Michael Ahern (Cork East, Fianna Fail)

The Deputy claimed he will support a facility which will allow discounts and rebates to be passed on to consumers rather than putting the money into the pockets of retailers. While this view is commendable, he later rejected the provision of the Bill which will have precisely that effect. The Bill removes the incentive for the trade to operate a system of discounts and rebates in the first instance. The Deputy has asked the Minister to indicate what part of the legislation will ensure that consumers will be able to access such discounts and rebates in future. He cannot have read the Department's report if he asks such a question. The part of the Bill the Deputy seeks is section 4(1) which reads: "The Restrictive Practices (Groceries) Order 1987 (S.I. No. 15 142 of 1987) is revoked". The order encouraged and facilitated off invoice discounts and specifically prohibited retailers from passing them on to consumers. Getting rid of the order is a major step towards getting rid of that problem but evidently the Deputy did not draw this conclusion.

Deputy Hogan is also wrong to state the Department's report indicated there was no evidence that the abolition of the groceries order would lead to lower prices. I will cite the report to clarify this matter. It states:

We would expect that the impact of the resulting competition in the market would be to bring about decreases in the retail prices of goods covered by the Order.

However, we don't believe that it is possible to predict in any meaningful way the precise extent of such price reductions. Ultimately, that will be a function of a variety of factors including the amount of off-invoice discounts that are available for transfer back to the invoice, the actual level of net margin obtaining in the retail trade currently, and the extent to which resulting competitive forces will drive efficiencies at all levels of the production and distribution chain.

Other extraneous factors, including input costs and consumer demand, also impact on retail prices and make it difficult to isolate the impact of any one factor such as the ban on selling below net invoice price.

Deputy Hogan criticised the Minister on the basis that there was no sign of a new chairman being appointed to the Competition Authority. I am pleased to note that less than 24 hours later, the Minister announced the appointment of Bill Prasifka to the post.

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