Phil Hogan (Carlow-Kilkenny, Fine Gael)

The second reason is the question of proof required to establish predation. I have been advised that cases on predatory pricing may give rise to huge costs for any supplier or customer advocating a case to the High Court in regard to predatory pricing. Who will take the risk of putting themselves out of business by the evidential burden of costs or by losing customer share, if they lose the case, by aggressive tackling on predatory pricing? It is a big problem for a person to take on a case as it is very expensive and is likely to continue for two or three years. My advice is that there is a logical inconsistency in the approach adopted by the Minister in the Bill. He is prepared to accept that certain activities, such as hello money, unfair discrimination and resale price maintenance are not appropriate in the context of issues that came under the groceries order and that he wishes to put into the Competition Act, which come under threat with section 15(5), but he is not prepared to do the same in regard to predatory pricing. The question is why.

In response to a direct question on whether the Competition Act 2002 provides a sufficient safeguard against predatory pricing in the retail grocery trade my advice is that it does not stack up for the following reasons. It does not provide a sufficient safeguard because there are significant difficulties in establishing predatory pricing, in particular in terms of the definition of what is predatory pricing. One would require extensive economic evidence to establish in any given case whether the pricing is predatory and to obtain that evidence extremely extensive discovery would have to be made. There could be no certainty of success given the case law in this area and the very small number of cases that have successfully established predatory pricing in the context of EU law. Linked to that is the difficulty of establishing the dominance necessary to make predatory pricing unlawful. It is a difficult area. The Minister is incorrect to suggest, therefore, that existing competition law adequately covers the issue of predatory pricing. It is clear that existing competition law does not present a viable or practical means of addressing predatory pricing activities by large multiples in Ireland. That will be an issue of contention on Committee Stage.

It is clear that amendments will be needed on Committee Stage. My primary concern is that the Bill will merely serve to increase the powers of the big players in the market to the detriment of consumers, the food industry and the independent retail sector. It will do so in an atmosphere where there is no transparency on performance of pricing and where there is no effective block or check against the excesses or abuses by these significantly large companies in the local marketplace. The Minister must recognise there is a wide body of opinion in the House, including on the Government backbenches, and outside the House that recognises the need to ensure fair competition and that all consumers can have the benefit of low prices, selection and diversity in retailing.

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