Dáil debates
Thursday, 13 May 2004
Priority Questions.
Price Increases.
4:00 pm
Kathleen Lynch (Cork North Central, Labour)
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Question 9: To ask the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to reports that a number of pubs in Dublin significantly raised prices in the period around Ireland's triple crown match in Lansdowne Road; the action she intends to take to prevent such exploitation of consumers; if, in view of reports of some pubs systematically increasing prices for special occasions, she will consider the imposition of a maximum prices order; and if she will make a statement on the matter. [13813/04]
Mary Harney (Dublin Mid West, Progressive Democrats)
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I am pleased the Director of Consumer Affairs has highlighted the fact that certain pubs in Dublin increased their prices for a recent international rugby match. While there was no breach of consumer protection legislation as the pubs in question displayed the increased prices they were charging, nonetheless the director's survey has highlighted the need for better consumer vigilance. The best way of ensuring that markets for goods or services are delivering value for money to consumers is through increased competition and greater consumer awareness. That is the objective towards which all our policy interventions in the field of competition and consumer policy are directed.
Brendan Howlin (Wexford, Labour)
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By and large, I agree with the Tánaiste that information provided to the consumer is the best mechanism to ensure competition, but does she accept that there are occasions when a more direct intervention is required? If there is a clear example of exploitation of a special occasion and of a captive market in a confined geographical area, is there not a case, in those exceptional circumstances, for a maximum prices order? Will she open her mind to that prospect if there is a continuation of clear exploitation of a captive market on a special occasion?
Mary Harney (Dublin Mid West, Progressive Democrats)
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The answer is "no" because maximum orders tend to encourage everybody to go to the maximum. During the weekend concerned, hotels and flights were more expensive. Earlier today I spoke to an upset member of my staff who had booked tickets on the airline that went to the wall yesterday. She was trying to find alternatives to get her to her destination. She said that last week's flights on Aer Lingus cost so much but that this week, they cost more. That is the way companies operate——
Mary Harney (Dublin Mid West, Progressive Democrats)
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When there is much business and demand, that is what people do and I do not believe any law can get around that. Many pubs in Dublin did not increase their prices. Tourists will go wherever they most enjoy being. We all know that when we are tourists, we often go to more expensive places because they are more convenient. I hope locals are more discerning. If they are regulars, I hope they make their views known by perhaps withdrawing their business, albeit temporarily. I know many of the well-known hostelries around here frequented by Members of this House also engaged in price hiking that weekend. I do not believe there is a legislative way around it. The fact that the director highlighted it will make people less likely to increase prices on the next occasion. The publicity was certainly bad for those who engaged in it. That might discourage this activity from happening on other occasions.
Fergus O'Dowd (Louth, Fine Gael)
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The Director of Consumer Affairs named and shamed those people. Does the Tánaiste agree it is time to appoint a consumer affairs enforcer who would set up a website to name and shame organisations ripping us off day after day? Is that not the way forward? Would her Department support the setting up of such a website and league tables of the best and worst in each area?
Mary Harney (Dublin Mid West, Progressive Democrats)
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The director has the power to name and shame, as the Deputy said, and to bring whatever information she collects as a result of investigations into the public domain in whatever ways she believes appropriate. She did so effectively on this occasion and it got extensive publicity. Before Christmas, the director of consumer affairs at the Irish Financial Services Regulatory Authority, Mary O'Dea, did the same in regard to insurance. She showed a huge variation for similar profiles. I believe there was an eightfold or more difference between the lowest and the highest. There was a huge variation in the cost of motor insurance.
Naming and shaming is the way to encourage people to reduce their prices. I hope it will also encourage consumers to be more vigilant and supportive of those who have behaved responsibly.
Brendan Howlin (Wexford, Labour)
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Would the Tánaiste not accept that the attitude she has displayed to this question is giving the green light to publicans to repeat the process on the next rugby weekend or another special occasion? She said she will do nothing other than let the market take its course, and she has invited people to shop around. That is no consolation, however, particularly for the tourism sector because such weekends attract fans from neighbouring nations. Is it the Tánaiste's view that if visitors are ripped off on their weekends here, it is an issue for the market? If they leave Ireland with the impression that we are an exploitative and costly country, does she intend to do anything about it?
Fergus O'Dowd (Louth, Fine Gael)
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Would the Tánaiste consider a proposal for the Director of Consumer Affairs to distribute a logo to businesses that are not ripping people off, rather like the logo for guaranteed Irish promotions in shop windows? Would she consider that a good idea?
Mary Harney (Dublin Mid West, Progressive Democrats)
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As regards Deputy Howlin's question, I said that I would not introduce a maximum prices order because the experience in the past was that everybody goes to the maximum and feels that is the allowable threshold or acceptable rate. I made the point that hotels charge more for busy weekends and airlines charge more for tickets at such times. Generally, businesses tend to scale their activities to suit demand and, while we may not like that, it is the reality. In this case, the Director of Consumer Affairs undertook an investigative survey and put it into the public domain. Hopefully, that will succeed in frightening people into not doing this again. Whatever about airlines and hotel rooms which often have empty spaces during slack times when people are not travelling, pubs tend to do good business all year round. The name and shame approach is probably the most effective way of dealing with this, rather than by legislation.
As regards Deputy O'Dowd's question, I do not think the Director of Consumer Affairs could get involved in saying "X" is good and "Y" is bad.
Mary Harney (Dublin Mid West, Progressive Democrats)
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I do not know how many staff she would need to operate a system of that kind. One would have to constantly inspect a few hundred thousand businesses throughout the country.
Mary Harney (Dublin Mid West, Progressive Democrats)
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To have a State agency deciding what is good value is not the way to go about it.
Fergus O'Dowd (Louth, Fine Gael)
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If they are giving good value, why not do it?
Mary Harney (Dublin Mid West, Progressive Democrats)
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The approach the director has taken in this case is the appropriate way to go. Hardly any country in the world has price control legislation because it is impossible to enforce. It is not a way of reducing prices for consumers or of delivering better value for money.