Dáil debates

Wednesday, 25 May 2005

1:00 pm

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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Question 26: To ask the Minister for Agriculture and Food the assessment carried out by her Department on the impact of the removal of the ban on below cost selling on the viability of family farms; and if she will make a statement on the matter. [17446/05]

Photo of Mary CoughlanMary Coughlan (Donegal South West, Fianna Fail)
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The Deputy will be aware that the consumer strategy group in its report, Make Consumers Count, which was published last week, has recommended that the groceries order be revoked in its entirety. Arguments for and against retaining the order are dealt with in detail in the report. The Minister for Enterprise, Trade and Employment has announced a public consultation process and interested parties have been invited to make submissions on the future of the order over the next two months. My Department is giving careful consideration to the recommendation that the order be revoked in the light of any potential adverse impact on consumers or producers or suppliers of food and drinks products.

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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The Minister is saying that her Department has not carried out an assessment. Does the Minister not believe her Department should have carried out an assessment that could have formed part of the consideration of the group prior to publication of the report? Does the Minister not feel this has major implications for agriculture? Many farmers talk about the large discrepancies between farm-gate prices and what retailers charge. Significant margins are involved. Does the Minister not agree that the area needs to be reviewed and that the Department must take a decisive position on the matter and lead the debate rather than following the coat tails of the Department of Enterprise, Trade and Employment?

Photo of Trevor SargentTrevor Sargent (Dublin North, Green Party)
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Hear, hear.

Photo of Mary CoughlanMary Coughlan (Donegal South West, Fianna Fail)
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I am glad to see the spirit on the other side of the House. The Department of Agriculture and Food is acutely aware of the issues surrounding the groceries order and, as I am sure the Deputy knows, many of the complaints of those involved in agriculture relate to products outside the ambit of the groceries order, fresh meat, fruit and vegetables in particular. Those involved in horticulture are anxious to see those form part of the groceries order. The order was introduced at the time the H Williams supermarket chain went into liquidation. The problem is that there is a significant diversity of views as to whether this order is doing what it should be doing.

The Competition Authority maintains this is the only way to ensure competition. Given that the market share of many of the large retailers does not allow competition, we have a problem with the argument over the groceries order. The arrival of discount stores such as Aldi and Lidl provides competition and questions the necessity of the order. IBEC along with the IFA and other farming organisations have recommended to me that the groceries order should remain and have made good points in support of this. It is incumbent on us all to make a decision between the positions of the Competition Authority and the consumer strategy group as to whether there will be a change in consumer price and choice as well as in the existing farm gate prices. A complex and difficult decision must be made because of the diverse views on both sides.

We have evaluated advertisements on a number of occasions within the Department on the basis of price structure, which is one of the major issues. I provided funding this year to the consumer group, which is part of the Department, to carry out a true, open and transparent assessment of costs of food in particular which is a major issue for people. We have evaluated it. IBEC, representatives of the agrifood industry and producers have concerns over the removal of the groceries order. In addition, others, most particularly those on the horticultural side, want their products within the scope of the order. Ultimately it will be a question of what is the right thing to do and we are asking people for their views as to which is the right way to go. Other issues outside the groceries order cause greater angst and concern, mostly regarding the market share of a number of very large supermarkets in the United Kingdom and here.

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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I accept the point the Minister made earlier on fresh fruit, vegetables and meat. However, is it not the case that more of our produce is going into processed food and novel foods, which the Minister is promoting, and the demand for convenience foods is growing? Many of these areas are included in the scope of the groceries order. Given that many of the farmers' margins on carcases are based on the sale of the more marginal or poorer quality cuts which go into many processed foods, is it not critical that the Department of Agriculture and Food should have a decisive position on the groceries order?

Photo of Mary CoughlanMary Coughlan (Donegal South West, Fianna Fail)
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In the main those associated with my Department are vehemently opposed to the removal of the groceries order. The farming organisations have not come to a particular decision on the issue and I will be interested to hear their opinions in due course in consultation with the Minister. The Deputy is right in saying that much food goes to the processing industry and many of our food companies have done well in the production of novel consumer and health foods. It is difficult to ascertain whether this warrants the removal of the groceries order based on the fact that many of those involved in food manufacturing, who are represented by IBEC, vehemently support the groceries order. Therein lies the problem. Ultimately it will be a political issue. People want to see reduced prices and farmers want a good return on their investment. Sometimes it is very difficult to balance the two.