into a bank tomorrow to ask for a €20,000 loan, I guarantee I would be refused, even though I have very good stock and a healthy business I am running at a profit. It is not a huge profit but it is a healthy business. There is no money out there to be lent to small retail businesses. Everything is smoke and mirrors as far as I am concerned, and I hear this across the board, not only among jewellers. I have a friend who runs a hardware store. It is a family business which has been around for over 100 years. When he leaves, which will probably be in around five or six years, that will be the end of the family business because he would not have his daughters or his son go into it. That is a really sad reflection on retail. When we are all gone, people will scratch their heads and say there are no more retail business around and will ask what happened. All they will have is big superstores or online shopping. There will be no service industry whatever.
Mr. Jim Curran:
To return to what Deputy Lisa Chambers said on State supports, the point needs to be made that while there is no direct funding support, the results coming back from the crime prevention service have generally proved to be very good and positive, according to members. Some 80% are aware of the service and about the same percentage of members use it. Perhaps more should be done on that area, where one has a service that appears to be good. Some members in different areas have said that the crime prevention officers, CPOs, are fairly thin on the ground but if the service is good, it should be looked at. It would be a positive move to have more CPOs available and more interaction with them.
Mr. Daragh Connolly:
Yes, plenty. From a continuity of supply perspective, 60% of medicines on my shelf or that of Ms Horan are made, labelled or boxed in the United Kingdom. Overall, 80% of the drugs in our pharmacies are transited through the United Kingdom, so there is an extra 20% on that figure. We saw that the snowstorm at the beginning of March caused a huge disruption in the delivery of everything but unfortunately people seemed to be able to get bread more quickly than they could get medicines. The supply chain is very fragile because it is so lean. Because of the FEMPI cuts imposed on us, we cannot hold the stock. FEMPI cuts were also imposed on wholesalers who now no longer hold two weeks or a month's worth of stock, stock is now measured in days. We have considerable fear in respect of Brexit regarding the continuity of supply. There is a broader question of how it will affect the economy but specifically from a pharmacy perspective we are very worried, first about continuity of supply and second, that as the only English-speaking member of the European Union, we perceive much of our product here as being overspill from the UK market. As the only English-speaking member of the EU the cost of medicines will increase if it costs more to do business here, relabelling and repacking medicines for another jurisdiction.
Mr. Daragh Connolly:
It is another issue of which we must be conscious. We have a very good rapport with our wholesalers. It means there are extra checks and balances around that to make sure that all the stock that is ordered arrives and that any discrepancies are alerted very quickly. There are also very lethal controlled drugs in those vans, as they go around the country.
On another thing to note on Brexit, I qualified in the United Kingdom and came back to Ireland to practice. It was seamless to do so. We know of 60 to 90 Irish undergraduates who are studying in the United Kingdom each year. We need to know that those early career pharmacists will be able to practice pharmacy in Ireland.
Mr. Damian Duggan:
One can look at Brexit both ways, as a negative or positive thing. We have asked our members to look inward at Irish manufacturers and to encourage young Irish people to develop products we can sell rather than looking overseas. We are also looking to Germany and France and similar places where we hope we can develop a good relationship. There will be implications. One thing about which we are quite positive is a border.
Mr. Damian Duggan:
Yes, if there was border and VAT was collected when people returned to the country, we would be happy with that. The Chairman was talking about crime, we think it is a crime that we are paying 23% and they are paying 20% when they go across the Border. That is a small charge but one should also take into account that the overheads for running a business are much less there than they are here, with rates and everything else.
It can be flipped both ways. There are a lot of negatives. We have many educational things which happen in the UK, but we are also trying to do many things here ourselves now. Overall, it will not be as bad because we are a member of the EU.
The area of SMEs and the challenges of doing business in Ireland is something for which I have huge passion. I can associate entirely with what Mr. Duggan said about his children and whether he would let them consider going into business.
What I have learned since becoming a Senator is that in Leinster House we talk the talk but the rubber does not hit the road. I would welcome a comment from the witnesses on those issues. I apologise in advance if they have already responded on them.
Following on from research on the small and medium enterprise sector, which is being conducted at my behalf, what I am hearing from the SME sector is that the key issues for it is the cost of doing business, insurance, rates and access to finance, which as already mentioned is a huge issue. It is not true to say that the finance is available: it is not. The terms and conditions to access finance are practically impossible to meet such that a person would have to sell his or her soul to get it. In the Celtic tiger era the banks were making a margin of about 1.5% over prime. Now, that margin is between 3% and 4%, which means it has more than doubled. There is little or no talk about this. I would welcome the witnesses' comments on the issue and also on staff recruitment.
Mr. Connolly mentioned that pharmacists are going elsewhere, as is the case with every industry in the SME sector. As the larger companies can offer better terms and conditions they are cherry-picking graduates in advance of their going into small businesses. According to the statistics, there are 248,344 SMEs in Ireland, which between them employ approximately 1 million people, which is a lot of small business and a lot of employees but we are still behind the curve from an EU perspective. The EU Commission strongly supports SMEs. In Ireland, we have been behind the curve in this regard.
At a meeting last week with the Department of Business, Enterprise and Innovation the officials set out what they are doing, particularly in regard to Brexit, and two or three weeks ago they sent documentation in this regard to all Deputies and Senators. The Department is being very proactive but we need a lot more of it. I am very concerned about the future of the pharmacy industry in Ireland, for a couple of reasons. Owing to consolidation, small pharmacies are being squeezed out. A couple of weeks ago a large Dublin pharmacy announced its plans to further consolidate. It is becoming tougher for small operators to do business. They cannot buy in bulk and get the same discounts as the large operators. Many of the UK pharmacies are setting up here. I would welcome a comment on whether Brexit will impact on the large UK pharmacies based in Ireland remaining here, if the cost of doing business will increase and if it will affect smaller operators. I think it will have an effect on small operators. The online pharmacy sector is also making it difficult for smaller operators to do business. I would welcome the witnesses' thoughts on this issue.
As the witnesses will have noted, I am very passionate about this area. We regularly introduce legislation in the Dáil and Seanad which has serious unintended negative consequences for SMEs. I ask that this committee do some work on the effects of that legislation on small and medium-sized businesses. I have been a Senator for two years and as far as I am aware there has been no discussion on the effects of various pieces of legislation on SMEs. I am involved in this space and my business has been hit many times with an tsunami that has screwed it up. If some my of questions have been already answered the witnesses need not respond again if they do not want to.
Mr. Damian Duggan:
On the legislation, I had a lady working for me for a few years and she informed me that she wanted to take two years out for carer's leave. At the time, I did not know anything about carer's leave but I learned that I was legally obliged to allow her to take it and I also had to keep her job open for her. As such, I could not offer her replacement permanent employment. As this lady was expecting a baby, she also took a break in carer's leave and went on maternity leave and was out of the shop for three years. She did not come back and, thankfully, I had staff in place that I had trained, as I had trained her. Legislative provisions such as this do not serve small business. It may be suited to the Civil Service but not a small family shop. It does not make any sense.
On SMEs, the agriculture sector is represented by a Minister and two Ministers of State. There is nobody representing retail in Ireland, which is a crying shame.
No. There are three Ministers with responsibilities in this area. Deputy Heather Humphreys is the line Minister for Business, Enterprise and Innovation and the Ministers of State, Deputies John Halligan and Pat Breen, also have responsibilities in this area. It is not true to say that there is nobody representing this area.
Mr. Duggan might not be seeing it on the ground but it does exist. In the course of our discussions on the cost of doing business in Ireland we have had discussions with officials from Enterprise Ireland, IDA Ireland, the chambers of commerce, InterTradeIreland, the Hotels Federation of Ireland, the Restaurants Association of Ireland, Insurance Ireland and the IFA. The organisations here today have brought something different to the discussion. We have heard so much about the cost of insurance, rates and the difficulties around staff recruitment but today we have heard something different from the jewellery and pharmacy sectors, which we welcome. It is incorrect to say that there is no Minister representing this area: there is.
Mr. Daragh Connolly:
I thank Senator Ó Céidigh for his excellent questions. The recruitment issue of which he spoke has been already addressed and the consequences for SMEs has been handled nicely by Mr. Duggan. I will speak to the make-up of community pharmacies, the ownership of same and on Brexit.
I am a third generation pharmacist. My grandmother qualified as a pharmacist in 1925. She should have qualified in 1922 but there were a few things going on in the make-up of our State at that time. Every generation of pharmacists, retailers, businesspeople and entrepreneurs have to develop new ideas to suit the new circumstances in which they find themselves. I am very proud that pharmacists are entrepreneurs. We use ingenuity and our business practice. What we use most is the rapport that we have with our patients in our communities. The most liberal laws around the ownership and operation of pharmacies in the world are in Ireland. Anybody can open up a pharmacy anywhere. Across Europe a pharmacy may only be owned by a pharmacist and he or she is only allowed to open a pharmacy in an area where there is a demonstrable need for such a service. As such, in terms of investment in a community that does not have a service, a pharmacist would have security of tenure. We have none of that in Ireland.
Senator Ó Céidigh spoke about international ownership of pharmacies in Ireland.
Interestingly, international ownership sits very well with the ownership model that Ms Horan or I use, whereby we own our own pharmacies. Looking at the statistics around pharmacy ownership in Ireland as reflected in our membership, roughly 15% of pharmacies are owned by public limited companies, plcs, which probably have an international flavour. The committee members will probably know what firms I mean without naming them. Some 85% of pharmacies are owned by people like Ms Horan and myself or our families. Believe it or not, I actually think that is a good mix. The Irish Pharmacy Union, IPU, represents all types of pharmacies with all types of ownership models. I am very happy to be the president of an organisation like that because I think we can speak with one voice to legislators here in Leinster House and to the Department of Health when it comes to driving change.
I will be very specific about the question of what we can do to adapt. A pharmacist can pick up the phone to the Irish Pharmacy Union and speak to Mr. Darren Kelly, a colleague of Mr. Curran. Mr. Kelly will come to the business and carry out a retail review. He will start out on the street and go from the front door to the back door. He will look at the books and advise that the business needs to do more of this and less of that, or to move particular products to a certain area of the shop. Mr. Kelly does three of those reviews a week. He is very busy with that and there is a huge uptake. When we run courses on management and on how to be a better retailer we see a huge uptake on the part of community pharmacists. There is still an ingenuity there. There is a spirit of entrepreneurialism and of not giving up.
In luxury items such as perfumes, we are starting to see a leakage to online purchasing, or purchasing in airports where customers do not have to pay VAT. We have to suffer the consequence of that. I will not go into that, because I am sure it has been addressed by other witnesses who have addressed the committee. Those retailers do not pay rates or VAT. Nothing comes back into local communities like Ms Horan's and my own. It can be very frustrating when someone comes into my business with a broken bottle of perfume to see if I will swap it for a new one when they bought the bottle in the duty-free in Dubai or wherever they were. To answer the question very specifically, we are certainly under the pump, just as everybody else is. That is particularly the case with the Financial Emergency Measures in the Public Interest Acts, FEMPI. We have no vision of when they will be unwound or what unwinding looks like. It is hugely frustrating to be asking for the ability to add value back into the system when we do not get a reply from the Department. We have put 13 different proposals forward and we have not had meaningful engagement on any of them bar one. We are frustrated, but we are here to tell the committee that we can do more. We can add more back into our communities from a business perspective and from a healthcare perspective.
The Senator is probably correct. I will not go so far as to say that I am speaking off the top of my head, but I would say the Senator is correct. We have data, because we do an annual review of the sector in which anonymous data is collected from sample groups of pharmacies. I think Senator Ó Céidigh is probably right that particular brackets or pharmacies of a particular size may be coalescing around a different turnover model than Ms Horan or I might have. The locations where those pharmacies are found might be a little bit different. However, that is not to say that one is better than the other-----
Mr. Daragh Connolly:
We can get those figures for the committee. The Pharmaceutical Society of Ireland is the regulator of our profession. As such, it maintains statistics on pharmacies opening or closing more than we do as a representative body. We will certainly get those figures for the committee.
Mr. Daragh Connolly:
Given how hard it is to have a business and the lack of security of tenure, so that somebody who is getting cheaper money could open a competing business at any stage, we are starting to see that where a pharmacist in a rural or semi-rural area retires, there is less chance of that pharmacy changing hands. We know that where pharmacies are likely to open is not where the healthcare need is highest. It is where the footfall is highest. Pharmacists make a living and get a return on investment on products that are not bought by people who do not have the consumer spend seen in more affluent areas. We will see what is termed "honeypotting".
Ms Ann-Marie Horan:
In the last few years, when there has been a recession, people take a punt and open pharmacies where there are vacant units, because it is much cheaper for them. I know pharmacies that have set up and have operated rent-free for three years, which is putting pressure on the people-----
A lot of local authorities have tried to encourage small and medium enterprises, SMEs, and small retailers to open. Concessions on rates and so on were given where a lot of units closed. We cannot knock that. I can understand the witnesses' point of view, but the local authorities were just trying to encourage business, especially in inner cities and towns. It is important that the main streets are not empty. I can take Ms Horan's point. A pharmacy may be there for a long time, doing all the hard slogging, when somebody sees it is doing well and opens beside it. That is the nature of business.
Can I ask one final question? I have listened intently, and I have been very much educated on these issues today. The witnesses spoke about the recession and the last five years. What positive developments have the witnesses seen in the industry during the last five years?
Mr. Daragh Connolly:
We see an increased consumer confidence. I think it is safe to say that the worst is over, but the retail trend has changed. People, rightly, are much more discerning on what they will buy, and they are much more conscious of the value of their own money. I see in my own business that what is most important now is the added value. Where does Ms Horan's pharmacy or my own add value for the patient or the customer? We see the most growth where we give most advice, either as pharmacists or through our trained staff, be that in beauty, cosmetics, nutrition or the different services that we offer. I am glad to see that there is recognition of a high quality of service. It is just not about penny-pinching and everything being cheaper. That is a more realistic foundation on which to build retail. However, we need the help of legislators when it comes to taxes and rates not being effective on the online businesses that are crucifying us. As the committee will know from other retailers, if I display a bottle of perfume with the tester attached, somebody can come in, smell it, and decide to buy it for €2 less online at home.
Mr. Damian Duggan:
Certainly, in terms of online business we are seriously struggling given that we pay 23% VAT and online businesses pay nothing. If one buys a watch for €500 and one is saving 23% VAT, that is a huge saving. People are coming in and taking photographs of our stock, buying it online and then coming in and asking us to adjust it for them. That is happening every single day of the week.
Yes, but I still believe if I were to buy a Raymond Weil watch in Geneva, for example, that I would pay the VAT that would be charged there, even if I bought it online, but I would not pay any duty when it comes into the country.
Mr. Damian Duggan:
Absolutely. We do a huge trade after Christmas in adjusting rings and watches that are bought online. That is one positive, but one does not make an awful lot of money out of it and it is very time consuming, but we do it because it is trade that we need. It is very disheartening when one sees the amount of trade one is losing on regular customers. When Dad was alive we used to watch the people from the local ladies' clubs getting onto buses and going across the Border to buy all their items and then they would come back and ask us for a battery for something or whatever else. We saw that every year for many years. It is not as bad now but people drive up now instead of getting buses, but that is the way it is.
That is the case, regardless of whether it is clothing or whatever else. We have heard that people go into a shop and try on clothing from a certain brand and then they go online and buy it. I think that goes on in every country. There is not an awful lot that we can do to prevent it happening.
Mr. Damian Duggan:
We would love to engage with Revenue and see what way we could work together to do something about legislating for goods coming from abroad. It is also very disheartening to see the likes of An Post setting up a company in the North so that goods can be posted to there and then brought into the Republic.
Mr. Jim Curran:
Our discussion is on businesses locally. Our sector contributes more than €2 billion to the local economy. That is creating jobs and it has a multiplier effect. If everything that we are talking about here today negatively affects smaller businesses such as pharmacies and jewellers it will have a wider effect across the board in terms of employment and sustaining local economies, in particular in smaller rural areas. As my colleagues said here today, it is the smaller rural pharmacies and those in disadvantaged areas that are struggling the most but they are the big contributors to their local areas. There are no post offices or banks locally. The fear we have is that-----
If there is nothing further I thank the witnesses for coming here today to engage with the committee. It was a very informative session. We have one more meeting and then we will produce our document. When we launch it we will invite the witnesses back if they would like to attend.