Pat Breen (Clare, Fine Gael) | Oireachtas source

The Deputy is alright; I do not drink. I have been all over the country and have seen the importance of the craft brewery industry and the role it is playing in rural areas where we might not otherwise get industry. It is an important sector in Ireland and I very much note Deputy Kelly's interest in it.

The Competition and Consumer Protection Commission, to which the Deputy referred, is the statutory body responsible for the enforcement of domestic and EU competition law in the State. It is important to point out that section 9(5) of the Competition and Consumer Protection Act 2014 provides that the CCPC is independent in the performance of its functions, including carrying out investigations of alleged anti-competitive practices, which the Deputy has alleged. As investigations and enforcement matters generally are part of the day-to-day operational work of the CCPC, the Minister for Business, Enterprise and Innovation, Deputy Humphreys, has no direct function in such matters.

Competition rules seek to provide everyone with better quality goods and services at lower prices by ensuring that firms compete solely on their merits. In a competitive market, the simplest way for a company to gain more market share is to offer a better price than its competitors. This is not only good for consumers; when more people can afford to buy products, it encourages businesses to produce and boosts the economy in general.

In a competitive market, businesses will try to make their products different from the rest so they are more attractive. That is a very important part of the marketing of any product. This results in greater choice: consumers can select the product that offers the right balance between price and quality. To deliver this choice and produce better products businesses need to be innovative. It is very important for any business to be innovative. That is why some of the smarter craft brewing companies will do well with their products, design, production techniques and services.

Businesses may freely enter into a contract whereby one business agrees to buy from or supply all of its goods or services to the other. Such agreements may create benefits for businesses, competition and ultimately consumers. For example, a supplier and retailer may agree that only the supplier’s product will be sold in a retailer’s stores, as the Deputy rightly pointed out, allowing the supplier to invest more heavily in the marketing or promotional efforts of the retailer. Exclusivity arrangements between businesses therefore in many cases do not raise competitive concerns and are not necessarily in themselves a breach of competition law. It is only where such agreements could exclude competitors from the entire market, and not individual businesses, that such agreements can be regarded as anti-competitive. Concerns relating to exclusivity agreements are, therefore, examined by the CCPC on a case by case basis.

On foot of complaints made by distributors about exclusivity agreements, the CCPC has indicated that it has examined the use of such incentives in the on-trade supply of alcohol. The CCPC has indicated that it is important to note before a decision can be made on whether it should open an investigation, each complaint is examined through a rigorous screening process. Factors such as the nature of the complaint, the characteristics of the market and the evidence available all have a bearing on this process. After a robust examination it was determined that the CCPC did not have grounds to suspect a breach of the law. The CCPC can only initiate a full investigation where there is sufficient evidence of a suspected breach of Irish or EU competition law.

I understand that the CCPC’s examination has shown that the relevant exclusivity agreements were used in a small number of pubs in the State and that other brewers and-or distributors large and small still had access to the vast majority of pubs and other outlets. I understand that the CCPC will keep under review the potential impact of such arrangements and it will continue to monitor the sector.

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