Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 142: To ask the Minister for Enterprise, Trade and Employment when he will finalise his policy in respect of the review of the groceries order 1987; his views on this important matter; and his plans to review the Competition Act 2002. [25673/05]

Micheál Martin (Cork South Central, Fianna Fail)
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The public consultation process which I initiated following the consumer strategy group's recommendation that the groceries order should be revoked generated in excess of 550 submissions. These were received from a wide range of parties, including trade groups, producers, retailers as well as a significant number from the public. All the submissions have been considered and a comprehensive report on the consultation process is being finalised within my Department. I expect that the report will include recommendations as to what action is appropriate with regard to the order and I will consider its findings and bring a recommendation to the Government by the end of October.

If it is decided that the order should be amended or revoked, then primary legislation will be necessary. Any such legislation could be effected through an amendment to the Competition Act 2002 or by stand-alone legislation. I have no immediate plans for a general review of the Competition Act given that the statute is relatively new legislation which has worked well to date.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Given that the Minister has had a long time to consider this issue and in view of the uncertainty it is creating in the grocery trade for consumers and suppliers as well as for people in the retail trade, does the Minister accept there is a need for clarity and an early decision on this matter? I welcome his statement that we will have a result by the end of October. What is the Minister's view on predatory pricing and below-cost selling and will he share it with the House?

Micheál Martin (Cork South Central, Fianna Fail)
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A decision will be made in October. It was important to allow a two-month public consultation programme prior to 31 July, as we did. We received a significant number of submissions which totalled 521. As I stated in replies to other questions, the order was introduced a long time ago, the situation has changed quite dramatically since then and the retail market has transformed. The Competition Act has clear provisions with regard to predatory pricing and abuse of dominance by any player in the market.

In this field one must always be careful with regard to the dividing line between genuine competition and what may be termed predatory pricing. It is not always easy to legislate definitively on that point. From my observations and analysis of the situation I will state the retention of the existing groceries order is not tenable. I have made that clear and put that view on public record. I want to make a recommendation to Government which will then require a reasonable period to decide upon that recommendation. A timeframe of the end of October will allow that.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Minister is aware we had much discussion on this matter, such as meetings between members of the Oireachtas Committee on Enterprise and Small Business and players in the retail sector such as Tesco and groups such as the Society of St. Vincent de Paul, Crosscare and the Combat Poverty Agency.

The Competition Authority also came before that committee and expressed quite forthright views on competition in the grocery trade. I will paraphrase the chairman of the authority who stated that it is not his business to decide whether to have large multiples or small shops. His role is to adjudicate on competition issues. It does not matter to him whether there is a concentration in the market as his remit is to ensure the existence of a competitive environment in which to do business. Does the Minister agree with that assessment? Does he also not mind whether major multiples will gobble up the rest of the market and concentrate the market in the hands of a few?

Micheál Martin (Cork South Central, Fianna Fail)
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Is the Deputy playing the RGDATA game? It is interesting that——

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I remind the Minister the view I presented is mine and not that of anyone else.

Micheál Martin (Cork South Central, Fianna Fail)
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I accept that. Of the submissions, 44% came from the symbol groups. It may be interesting for the House to hear that approximately 398 of the submissions favoured retention of the order, 153 favoured revocation while the remaining ten sought amendments or raised other issues. Not surprisingly, the submissions favouring retention came from the industry while the majority of those favouring revocation came from the public and consumer groups. Of the overall, 44% or 246 came from the symbol groups.

We want to avoid abuse of dominance by any particular player but we do want to bring more competition into the market. It is our view also that the market has changed significantly. I am not the chairman of the Competition Authority——

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Minister should answer the question I put to him.

Micheál Martin (Cork South Central, Fianna Fail)
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The Deputy should wait to hear the answer. One of the key pluses of the Competition Act 2002 was to take politics out of the operations of the Competition Authority in terms of its activities, particularly in terms of the chairman. He has a specific statutory remit and within that are provisions to deal with abuse of dominance.

Brendan Howlin (Wexford, Labour)
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What is dominance——

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I am glad the Minister has put his faith in the Competition Authority because if he is saying that this is the body that will police any new legislation he might propose, he would not want to hold his breath in respect of competition issues because there has not been a case taken under the Competition Act on predatory pricing since 1991. How will the Minister address the problem if that is the authority that will police any new law he will introduce to cover competition in the food sector?

Micheál Martin (Cork South Central, Fianna Fail)
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There might be a number of factors as to why a case was not taken. In terms of pricing for a range of foodstuffs, for example, we are higher in that regard than most other member states. We know anecdotally that the price differential between one store and another can be substantial, yet significant sectors of the market do not appear to be concerned about that.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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That is what they call the free market.

Micheál Martin (Cork South Central, Fianna Fail)
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That is the point I am making. There is no evidence of a predatory pricing agenda but I do get evidence, and it is even obvious from the submissions, that there are significant differentials now, depending on the type of store, in terms of what one will pay. The problem with the groceries order is that it prohibits selling at anything below net invoice price.