Phil Hogan (Carlow-Kilkenny, Fine Gael)

I remind the Minister that I would like to see discounts and rebates being passed on to consumers. The Minister had the opportunity to receive many submissions on the matter and to produce a report, but there is nothing in the report to suggest that such practices are happening or to indicate what the Minister intends to do about them. The problems in this regard again cause me to highlight my difficulties with the performance of the Competition Authority. In this area, as in many other areas, we are legislating in a vacuum because the Minister has not provided the evidence and key information that would allow policy makers to make informed and accurate decisions about the consequences of legislation for key sectors and consumers.

Fine Gael, in advocating a review of the groceries order, which has been in place for 17 years, called on the Government to put legal mechanisms in place to ensure that discounts and rebates are passed on to consumers, rather than ending up in the pockets of retailers.

In the retail grocery sector most of the key players deliberately and consciously obscure and conceal from public gaze information about their profitability and turnover. We have no information on the profitability of the multiples and no details on their turnover, and there is an absence of information to enable us determine whether they are making super normal profits through the maintenance or retention of these discounts. The Minister has a blind spot about this issue and has failed to tackle a vested interest to get them to reveal their profitability and their margins so that we can assess whether the discounts are huge or small or whether they can be passed on.

In a reply to a parliamentary question I tabled last year the Minister steadfastly refused to take measures to compel these companies in the context of amending the Companies Acts to reveal their profitability. I am puzzled as to why that stance continues to be maintained particularly given concerns expressed by the consumer strategy group and the national consumer agency about the absence of this information. Perhaps in the course of his reply to this Second Stage debate the Minister will enlighten us as to whether he has changed his mind on this issue.

There is one body that has the power to get all this information, the Competition Authority, but it has failed to do so. Its inaction has done Irish consumers a further disservice. The national consumer agency is conducting a campaign about giving consumers information. Details on the profitability of large retailers is one aspect of information that Irish consumers are entitled to receive and the Minister should stop protecting them.

I have particular concerns about the legislation presented on the basis of what it says about predatory pricing. This is the nub of the matter and an important aspect of the legislation. The Minister has consistently stated that existing competition law is sufficiently robust and appropriate to deal with the issue of predatory pricing. I presume he has a legal opinion from the Attorney General who changes his mind regularly and has done so recently. He changed his mind yesterday on one piece of legislation. He reversed engines completely on the issue of imposing administrative fines in connection with one Bill. It seems it can be done now whereas it was unconstitutional a few months ago.

On the issue of predatory pricing there has been no decision by the Competition Authority or the Irish courts to date under the Competition Act 2002. I do not know how the Minister can give assurances that existing competition legislation covers predatory pricing. We have no case. We are depending completely on EU law so that it is untested in this jurisdiction under the Competition Act 2002. How can the Minister make that assertion?

According to my legal advice, having regard to case law, the provisions of the Competition Act 2002 do not provide sufficient protection for retailers in respect of aggressive pricing tactics for two reasons, first, the difficulty of establishing dominance, which is a complex economic and legal exercise. Given that only one of the multiples in the grocery trade, the largest player in the market, has a share of 25%, that is a long way from what is defined in the Competition Act 2002 and interpreted by the Competition Authority as dominance. Its definition of dominance in the newspaper trade is 65%, yet it was not regarded as dominant in the Drogheda Independent case.

See this speech in context