Mary Upton (Dublin South Central, Labour)

I am delighted to have an opportunity to speak on the Bill which the Labour Party does not oppose. However, while we welcome a number of elements in it, there is much scope for amendment on Committee Stage.

Consumer protection has never been more important than is currently the case. This week in the UK, for instance, banks have conceded defeat in the face of an organised campaign by hundreds of thousands of consumers claiming refunds of banking fees which exceeded the legal maximum allowed under UK consumer law. One estimate reckons UK bank customers are due refunds equivalent to €14 billion, which is a substantial amount of money to be repaid because somebody was not doing his or her job properly or because he or she was ignoring consumer rights. Our banks have a less than perfect record in attending to the rights of consumers.

UK consumers, however, are not the only ones who are being deceived. One of my favourite topics in this regard relates to food labelling and safety issues. Time and again in this House I have raised the issue of food which is produced outside Ireland that can be quite legally labelled as being "Irish" even though, for instance, only breadcrumbs may have been added to the original product after it was imported. This is called substantial transformation and it is entirely legal. The point at issue is that the meat content, for example chicken fillets, may have come from Thailand, South America or elsewhere. When such products are imported to Ireland, the addition of seasoning or spices can lead to it being labelled as "Irish". As far as consumers are concerned, the only information they have on the packet is that the product is Irish. That is definitely misleading. I accept this is the case across the European Union but I would like to see it changed. I welcome the Bill because it should take account of this kind of issue. Consumer protection in regard to food safety and nutrition is extremely important.

I note most of the Bill is an almost verbatim copy of EU Directive 2005/29/EC, which it is intended to transpose. Part 2 of the Bill aims to establish a National Consumer Agency. I am saddened by today's news that the Director of Corporate Enforcement has been unsuccessfully seeking sufficient staff to do its job for two years. It is not enough for Government merely to establish agencies like the National Consumer Agency; it must also resource them properly. I take heart, however, from the fact that should the Bill pass, it may well be implemented by another Government. If that is the case, we would ensure adequate resourcing was provided for the agency. It is pointless to set up agencies and not provide adequate funding for facilities etc. to allow them to deliver on their mandate.

Section 8 of the Bill gives the National Consumer Agency a number of functions. I note in particular the agency may "make recommendations to the Government...in relation to any proposals for legislative change". I note also it shall promote alternative dispute resolution, commission research, promote educational initiatives in the area of consumer education, prepare and publish guidelines for traders, in addition to any number of other powers. I welcome all of these proposals but one can well ask whether the Government is committed to resourcing the agency properly so it can carry out these functions. I am not sure that will be the case because of the history of the lack of resources for many other agencies, for example, the Food Safety Authority of Ireland. The catering trade is expected to indicate to us the country of origin of beef. When one asks how many inspections have been carried out, the reply is "very few", and when one asks how many have complied with those inspections, the answer is also "very few". The bottom line is the authority is not adequately resourced.

Part 3 deals with unfair and misleading commercial practices. Its scope is wide enough to include a number of situations in which consumers are being misled by unfair or misleading commercial practices. I commend the European Parliament for being responsible, as I understand it, for initiating the EU directive which this part of the Bill transposes.

I wish to concentrate on section 43 which states, "A commercial practice is misleading if it includes the provision of false information" in regard to a number of factors including the geographical origin of a product. It further states, a commercial practice would be misleading under the terms of the Bill if this false information "would be likely to cause the average consumer...to make a transactional decision that the average consumer would not otherwise make".

Section 43(7) states: "In determining the geographical origin of goods . . . consideration shall be given to where the goods underwent their last substantial and economically justified processing . . . resulting in the manufacture of new goods or representing an important stage of the manufacture or production". This brings me back to my point about substantial transformation. In many cases when one buys a product in a supermarket that to all intents and purposes is pretending to be Irish, when one investigates, if one is able to do so — for the most part one is not — one discovers the raw material was imported but the processed element of it is Irish which led to its being labelled an Irish product. This is a significantly misleading approach to labelling.

Other issues of concern arise in regard to the labelling of food. One often comes across what I consider to be sleight of hand labelling. For example, in regard to salmon one comes across "Irish smoked salmon" and "Smoked Irish salmon". One is not sure whether the salmon or the smoke is Irish or where the salmon came from to create this product. While this is technically acceptable and legal, it is definitely misleading because one would take it from the word "Irish" that the product was produced and processed in Ireland.

The labelling of poultry arises frequently in discussions of this nature. This issue affects consumers and commercial producers because, much of the time, they are competing on an unfair playing field with imported products. However, I welcome the introduction of sanctions under section 43 of the Bill for producers who label their product with false information. The categories of practice set out as misleading include, "its benefits or fitness for purpose", "the results to be expected from it", "the risks it presents to consumers", or due to "the results of tests or checks carried out on it".

Another issue I have raised previously in the House about food labelling is the question of guideline daily allowances, GDA, versus the traffic light labelling of food products. Under the GDA method of labelling products, which most major supermarket groups favour, a consumer is told on the label what percentage of certain categories of ingredients the product contributes to one's recommended daily intake of each ingredient. In effect, one is being told this is the appropriate percentage for one's daily intake. For example, according to the GDA system, a chocolate bar might say on its label that eating this chocolate bar would contribute 100% of one's daily recommended allowance of fat. On the other hand, the traffic-light food labelling system favoured by Deputy Naughten and I, advises the use of a simple red, orange or green colour coded labels. It tells whether a product should be taken with care or, if the label is green, it can be eaten with abandon. It is a simple and straightforward system, but the Minister for Agriculture and Food is not in favour.

Of 17,000 UK consumers recently surveyed, 80% preferred traffic light food labelling to GDA labels. The British National Heart Forum finds the GDA system complicated and misleading and the British Medical Association is in favour of the traffic light system of labelling. The argument is made by these substantial bodies. The UK Food Standards Agency states that the evidence so far is that consumers are not running scared of red markers, as feared by critics of the traffic light scheme. They are using the information to balance their shop. They are not interpreting red as a sign not to buy the product. They interpret it as "high in fat, salt or sugar" and know that they should not eat too much of the product.

Research has found that one of the major problems with the GDA system is that many people do not have the mathematical ability to use the percentages constructively. One mother stated that her priority at the supermarket is making sure she does not lose her child, not choosing a good cereal. A person on a low salt diet might see a product with a low percentage of salt, which is a good thing. Another product might express this as sodium or sodium chloride, which is not the same. There is a need for consumer information, consumer education and consistency of labelling to ensure that the correct information can be easily interpreted by the consumer.

Another problem with the GDA is the sample size of products. This is not standardised. One carton of yoghurt may state that 100g will provide 20% of GDA of fat. The carton beside it may refer to 30g providing 15% of GDA of fat. If the priority is minding the child in the supermarket one will probably choose the second product even though the former is healthier. One has to work out the mathematics but these matters should be kept simple. The traffic light food labelling system might show both yoghurts as amber or the latter on red and the former on green. This is uncomplicated. The average hard-pressed consumer would not be misled by the traffic light labels but would be misled by the GDA system. Many people find the current indication of nutritional content misleading, yet it is legal. The Bill should encompass issues such as misleading food labels. It is a major issue, given our concerns about healthy eating, obesity and so on.

The Minister for Agriculture and Food is reported to be opposed to the traffic light labelling system, apparently because she feels it would be bad for producers of high fat cheese. I have asked her to conduct research into Irish consumers' perceptions of traffic light labelling but she has refused. If she did, she would discover that Irish consumers would not be dissuaded from buying a high fat cheese with a red label but would buy lesser quantities or choose another with a lower fat content. There is no threat to the consumption of the product or the industry. We can provide the consumer with appropriate information. If a product is high in fat one should monitor the amount one consumes. Just because it is a dairy product we should not shy away from labelling it as a high fat product. We must be straightforward about these issues.

If the Government refuses to legislate to allow for traffic light food labelling it should introduce regulations, using the powers in section 48(3), which set out the conditions under which the GDA labels would not be deemed misleading. A statutory instrument could be introduced to oblige all manufacturers to use the same sample product size in the GDA label. This would stop the use of misleading GDA labels. Nothing short of a traffic light labelling system, such as Fine Gael and the Labour Party will introduce in Government, will prevent consumers from being misled.

I refer to dangerous and misleading information about diets and slimming aids. One sees wonderful advice in diet books and products that promise weight loss. It is not only misleading but dangerous. This must be addressed to stop the gullible from believing that they will lose a major amount of weight. If that worked, we would be skinny, healthy and fit without any effort. One finds the same information in fitness clubs where one is promised weight loss after a 14-day programme. This is also misleading and potentially dangerous.

Section 53 relates to prohibited commercial practices and I welcome section 53(3)(e) which prohibits advertisements which directly exhort children to "(i) purchase a product, or (ii) persuade a parent or adult to purchase the product for them;" That might be difficult to enforce. The Government should be congratulated but it should be noted that the provision is taken from an EU directive of 2005. I commend the European Parliament for initiating that section of the Bill.

I have previously raised the matter of pyramid schemes. People are ripped off and lose vast amounts of money and there are various knock-on effects. The Labour Party published a Bill on this practice some years ago and there has been a rash of pyramid schemes since. Many people suffer financial and personal losses from the rows that arise from the scheme. The moral is that if something looks too good to be true, it most likely is. This is another case of clever people exploiting vulnerable people.

I welcome the section that deals with aggressive selling. We all know elderly people living alone who have been browbeaten into buying a service or product they do not want. They are intimidated and are sometimes brought to the bank to get cash to hand over. This area must be addressed.

I also raised the matter of ringtones with the Minister and the difficulty of getting out of it once one buys into it. This practice targets people who do not know what they are buying. It is not clear that one cannot get rid of the ringtone once one pays for it and downloads it. I devoted much time to attempting to reverse this but it was very difficult because it operates from outside Ireland. Children, and teenagers in particular, are taken by the latest ringtone and must have it. Once they buy into it there is a cost every time it is downloaded and one cannot get rid of it.

Although I do not know how it could be addressed in this Bill, the matter of so-called psychics should also be considered. They advertise and rip people off. Mr. Derren Browne is a magician and explains in his books how psychics work. Apart from the financial aspect of the rip off, they target people who are vulnerable and this specific matter should be examined. Much of the Bill is to be welcomed. It is not right for the Government to take the credit for helping the consumer not only because the Bill's contents are identical to the aforementioned EU directive which is as it should be but also because this is the least consumer-friendly Government. For instance, it allowed the energy regulator to impose a 23% hike in gas prices, notwithstanding the reduction in world fuel prices. Deputy Hogan has already addressed this point. It has driven price increases that have let inflation break the 5% barrier. Annual inflation is now at a six year high of 5.2%. When we were last in Government inflation was at 1.5%. The removal of the groceries order has led to a downward spiral in the cost of alcohol. Consumers plagued by anti-social behaviour associated with people consuming cheap alcohol will not be overly impressed with this decline. That is not a consumer friendly move. Since the abolition of the groceries order food prices have gone up.

See this speech in context