Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

-----has removed the statutory basis for the Minister to make minimum price orders in any sector. Having price competition is a healthy feature of our marketplace. That is the way new businesses develop. They come in at a cheaper price and they undercut someone. We do not seek to underpin the established interests by underpinning in law the price they want to charge. If that were the case, the next thing they would want is barriers to entry so they could not be disturbed and because they like the existing incumbents.

The nature of the marketplace is dynamic, with new people coming in offering consumers better deals. That is perfectly right. In this legislation we are not trying to give such powers to retailers or suppliers. We are trying to ensure that suppliers are not abused by over-powerful retailers in the approaches they take. Upholding prices is not the way to do that. The way to do it is to ensure that there are no unfair terms in their contracts. That still leaves players to compete and negotiate on price. We are not stopping the normal commercial negotiations that should occur in contracts about price levels. That sort of competition and negotiation is in consumers' interests. One wants to see both sides, suppliers and retailers, setting prices in a competitive environment that protects consumers. That is the way the marketplace works.

I am surprised at support for the notion that suppliers would set their own prices and that we would underpin it in law. That idea was abandoned because it was not effective. It served to keep prices up. I am sure that Deputy Martin, when he was a Minister, made the changes for those reasons.

Predatory pricing is another issue that arises in this context. Aggressive price competition is fine but where it becomes predatory and is designed to drive someone else out of the marketplace there is a genuine competition concern. Low prices are not a concern in competition law but where the motivation is to undermine some legitimate player in the marketplace, then there is abuse of dominance and the Competition Authority has the powers to pursue it. It is the authority's right and obligation to go after such pricing. Low prices are good but predatory pricing is an abuse. It is prevented by our competition law.

Irish statute law and EU law recognise simple retention of title clauses of the kind set out in the amendment. The courts have also upheld such clauses. It is one thing for the law to uphold certain forms of retention of title clause, freely agreed to by contracting parties, but quite another for it to insert a mandatory title retention clause into commercial contracts. To the best of my knowledge no other jurisdiction has introduced a legislative provision of that kind. The aim of the Bill's provisions on grocery goods is to achieve a proper balance in commercial relations between suppliers and retailers, but this should not be done by introducing a potential imbalance into relations between suppliers and retailers, and other parties.

The proposed amendment would affect the interests of third parties, including the Revenue Commissioners, employees and unpaid service providers, who have no equivalent option to take back services that have been provided by reducing the pool of assets available for distribution to other creditors of an insolvent buyer, and effectively permitting an unpaid seller to jump the queue of creditors.

The potential for retention of title clauses to lead to inequity between creditors has, in fact, led a number of jurisdictions, including the United States, Australia and New Zealand, to treat such clauses as a form of security interest against third parties that must be registered by the seller. The Law Reform Commission proposed a similar system of registration and other conditions regulating the retention of title clauses. Those recommendations were not implemented. In its comprehensive 2011 report on legislation governing the sale of goods, the Sales Law Review Group also concluded that because of their impact on third parties who had no say in the contract, any reform of retention title clauses had to be considered in the context of a broader reform of the law on personal property security interests.

Although I have some sympathy with the aim behind this amendment, I am not in a position to accept it. I am referring to the one on retention of title.

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