Billy Kelleher (Cork North Central, Fianna Fail)

I have been listening to the debate and the contributions from Deputies on all sides of the House. There is a broad welcome for the provisions in the Bill. I have strong views in that I would have supported the retention of the groceries order. This is not necessarily because the order, as it was, functioned perfectly, but I felt it should have been retained until such a time that we had legislation indicating what would occur after the order's abolition.

I was concerned about the revoking of the order because the Irish retail market has changed substantially in recent years. There have been large changes, with multiples coming in and own brand products being sold on their shelves, and the investment being made in the small retail shops around the country should be protected. In any part of rural Ireland one can see small retail units being developed and forecourts being built, which is a positive development. We should encourage and foster such action to ensure local economies remain vibrant. That is a positive development and something we should foster to ensure that local economies remain vibrant, so that people have access to butchers' shops and petrol and so that money made locally is spent locally. Notwithstanding rural development policies and decentralisation, we should encourage the small shops that exist in almost every village and town, in which their owners have invested substantially in recent years. I was concerned that the abolition of the groceries order would have a negative impact on them, but the legislation as published gives me comfort in that regard.

It is an accepted fact that multiples have abused their position in the retail market for many years. The Competition Authority, whether it was unable to do so because of a lack of legislative back-up or some other reason, has failed to stop that. The use of hello money and advertising budgets to sell below the net invoice price has been widely known to have taken place in the retail sector for many years and nothing was done to address it. The multiples will say they were operating within the law and were passing on price cuts to consumers but that is not true. Below net invoice pricing was not allowed under the groceries order, but advertising budgets and hello money contributed to their profits and could not be passed on to consumers. The Competition Authority did not explore this abuse of position. The legislation will work if the Competition Authority is given teeth and has the resources to allow it investigate any abuses that may occur.

The changes that have taken place in the retail sector are amazing. In recent years we have seen 24-hour shopping, large multiples and huge investment across the country. That has happened against the backdrop of an increasing population and our new-found prosperity. The range of products available to the consumer has also increased substantially.

One area of concern which I do not know how to address is the way multiples give their own brand products preferential treatment on the shelves. That could stymie innovation and the development of small, indigenous, cottage-style companies, such as those producing yoghurt or cheese. Own brand products are more profitable to multiples than providing shelf space for other products. I know of cases where dominant shelf space is provided for a multiple's own brand and other products are relegated to the back of the store or less accessible places, which has an impact on businesses' ability to access the market. I do not know whether to address this by legislation or by empowering the Competition Authority.

There is a cap on the size of supermarkets. As we and our infrastructure develops I am concerned that large multiples will become involved in selling petrol, insurance and almost everything else, and that by stealth we will have the hypermarkets that have caused problems in France and elsewhere. People will drive large distances to hypermarkets, taking money out of the local economy and preventing further development and investment in retail in rural Ireland. Instead of doing a weekly shop people travel large distances to do a fortnightly or monthly shop, spending large amounts of money in the process. That might sound like a great idea in the short term, in that it might provide competition and cheaper products to the consumer, but in the long term, as in other countries, the local economy suffers retail closures and suddenly there is a vacuuming of money into certain multiples.

Let us be under no illusions, the multiples are not here to service the community but to make a profit. There is nothing wrong with that but we have a duty to ensure the retail sector is regulated to foster competition and protect a very important part of Irish social fabric, namely the small corner shop or little forecourt in the villages and towns throughout rural Ireland.

The Minister made reference to the existence of ghost towns in Britain because there is no groceries order. Some would agree with the Minister but others would say he was factually incorrect. In my experience of driving through France I have noticed that, in many areas, the small shops and bakeries that were traditional in that country have gone to the wall in recent years. In some villages in the southern part of France one can travel for miles without finding a shop where one can buy the weekly household provisions. We should be conscious of that and keep an eye on the position here.

The consultation process undertaken prior to the Minister making the decision to revoke the restrictive practices order was broadly based and wide-ranging. The main players, however, had made their mind up prior to the process even beginning. The outcome would probably have been the same but it did not give the process the credibility it deserved. The process should have invited submissions but it was regrettable that the major players commented prior to it commencing. People who genuinely believe the groceries order should be retained, not for profit motives alone but for the protection of the small shop and forecourt, felt involved in a process where the decision had already been made. We should address that if we initiate a consultation process in the future.

The technical detail of the Bill is straightforward. Its purpose is to deal with anti-competitive practices such as predatory pricing. Another important part of the Bill addresses the dominant position of multiples, not just nationally but locally. Even in a population of 4 million it is important to regionalise markets and examine dominant positions within local areas. Below cost selling, as referred to by many Deputies, happens for many reasons. For example, a trader might advertise a price cut to get publicity in a newspaper and suddenly customers will come into the shop. Predatory pricing, however, to kill off competition also exists and it remains to be seen if the Competition Authority has the ability to deal with this under the legislation.

I wish to address the long-term prospects of the Competition Authority. The authority did not have the stomach to take on certain institutions over the years. Reference was made to financial institutions and reports and anecdotal evidence suggest that for years there has existed some form of monopoly. I do not know at what level it operated but I learn from people in the banking industry that the two main players, the AIB and the Bank of Ireland, were involved in a false war of competition, whereby they put on kid gloves and appeared to the public to be boxing with each other. Behind it, however, there was no effort whatsoever to engage in healthy competition for the benefit of the consumer. Only in recent times, since Bank of Scotland Ireland and others have entered the market, have we seen the beginning of genuine competition in the financial sector. The Competition Authority failed to address that. It chased a few farmers around County Louth and elsewhere, yet huge financial institutions were not forced to engage in any form of competition because a corporate gentleman's agreement was reached between the two major players not to undermine each other in a manner that would be healthy for consumers.

There have been references to Dunnes Stores, Aldi and Tesco, all of which are welcome. A greater concentration of multiples may develop as the market grows and companies such as Wal-Mart are looking around. The current cap on retail space has been a positive development and should not be removed. Any question raised with regard to its retention deserves a focused debate because, while the Ikea development was sanctioned, we could face a dangerous route of hyperstores and large multinationals which would bring short-term gain to consumers but long-term pain to local economies.

The general thrust of the Bill has been widely welcomed, although some in the Opposition do not share that sentiment. I am not sure whether the latter are for the retention of the groceries order as it was, the Competition (Amendment) Bill as it stands or some objective in between. As someone who supported the intention behind the groceries order, I think it failed in certain areas, particularly in terms of advertising budgets, hello money and the fact that net invoice prices were not passed on to consumers.

If we are to ensure a healthy and vibrant retail market, we cannot simply pass legislation and hand it over to the Competition Authority but should monitor events on a continuous basis. A mechanism should be developed within the Department to keep an eye on trends in the retail sector and to ensure that the aims of this Bill are achieved on the ground. If, due to a lack of resources or legislative support, the Competition Authority does not have the ability to address problems such as predatory pricing, we could then immediately resolve these issues.

Agencies like the Competition Authority should be accountable to this House and should be obliged to appear before committees on a regular basis. By making these matters a reality for the politicians who enter the Dáil to pass legislation, such an obligation would represent a positive development. Statutory provision could also be made that agencies make reports available to Oireachtas committees on a frequent basis. Over the years, the Competition Authority appeared before various committees, during which time the issue of banks and financial institutions were to the fore in terms of public representation.

RGDATA had significant concerns on the removal of the groceries order but has given a guarded welcome to the legislation. I hope and trust the aims of this Bill will be met. In the event of the authority's inability do deal with anti-competitive practices, we should be expeditious in addressing the issues, even if that requires that further legislation be passed. I also give a guarded welcome to the broad thrust of the Bill but will wait to see whether it will provide a healthy retail sector without forcing out the small corner shops which have formed part of Irish communities for many years. We may be emotional about the matter but the reality is that small shops the length and breadth of the country provide families with incomes and a great deal of part-time employment opportunities. Some have sponsored local football or soccer clubs and, while others have not sponsored any clubs, all are part and parcel of communities. They should be given every encouragement because they answered the call by making major investments in their facilities.

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