Noel O'Flynn (Cork North Central, Fianna Fail)
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I wish to share time with Deputies Ned O'Keeffe, Glennon, Fiona O'Malley and Carey.

I welcome Deputy Kehoe back to the Chamber following a long period of illness. Having travelled with him on an important fact-finding mission to Australia two years ago, I hope to welcome him back to the Committee on Communications, Marine and Natural Resources and travel with him again when he leaves his current position of Whip.

I support the abolition of the groceries order of 1987. While it played an important role at the time, it no longer meets the needs of the market and does not protect consumers in a market which has changed considerably in the past 20 years. Below cost selling, boycotting and 'hello' money were banned by the groceries order. Having resulted in 12 prosecutions over an 18-year period, Deputies can judge for themselves whether the order was effective.

The groceries order was introduced at a time when national, as opposed to multinational, supermarket chains were fighting a fierce battle for customer and market share and using predatory pricing and below cost selling to put the weakest of their number out of business. Some Deputies will recall that the H. Williams supermarket group did not survive but it is also important to note that no multinational retailers operated here at the time.

I agree with the consumer strategy group's conclusion that consumers pay too much for goods covered by the groceries order, particularly given that comparisons of prices here and in mainland Europe showed that goods were 30% cheaper in Spain and Portugal. It troubles me most that prices charged for groceries in Northern Ireland and the United Kingdom on the one hand and the Republic on the other, differ by approximately 30%, particularly given that the goods and services in question are supplied on both parts of the island by the same multinational retailers. Why does the price of a shopping basket of goods differ between the two parts of the island? I hope the Competition Authority will take meaningful action to determine how the retailers in question can have two sets of prices in one market. I am convinced the prices charged by the multinationals in this part of the country are artificially high and consumers are not getting a fair deal.

Bread, milk, perishable goods, fresh meat, fruit and fresh fish were not covered by the grocery order. If shoppers are to make savings of €500 per annum as a result of the abolition of the groceries order, as has been indicated, let prices come down.

I welcome competition in the market, particularly the arrival of continental supermarket groups which are gaining market share, supplying goods at reasonable prices and employing thousands of people.

The Competition Authority is held in high regard throughout Europe. I welcome the decision of my colleague, the Minister for Enterprise, Trade and Employment, Deputy Martin, to introduce legislation in this regard. It will have my support as it will provide protection for consumers and result in greater competition.

Different types of shopping are available. Consumers can use discounters, large supermarkets, convenience stores or supermarkets using franchised names such as SuperValu, Centra and Londis, which provide excellent service and quality goods in towns and villages throughout Ireland. Convenience retailers, such as shops attached to filling stations, are also widespread. People know when they enter these stores that they will pay more and can go to a larger market if they want cheaper prices.

Joe Sherlock (Cork East, Labour)
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The Deputy's time has expired.

Noel O'Flynn (Cork North Central, Fianna Fail)
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I support the proposed changes. Consumers now have a choice, particularly when one considers the difference between the products found in a shopping basket in 1987 and those found in one today.

Ned O'Keeffe (Cork East, Fianna Fail)
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The Competition Act 2002 is relatively recent legislation on the Statute Book and is substantially based on equivalent EU competition provisions in the Treaty of Rome. Essentially, it involves overlaying the economy with the competition regime which applies across all European states. While this approach is fine in principle, it raises concerns on some issues of important detail.

If one seeks to apply complex rules developed primarily for external trade across 15 EU member states to a relatively small economy, one must ensure they have equal validity when applied to smaller economies and bind large and smaller players. In some areas the Competition Authority and Competition Acts need refinement to ensure they secure fair play for all businesses, not only larger enterprises.

Under the Competition Act, as drafted, there is no doubt smaller companies suffer legal discrimination in competitive markets dominated by larger, frequently global companies. Given the extremely positive role small and medium sized enterprises play in the economy, it is important this impact is recognised and addressed. For example, under the Act independent owner run companies are treated differently from branches of a larger company. If two independently owned companies combine to deliver a price response to a larger competitor, they are liable to be prosecuted for price fixing. On the other hand, if the large competitor instructs two branches of the company to co-ordinate prices in an area, the branches are not liable to be prosecuted for price fixing unless the company is deemed to be dominant. This means it is acceptable for a large company to fix prices while fear of prosecution should deter two smaller operators from considering co-operation to meet a competitive threat.

Under competition law, a finding of dominance can be elusive. For example, in one case the Competition Authority found that a market share of 65% was not dominant in a local market. This places smaller operators at a distinct disadvantage and tilts the balance in favour of larger businesses. The reliance on establishing a finding of dominance to assess any abusive activity by a large player is also misguided and needs to be reviewed. It is farcical that the only factors determined to assess dominance are the activities of particular companies in the State. Examining market share in the State alone as the arbiter of dominance gives a skewed result and ignores the significant muscle many companies bring to the Irish market as a result of their operations overseas. For example, a retailer with a 5% market share here could have a significant international business which dwarfs an entire sector in Ireland. It is nonsense that the overseas activities of a player operating in this market are not taken into account in determining dominance. We need enlightened thinking to overcome this imbalance.

In his recent announcement on the revocation of the groceries order the Minister stated he would strengthen the Competition Act to make certain activities illegal if carried out by a firm which is not dominant. He specifically mentioned the demand for 'hello' money, the imposition of unfair contract terms and fixing of minimum resale prices. While this announcement is welcome, particularly given the skewed manner in which the Competition Authority assesses dominance, the Minister should go one step further and outlaw predatory pricing by a company which is not dominant. This could be achieved without impacting on genuine competition in the market.

Predatory pricing is the main problem. The Competition Act only outlaws predatory pricing when carried out by a dominant firm. It occurs when a major player with deep pockets targets a small competitor by selectively dropping prices to unsustainable levels for a period and squeezes the competitor out of business. Ben Dunne said on NewsTalk that the small players try to take on the bigger ones but that it is like an elephant dancing with a flea, and I agree with him.

Some 50% of the Irish retail market is controlled by two groups. Tesco holds approximately 27% and Dunnes 23%. That is not a healthy situation. Since no player in the Irish retail grocery market has reached the market share required for dominance, it is unlikely that the authority will take action on predatory pricing.

That is a ridiculous situation, given that one of the main players in our retail sector is a major international giant with a turnover eight times that of the entire Irish grocery market. That player would be able to engage in predatory pricing without sanction under the Competition Act 2002 as currently structured. That is unfair, unreasonable and unjust as it confers enormous power on the biggest player in the market over smaller players without independent external review.

To ensure competition in the retail grocery trade, we need the retention of the Restrictive Practices (Groceries) Order 1987, with predatory pricing expressly outlawed for those who are dominant. That would make predatory pricing and the charging of unsustainable prices an uncompetitive activity and therefore legal under the Competition Act 2002. It would ensure fair play and competition in the grocery trade.

Joe Sherlock (Cork East, Labour)
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Tá an t-am beagnach istigh.

Ned O'Keeffe (Cork East, Fianna Fail)
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Like the previous speaker, I had a little more to say — I had another ten pages. This is a very important subject, but I believe that I got the important point across, which is predatory pricing. If we do not act on that, our constituency will have no small corner shop.

Fiona O'Malley (Dún Laoghaire, Progressive Democrats)
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I am astonished at Fine Gael tabling this motion and at its wording. Its track record leaves a great deal to be desired, and the Restrictive Practices (Groceries) Order 1987 is a case in point. Deputy Hogan said last night in that regard that the Minister had spun the story and that he was already in retreat on the issue. That analysis would send a shiver down the spine of any consumer. The Government has dealt with the issue in the proper order and the Restrictive Practices (Groceries) Order 1987 fails to prevent such pricing. It was unable to distinguish between legitimate low pricing and genuine acts of predation.

How did Fine Gael handle the issue, however? In a classic political fudge, it was unsure and afraid of lobby groups. Fine Gael claims to be the consumer's champion, and here was a clear opportunity for it to demonstrate its credentials, something that would make a difference to the consumer. However, it shied away and was found wanting — some courageous champions. In contrast, my party, the Progressive Democrats, clearly demonstrated that it was the one to take on vested interest, calling clearly and early for abolition of the Restrictive Practices (Groceries) Order 1987. Thankfully, in the interests of consumers, that has come to pass.

Last night Deputy Hogan said that the Fine Gael motion——

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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What did the Tánaiste, Deputy Harney, do in 2001?

Fiona O'Malley (Dún Laoghaire, Progressive Democrats)
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——was based on the failure of the Government to control prices, adding substantially to the ever-increasing cost of living, and its complete inability to tackle vested interest and antipathy to consumers. Is he for real? First, how does one square higher prices and reduced spending power with the year-on-year increases in numbers of new cars and foreign holidays, classic indicators of spending power resting with the consumer?

Joe Sherlock (Cork East, Labour)
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The Deputy is being provocative.

Fiona O'Malley (Dún Laoghaire, Progressive Democrats)
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Second, regarding taking on vested interests, Deputy Hogan will be interested to remember that in May 1996, the last time when Fine Gael was in government, it sought derogations——

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Deputy is mistaken.

Fiona O'Malley (Dún Laoghaire, Progressive Democrats)
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Yes, it was.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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It was not, the Deputy does not remember.

Fiona O'Malley (Dún Laoghaire, Progressive Democrats)
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It sought derogations from an EU law to protect the monopoly of a State interest at the expense of consumers. It tried to protect Telecom Éireann's monopoly on telephone services for an extra two years, until 2000.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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What have we now?

Fiona O'Malley (Dún Laoghaire, Progressive Democrats)
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Are the public and consumers somehow to believe that Fine Gael will take the right decisions for them — on those occasions when they will take a decision on an issue? Deputy Hogan well knows that the Restrictive Practices (Groceries) Order 1987 has become a major embarrassment for Fine Gael. It demonstrates the paralysis that has beset that party, which is trying to keep everyone on side because it is seeking office.

Whatever the truth regarding Fine Gael, the Labour Party is certainly no friend of the consumer. The Acting Chairman will not like this. Its rusty, Stalinist economic policies are just the ticket to stifle competition and hurt consumers. The Irish aviation sector, a classic competition success story, particularly upsets Labour. If Aer Lingus is to compete successfully, it needs money to renew the fleet, a well-established fact. The Government has allowed for that by selling shares to raise the capital needed. The Labour Party has held to its archaic position of State ownership. Given that the new aircraft required would cost over €100 million each, it would be fascinating to hear how the Labour Party, in government, could justify spending €1.2 billion of taxpayers' money buying aeroplanes.

The Labour Party constantly criticises Ryanair, Europe's biggest airline and an extraordinary Irish success story. Ryanair is an example of how competition can transform markets, reduce prices and serve the consumer——

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Thanks to the late Jim Mitchell.

Fiona O'Malley (Dún Laoghaire, Progressive Democrats)
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——yet it is subject to the most hostile and constant criticism from Labour, which would wish it out of existence. If that happened, the consumer would pay the same price as we once paid —£300 — for a return flight to London. That policy does not serve the consumer. Labour's attitude demonstrates that the benefits of competition provided to the consumer are coloured by the obligations to vested interests and its chief financial backer, the unions. If Labour gets into power, competitive forces will become subservient to those vested interests and the interests of the consumer will lose out.

I support the amended motion, since in contrast to the policies of Fine Gael and Labour, those pursued by the Government are the right ones for the consumer and the economy. It has proven that by being re-elected.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Applause.

Jim Glennon (Dublin North, Fianna Fail)
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My colleagues opposite are calling for applause, but I do not know whether it is for my arrival or for the departure of Deputy Fiona O'Malley.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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It is for Deputy Glennon's arrival.

Jim Glennon (Dublin North, Fianna Fail)
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Go raibh míle maith agat. Modesty forbids. In the dim and distant past, when I was growing up in a small town in north County Dublin with a population of 2,500, we had 15 grocery shops by my best count. We also had 15 public houses, which says something about Irish society at the time. That town's economy was based entirely on the months of July and August, when visitors would come from Dublin city and rent houses there so that the population doubled. Skerries was known as a seaside resort. My father was a small publican and relied completely on summer business for our family's livelihood. The package holiday in the early 1970s, however, put paid to all that.

Skerries has had to change dramatically. I mention it this evening in the context of changing society in Ireland. Now, in a town with a population of 8,500 rather than 2,500, we have four grocery shops instead of the 15 then. Society has changed irrevocably, some might say for the better and some for the worse. There is a balance to be struck and it is in the context of balance that I commend the Minister for Enterprise, Trade and Employment, Deputy Martin, on his recent actions regarding the Restrictive Practices (Groceries) Order 1987. I believe that the correct balance has been struck and I very much look forward to the appropriate legislation in the context of the Competition Authority being unveiled. I seek a Competition Authority with real teeth, undertaking real activity.

I come from a constituency that provides 50% of the national horticulture crop. I see the difficulties created for horticulturists in my constituency by the massive, monopolistic buying power of a very small number of individuals. Standards are being improved constantly in terms of the quality of the goods on presentation to the consumer but those standards are being used unreasonably and callously to exert unfair leverage on the supplier with a view to squeezing the grower's margin even further. Those are the unsatisfactory aspects of modern Irish life.

Another aspect that is worth mentioning is the huge difference between owner-operated local business and the chain of multinational operators. Local stores, whether they are under franchise or individually owned, are operated by local people with a vested interest in the local community. They employ locally, source their merchandise locally, bank locally and support local initiatives. If somebody from a local organisation goes into one of these shops looking for sponsorship for a local activity, the shop owner does not have to go to head office to get sanction. Invariably, the local operator will support it. They are an integral part of the fabric of society and should be protected. It behoves the Competition Authority to protect them.

Some of the comments made about the independent symbol operators carried a disturbing sub-text. Independent operators appear to adopt an approach that larger players are far better for consumers and that the further their head office is from Earlsfort Terrace or Kildare Street, the better. This is dangerous territory and represents a sleight on the thousands of hard-working, dedicated risk takers who have put their homes on the line to develop and fund their new business and provide employment. Like my colleagues I could go on ad nauseam but I will give way to my colleague, Deputy Carey.

Joe Sherlock (Cork East, Labour)
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Tá deich nóiméad ag an Teachta.

Pat Carey (Dublin North West, Fianna Fail)
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I will endeavour to observe the Chair's injunction to be neither provocative nor——

Arthur Morgan (Louth, Sinn Fein)
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Go on, provoke us.

Pat Carey (Dublin North West, Fianna Fail)
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I will concentrate on the bigger picture as some of my colleagues opposite might want me to do.

I believe in open and fair competition. It is a vital element of ensuring a good deal for consumers here as well as developing a successful economy. Greater competition in the economy stimulates innovation and efficiency among business. It enables consumers to buy goods and services at the best possible price and enhances overall national competitiveness. Companies that compete to win our business provide an enhanced service and variety and generally become more responsive to our needs as consumers. At the same time, competition drives companies to cut their costs and find more efficient and productive ways of doing business.

The promotion of competition in the economy requires an effective legal framework. The Competition Authority, set up under the Competition Act 1991, reviewed by the Competition and Mergers Review Group during the late 1990s and reinforced in the Competition Act 2002, forms the sound legal basis required to safeguard this competitive process. In fact, the 2002 Act is regarded as one of the most modern pieces of competition legislation in the world and among the most robust.

The Competition Authority is one of the most empowered, proactive and successful enforcement agencies of competition law in Europe. The resources available to the authority are kept consistently under review to ensure the organisation keeps pace with the demands of enforcing competition law in a fast-growing economy. Currently, the authority has a staff complement of 52 and an annual budget of €5 million. I understand discussions on current requirements are ongoing with the authority.

The Competition Authority was the first enforcement agency in Europe to secure a criminal conviction for a competition offence and, to date, has obtained five such convictions. In 2004, the authority secured its first successful abuse of dominance case in the High Court. These actions, combined with the authority's cartel immunity programme and recruitment to the ranks of the authority of gardaí with powers of arrest and detention for competition offences, have had a significant impact in combating cartel membership in Ireland. Of course, enforcement of the Competition Act is not just about taking prosecutions. Deterring and preventing breaches of the Act in the first place is more effective and cheaper than prosecuting breaches.

This debate has been instigated by the Government's decision last week to repeal the groceries order. That is a decision which I welcomed and support. The order is anti-competitive and anti-consumer. Its repeal is a good example of this Government's drive for increased competition in our markets. The order was originally designed to outlaw predatory pricing. Predatory pricing, as has been explained, is a tactic employed by a firm that is dominant in its market and involves the sale of a product below cost for a prolonged period to damage or eliminate a competitor. In this way, it is anti-competitive and acts against the interests of consumers and the economy as a whole.

The problem with the groceries order is that it has shown to be an unsuitable vehicle to prevent predatory pricing. It was unable to make the distinction between legitimate low prices and genuine anti-competitive acts. What we must realise also is that specific provisions are already contained in the Competition Act to outlaw this sort of anti-competitive practice. If any individual business or group of business believe they are being harmed by predatory pricing, they may make a complaint to the Competition Authority which has the powers to investigate and take legal action, including by means of seeking a private injunction in the High Court to stop the illegal activity and seek compensation in the courts for any damage done either following a successful authority court case or as a private right of action.

The penalties for any undertaking found to have engaged in predatory pricing are up to €4 million or 10% of the company's turnover. They are very substantial penalties. It must be borne in mind that such penalties are much greater than those which applied under the groceries order and are likely to act as a real deterrent to any business contemplating predatory action. At the same time, the repeal of the order will reduce prices and therefore ensure a better deal for consumers.

I do not wish to be provocative but Fine Gael cannot have it both ways. I cannot make my mind up as to where it stands because I read Deputy Hogan's position and that of his colleague, Deputy Naughten, on competition and the groceries order. I do not normally accuse the Fine Gael Party of much but I accuse them now of scare-mongering. I must also express a degree of concern and disappointment at a statement issued yesterday by RGDATA and can only suggest that RGDATA is in the queue in scare-mongering as well. Telling people that the Competition Act does not cover predatory pricing is totally untrue. As everyone knows, to partake in predatory pricing a company must be in a dominant position and to abuse a dominant position is illegal under section 5 of the Competition Act. In fact, to protect any company or shop, no matter how small, dominance does not have to be measured on a national scale. It can be measured in any part of the State under the Act.

Predatory pricing is quite rare and is so expensive for a company to engage in it is not guaranteed to succeed. There is a huge difference between predatory pricing and competitive pricing and by removing the groceries order, this Government has made the market more competitive and removed any barriers to passing on discounts to the consumer. The groceries order was not a suitable vehicle to prevent predatory pricing. Fine Gael knows that. The Competition Act 2002 outlaws predatory pricing and the provisions that are based on EU treaty law state that. There is case law in Europe to support the use of these provisions to prohibit predatory pricing. Chapter 7 on predatory pricing in the report on the groceries order sets out the detail. When we debate this matter in the House let us at least debate the facts and not indulge in political opportunism and gamesmanship.

I want to make it clear also that I do not accept the Opposition's proposals on the category of super complaints. There is nothing stopping anyone from making a complaint to the Competition Authority. As I and other speakers have outlined, the legal framework and relevant authorities exist to combat all forms of anti-competitive practice, no matter which industry is involved. For example, the studies undertaken by the authority in banking, insurance and engineering were all extensive and serious investigations and are all bearing fruit, leading to substantial and significant reforms. To be effective, however, the Competition Authority needs evidence rather than mere suspicion of wrongdoing. It is important, therefore, that complainants to the authority provide as much information as possible.

The issue of competitive pricing and the need to combat excessive charging must be and are taken seriously by the Government. By addressing the high cost of motor insurance, it has facilitated a reduction in insurance prices. The Competition Authority has studied and commented on sectors as diverse as pharmacy, grocery retail, electricity, alcohol retail, ports and bus services outside Dublin, and on general issues such as retail planning guidelines, class action law suits, and enterprise and consumer policies. An extensive study is under way into aid professions.

Finian McGrath (Dublin North Central, Independent)
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What about small retailers and shopkeepers?

Pat Carey (Dublin North West, Fianna Fail)
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I spoke about shopkeepers earlier, in the Deputy's absence.

Arthur Morgan (Louth, Sinn Fein)
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What about the legal profession? Give us a break.

Pat Carey (Dublin North West, Fianna Fail)
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I have never known Deputy Morgan to be short of a break. Preliminary reports have been published into engineers, architects, solicitors and barristers. Further reports on vets, opticians and dentists will be published in the next six months and the final reports on architects, solicitors and barristers are also due. I hope that will satisfy Deputy Morgan. I support the work of the Competition Authority in investigating pricing in these sectors. I look forward to the results of these reviews and to enjoying the more competitive prices I am sure they will bring about. I support the amended motion.

Eamon Ryan (Dublin South, Green Party)
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I propose to share time with Deputies Morgan, Finian McGrath, Catherine Murphy, Cowley and McHugh. We are quite a team.

Joe Sherlock (Cork East, Labour)
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Is that agreed? Agreed.

Eamon Ryan (Dublin South, Green Party)
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I do not know if the third secret of the Dáil, relating to the identity of the third socialist, has been discovered. Suspicions have been cast at some on the benches behind me. We can, however, be fairly certain that socialists are thin on the ground on the benches opposite. I am even told they may not be plentiful on the benches to my right.

Pat Carey (Dublin North West, Fianna Fail)
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There is one to my left, Deputy Dennehy.

Joe Sherlock (Cork East, Labour)
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I remind Deputy Eamon Ryan that he has limited time in which to speak on this matter.

Eamon Ryan (Dublin South, Green Party)
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I imagine if a focus group were to tell Fianna Fáil there were votes in it, a significant number of socialists would emerge to support their leader.

As an environmentalist, I believe we should take the environment into consideration when deciding policy. This means I would like to see the market taking such issues as carbon emissions and pollution into account. I also, however, believe in the market. I am a social democrat in that I believe the citizens of the State have the right to organise their own health, education and other social services and to gain on the social democratic tradition of the last 150 years which has brought us so many civilised benefits. At the same time, I want the market to provide the solutions and quality of life that we in this country deserve.

For a market to function, there must be competition. The Green Party's objective is to ensure a situation where there is a large number of entrants competing effectively against each other. The position of the parties opposite on this issue is sometimes fraudulent. Members of the Progressive Democrats Party, the junior partner in Government, are particularly fraudulent and arrogant as they puff out their chests and proclaim themselves the great champions of competition. The reality, however, is that their actions and those whom they support indicate they are anything but champions in this regard. As my colleague Deputy Boyle has observed on a number of occasions, the business of that party is corporate social welfare. The larger the corporation, the greater the welfare the Progressive Democrats is eager to offer.

Deputy Hogan did well in listing the examples in this regard. For example, a large monopoly supplier in the building industry, such as Cement Roadstone Holdings, CRH, has nothing to fear in terms of competition or the watchful eye of the Progressive Democrats doing anything that might disturb its business. One can be certain that the Competition Authority would fail in any possible investigation as to why we are victims of the massive rip-off involved in paying such high prices for the basic building blocks of our building industry. Neither have AIB and Bank of Ireland anything to fear from the proud gentleman and ladies of the Progressive Democrats Party, who blindly ignore the massive rip-off that has occurred because of that cosy cartel to whom we pay our mortgages. Likewise, ESB, Eircom or any other large monopoly company has nothing to fear from the Progressive Democrats and the Competition Authority it has set up.

Under this Government, the public has been ripped off in the provision of basic services. My party applauds and supports Fine Gael's motion to reform the Competition Act 2002 and highlight the lack of competition.

Arthur Morgan (Louth, Sinn Fein)
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I invite Deputy Carey to heckle at will. It might liven up this dull dungeon.

Pat Carey (Dublin North West, Fianna Fail)
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I look forward to it.

Arthur Morgan (Louth, Sinn Fein)
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I begin by addressing an important issue I have been seeking to raise in this House for some time. Competition law is being mischievously used to attack the rights of certain workers, particularly actors, musicians, film crews and freelance journalists, to be collectively represented. When this competition legislation was going through the House, guarantees were given that this situation would not occur.

It is ridiculous that these low paid workers are targeted while others, such as newspaper groups, CRH and the self-regulating professions, receive little attention. In this regard, the unions have accurately observed that the Competition Authority has the wrong target. The Minister has indicated he is unwilling to make legislative changes to address the position in which these workers find themselves. This is deplorable. I call on the Minister to amend the Industrial Relations Acts in respect of the definition of employee to rectify this unacceptable situation.

I also take this opportunity address the issue of the self-regulating professions. I look forward to a review in this regard but I remind Deputy Carey that action is needed. We must make tackling self-regulation by the professions a priority. We need to look at how people are being served by this system and if it allows for unreasonable profiteering by elite groups. Examples of the self-regulating professions include the legal and medical professions.

Many of these self-regulating professions have formed a type of monopoly system where it becomes hard to get into the profession, the numbers of entrants are limited and so on. The failure of the Government to address self-regulation by the professions, which has long been shown to be anti-competitive, illustrates the selectivity of the establishment when it comes to the issue of competition. The necessity for competition is absolute when it comes to breaking up profitable State companies but not so when it comes to tackling monopolies by the establishment's cronies. The notion of self-regulation by the professions is outdated and should be brought to an end.

This debate also is a timely opportunity to discuss the lack of competition in the newspaper market. The impact of this was seen some weeks ago when the titles controlled by Independent News and Media all carried false and misleading reports about the death of Liam Lawlor. I have previously asked the Minister for Enterprise, Trade and Employment the reason the Government has failed to ensure the enforcement of the Competition Authority's ruling that Independent News and Media must divest itself of its 24.9% shareholding in another company. This followed the securing of control of the Irish Press Group by the company in 1994. Those titles ceased publishing some six months later, prompting calls for a review of media ownership.

There has been no satisfactory response from the Government in respect of this matter. Is the real reason the Government has failed to ensure the enforcement of the Competition Authority's ruling the fact that it fears that doing so will cause it to suffer the wrath of the media mogul? There is clear evidence from what emerged at the Moriarty tribunal that Independent News and Media would not hesitate to do this. It came to light during the course of that tribunal that Anthony O'Reilly threatened the rainbow coalition that it would lose the Independent group as friends if the latter's demands were not met. An editorial was subsequently put on the front page of one of its newspapers on election day calling on voters not to vote for the parties of that Government.

Independent News and Media also owns 29.9% of the Sunday Tribune and effectively controls the paper. From evidence in the deterioration in its quality, it seems the company is keeping the paper going merely as a false competitor for its main Sunday newspapers. I questioned the Minister through both written and oral questions regarding this monopoly yet none of his responses, including some received yesterday give any sense that he is taking this issue seriously. The Minister is standing over a situation where elitist self-regulating professions and media monopolies are ignored while low paid freelance workers are targeted. This is shameful position for the Government to adopt.

Finian McGrath (Dublin North Central, Independent)
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I am glad to have the opportunity to speak on this important debate on the Competition Authority, the issue of higher prices and reduced spending power for consumers. This is relevant in light of recent developments in the economy and society. As an independent Member, my focus will always be on the consumer, the customer and the citizen. The rip-off culture must always be challenged. Taxpayers' money must not be wasted. It must be spent wisely with priority given to the weaker sections of society, the elderly, the sick, the disabled, the homeless and the carers. We must challenge Ministers of State who will spend €46,000 on personalised advertisements over the coming weeks when money should instead be pumped into services. On the north side of Dublin city, families with children with disabilities cannot even get occupational therapists.

Those who push the right-wing economic agenda in the House can stuff it. How many people believe prices will drop following the revocation of the groceries order? Will the consumer get a fair deal? Last week, the Minister for Enterprise, Trade and Employment, Deputy Martin, announced the Government's approval to revoke the groceries order. This decision is gravely disappointing for the wide range of groups that supported the order, especially given that yet again the Minister's officials were unable to determine the impact of the order on food prices, inflation or international price comparisons.

The Minister also announced the strengthening of the Competition Act 2002 to outlaw practices banned under the groceries order but inadequately covered by competition law. In particular, he committed to outlawing 'hello money', resale price maintenance and unfair discrimination. However, there is a glaring gap in the Minister's reforms that needs to be addressed, if the repeal of the order is not to result in the closure of local shops and the increased dominance of the largest players. I will stand with the local shop sector on this issue. The Competition Act only prohibits predatory pricing when indulged in by a dominant firm. However it must be remembered when a large retailer selectively puts prices down to target smaller competition it puts smaller firms out of business. If the Minister wishes to ensure competition and fair play in the retail grocery trade following the revocation of the order, he must outlaw predatory pricing by firms not deemed dominant.

Catherine Murphy (Kildare North, Independent)
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On 19 September, I complained to the Competition Authority on the issue of a specific property management company. I filled in the on-line form and supplied initial information. A week later, I received an e-mail informing me that the complaint has been reviewed by the steering committee. It continued that it would appear from the details presented within the e-mail that this issue is a contractual one between my constituents and the estate management company, rather than an issue under the Act.

I had informed the authority that the developer and the management company were one and the same person, despite each home owner paying a fee and having no hand act or part in deciding who carried out the work. There was no obligation to get value for money, which we are told is the essence of competition. I was advised by the authority I could engage a solicitor and take the matter to court under section 14 of the Competition Act. That is exactly what I wanted the authority to do.

On Monday night, I attended a well-attended public meeting organised by Deputy Joe Higgins in Tyrrelstown. One of the complaints made by those who pay management company fees was that an agent was foisted on them by the developer. In short, they get no choice. In one case the appointed agent would not take on the maintenance role until a debt running into tens of thousands of euros was paid by the home owners collectively. That debt followed works carried out by another appointee of the developer who did less than cover himself in glory. The same practice seems to be emerging in several locations judging by the e-mails and telephone calls I have received.

I have heard of instances where developers are orchestrating a majority shareholding in management companies of which they are directors, in order to have a controlling interest. In short, they can appoint their own cronies to the job and charge what they wish. When the intention was that apartment owners would be the only shareholders, I regarded that as being about as anti-competitive as one can get. However, that complaint was bounced back to me. I do not have great faith in making such complaints to the Competition Authority.

Jerry Cowley (Mayo, Independent)
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I am always amazed at how governments will always back big business. The bigger the better is very true in the case of the Fianna Fáil-Progressive Democrats Administration. I note Dunnes Stores is always located in the best sites in town, usually besides an urban district council office or public car park. Of course, there were never any favours done for Dunnes Stores.

There is a great need for reform of the Competition Authority. In Europe, there are examples of industrial sectors which have received heavy fines for anti-competitive and anti-consumer practices. These sectors exist in Ireland but have not been subject to any fine, let alone heavy fines. Reform in competition is also necessary in the prevention of rural depopulation. We need to prevent abuse of dominant market positions and anti-consumer practices. The existing legislation must be amended to make it effective. In other European states, legislative instruments are in place to prevent these predatory activities. The independent retailer, who produces a third of grocery business, needs to be protected. While the consumerism age is upon us, the consumer must be protected at all costs. Where large retailers will not locate in rural areas, one finds the independent retailer serving the consumer. The Government has a large role to play ensuring the independent retailer's survival.

It is also anti-competitive to deny one section of the country proper funding for balanced regional development. Compared with the low prices of Luas and the DART, getting to and from employment for people in the west by car is high. More than half of our graduates must leave to get employment elsewhere. Today, NUI Maynooth released a report on rural Ireland which spoke of the need for the proper implementation of the plans for regional development already in place. I urge the Government to include the shortfall in the capital envelope in the forthcoming Estimates. For example, a capital underspend of €200 million on transport was identified in the Indecon report of the mid-term review of the national development plan. I also call on the Government to properly implement the national spatial strategy. These are issues that must be addressed in the Estimates. The Government claims there is much to be done, but it really must be done in the west. It has been neglected so far.

Paddy McHugh (Galway East, Independent)
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I compliment Deputy Hogan for tabling this motion. Reform of the Competition Act is long overdue and the Competition Authority needs to be assessed to establish its effectiveness, to determine if it is adequately funded with the resources to complete investigations within an acceptable timescale. In a nutshell, the authority must be effective, properly funded and have the necessary investigative powers. If rated under these criteria now, the authority would score very poorly.

Several months ago, the nation was enthralled by the Eddie Hobbs programme, "Rip-Off Republic". As a member of the Joint Committee on Enterprise and Small Business, I thought I would have to get an early flight from Galway to be on time to witness the humiliation of Eddie Hobbs by the chairman of the committee, Deputy Cassidy. Like everything else, it never happened. Deputy Cassidy became the best PR person for Eddie Hobbs and in the process brought the committee into the murky pond of party politics. For several months, the committee focused on the groceries order. It took the unanimous view that it should be retained. Imagine my surprise when the Minister for Enterprise, Trade and Employment announced he was abolishing it. Or did he? What is the current condition of the groceries order? Is it a case of the Tánaiste and Minister for Health and Children, Deputy Harney, wanting it eliminated and the Minister for Enterprise, Trade and Employment, Deputy Martin, being forced to oblige and defy his own party's Deputies? They had told the nation they supported the order's retention. Is it instead a typical fudge, where nobody, including the Minister, knows the exact story of the groceries order?

Dan Neville (Limerick West, Fine Gael)
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I propose to share time with Deputies Kehoe, Ring and Deenihan.

I welcome the opportunity to speak on this important motion and congratulate my colleague, Deputy Hogan, on introducing it and on the work he has done over a considerable period of time in combating rip-off Ireland. He was the first and most important person to highlight the whole aspect of the rip-off culture. Eddie Hobbs took it to a different level with the medium of television and the humour to bring it to a mass audience. I commend Deputy Hogan for his consistent work and the tenacity with which he has followed the issue over a considerable time.

There is no doubt that the Government has failed the people in controlling prices. It appears unconcerned and almost disconnected, feeling that it is almost not a political issue. It has had a wake-up call on the issue over the past few months, and it now knows that it is a serious political matter. The people of Ireland are deeply annoyed and, of course, out of pocket because of the rampant rip-off the Government has tolerated.

In many instances, the Government has facilitated such rip-off and acted against the consumer. In spite of an announcement by the Minister, we still do not know the state of the groceries order. Is it to be abolished, amended or left as it is? This matter is still up in the air. If the Government was serious about controlling prices, a decision would have been made quickly and decisively on the issue. Even still the Minister prevaricates and fails to bring the matter to a conclusion.

The Government has facilitated 36 distinct stealth taxes and it has ensured that the Competition Authority is without teeth. It is essentially a cover-up for inaction by the Government. If the Government wants to be serious on the issue, it must give real power to the Competition Authority, ensuring that it has the competence to carry out its work and bring issues of concern through the legal system.

The authority's work must be funded and it should have adequate resources to carry out the role it has been charged with, instead of being stymied. The authority should have real power to ensure that its work is completed. If the Government is serious about ensuring a level of competition, a competent and well-funded Competition Authority with real power must be introduced. This authority could process complaints through a quick, effective and efficient system, with an early decision emerging. Complaints and concerns should not drag on for weeks, months or even years. Such circumstances equate to a cover-up.

Competition in areas identified by Deputy Hogan has a serious impact on the economy. The level of competition in banking is an example as it is an important resource for any functioning economy. The cartels and high charges evident and the consequential profits in banking highlight and expose the lack of competition. We have spoken for many years about the insurance sector. While there has been some improvement, the insurance industry still does not have the competitive edge to bring insurance costs to an acceptable level. We should highlight the difficulty experienced by young people in obtaining insurance.

Several Deputies have mentioned competition in the cement industry. This has been an important matter over the past few years because of the need for cement in the production of housing. There is a further need for housing development. There is differential pricing for home heating and gas, which is squeezing out smaller players and leading to cartels of big operators. In addition, young people are being charged third level fees.

Paul Kehoe (Wexford, Fine Gael)
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I am pleased to speak on the motion as it relates to the most vital aspects of people's lives and the manner in which they make a living. One of the first duties of any Government should be to ensure the prosperity of its people. This can only be guarded by keeping a close watch on the cost of living and having clear competition. We have mounting evidence the Government is failing in this duty. The rates of anti-competitive practices are on the rise and nothing is being done to stop them. Worse still, the Government is one of the parties contributing to the rising cost of living and the lack of competition in the economy.

On its own initiative, Fine Gael attempted to act on the huge rise in costs for the Irish household when it began a website highlighting rip-off Ireland, which has been an outstanding success. It led directly to the exposure by Eddie Hobbs and RTE of the Government's role in rip-off Ireland. Deputy Hogan initiated the rip-off Ireland website.

John Dennehy (Cork South Central, Fianna Fail)
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That sounds very bad.

Paul Kehoe (Wexford, Fine Gael)
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Is the Deputy jealous?

John Dennehy (Cork South Central, Fianna Fail)
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If he started rip-off Ireland, I am afraid it would get some reporting.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Deputy is entitled to praise me in the same way that others would praise the Minister, Deputy Martin.

Paul Kehoe (Wexford, Fine Gael)
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This forced the Government to take our idea and come up with its own agency. Unfortunately, this shows all the signs of being watered down by the Cabinet to a much weaker body than we had envisaged.

The party initiated its tax-back campaign to help the ordinary worker get back what is rightfully theirs. The people were getting no help from the Government on this issue. Most of all, we spelt out week after week the appalling waste of money by the Government. There is too much to point out. We spoke of the weakness of the Competition Authority, pointing out how since 1996 it has not secured one meaningful conviction of breaches of any competition legislation. When such anti-competitive practices are evident, it is difficult to believe that a State agency charged with being a watchdog has been unable to secure a conviction in ten years. That is nonetheless the case.

A proper Government should be outraged at the lack of protection for the consumer. A Government doing its job would have long ago acted, giving its State agencies real power, but the Government has not done so. Faced with a Government that has deserted the people, Fine Gael had to initiate its own ideas. My party had to develop its own policies, and the governing parties are only too willing to take these on board.

At our national conference in Cork, we called for reform of the Competition Act 2002. This reform is long overdue and the dithering by the Minister on the groceries order was the last thing that the consumer needed. There should be a Competition Authority that will instill great fear in those who plan to rip off consumers. In this I include the State, the biggest consumer of all and one that is funded by the hard-working taxpayers. An effective Competition Authority should not wait for complaints to be made as the rip-off merchant has by that time gone or covered its tracks.

We are calling and planning for a proactive authority which will actively seek breaches of competition legislation. It must have a large staff who are skilled in investigation and who know what they must look for. If such investigators are at large, there will be a rise in prosecutions. Once there are enough prosecutions, I am confident there will be a drop in the numbers of consumers being ripped off. Such an authority must be properly funded and provided with the powers and legislation that will enable it to act effectively but the Government has shown no sign of doing so.

Deputy Hogan put forward the excellent idea of imposing time limits on investigations, which would have the effect of clearing the case load at a greater rate and speeding up the court process. It would also send out the right message to the people who believe that, even if they are caught, it will take forever for their cases to get to court and they can make their money. In addition, Fine Gael proposes that specified bodies be given the right to make so-called super complaints to the authority on any market practice that is contrary to the best interests of the consumer.

Michael Ring (Mayo, Fine Gael)
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The Acting Chairman might tell me when my five minutes are concluded.

I compliment Deputy Hogan on moving this motion and on his work in consumer issues. We have not had a real Minister for the past five years. The current Minister is so incompetent in his Department that the Opposition was able to bring forward these proposals and show the people what was happening in respect of rip-off Ireland. I compliment Mr. Eddie Hobbs on stealing Fine Gael's idea. I compliment him on seeing it as a good idea and taking it further. He showed what is happening in Ireland.

The Minister of State should scrap the Competition Authority immediately. It has no powers, functions or role. Unless the Government is prepared to give it these, there is no point in having jobs for the boys and girls, which is happening. The authority does not have the power, resources and legislation in place to deal with any query. I will provide a number of examples. The banks have got away with murder since the foundation of the State. The Dáil was brought back into session to pass emergency legislation when AIB made its mess and the taxpayers were needed to bail it out. Taxpayers had to pick up the tab.

The banks also got away with murder in respect of offshore accounts. Who was crucified when the State, the Government, the Civil Service and everyone involved with the Revenue Commissioners let this happen? The small people on the ground. There was not one prosecution in this matter. People in rural Ireland did not know what an offshore account was, although they undeniably knew they were fiddling their taxes, but the banks got away with it, which they will always do. As a man once said to me when I entered politics, the rich will always look after the rich and the legislators will always look after the rich, which was proven in this case. People were so worried that they committed suicide. Elderly people received threatening letters from Revenue but did not know what they were about as they had been misinformed. They were told by the banks what to do while the banks walked away.

Why has the Competition Authority not done anything in respect of the price of soft drinks? One can go into a pub, discotheque or wherever and pay €2.40 or €2.50 for Coca Cola, orange or water. Why has the Government, the parties of which have been in power for almost 20 years, not dealt with this rip-off? It is nothing but a rip-off when one pays this amount for water, Coca Cola or orange. It is time everyone knew there are large margins that nobody has done anything about. Just like the situation with the banks, no one has been prepared to do anything.

Why did the Government not take on the builders? They bought land, left it, decided how much development would take place each year, controlled the prices and created the housing crisis. Not alone have builders bought the land they are now using but they have bought land in other areas to ensure they will control the land banks for the next 20 years. The Government has done nothing. These builders have been too friendly with politicians and Governments over the years.

If the Competition Authority is to stay in place, we should give it powers, such as to take on local authorities, which are the greatest rip-off merchants of all. They believe that, when they have a crisis, a problem or must pay their staff benchmarking increases, they can pass the cost onto consumers without needing to justify their charges. It is time something was done.

Jimmy Deenihan (Kerry North, Fine Gael)
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I compliment my colleague, Deputy Hogan, on his introduction of this timely motion. The high cost of doing business has been acknowledged in several public policy reports. Over the past number of years, the Irish inflation rate has exceeded that of most other EU economies. While the current level of inflation in Ireland is in line with that of the euro zone and the United Kingdom, the cost base is significantly higher due to higher inflation in the past.

Price increases are being sought or have already been approved for electricity and other energy and postal services. For example, while inflation this year to date has been 2.2%, an examination of the increase in prices that will affect the tourism industry will show that water supply, refuse and other services increased by 21.3%. Energy products, including electricity, increased by 15.7%. In other areas that would not obviously affect tourism, health costs increased by 6.6% and hospital services increased by 13.2%, all of which are above our rate of inflation. As Deputy Ring said, the increase of 21.3% in local service charges certainly makes the tourism industry very uncompetitive vis-À-vis others.

We talk about rip-offs across the country every day. There is a difference between people who are ripping off and those who must overcharge due to pressure and the Government's stealth taxes. It is important to make this distinction as people are forced to charge more due to their overheads. It must be accepted that most of the operating environments, such as interest rates, exchange rates, international growth and oil prices, are all outside the Government's control but domestic policy is fully within its control. The current policy of low profit tax and low income tax levels is essential to the Government's fiscal policy and is something on which most parties in this House agree.

Other aspects of fiscal policy are very much against the interests of the tourism industry in particular. Ireland has among the highest alcohol excise taxes in the EU and the world. A study carried out last year by an individual at UCD showed we placed more excise duties on wine and beer than anywhere else in the world, which inflates prices in tourism. There are high and continuously growing local government taxes and charges, which I have mentioned.

Regarding VAT rates, which I hope the budget will address, Ireland has the second highest in respect of hotel accommodation within the euro zone, second only to Germany, which is at 16%. In the international community, it has the sixth highest VAT rate in hotel accommodation. Ireland's disadvantage, especially in the area of business tourism, is that business people who come here cannot reclaim their VAT whereas they can in Northern Ireland. The national conference centre was announced today but people will not come here unless the VAT regime is changed.

Ireland has followed a fiscal model of low profit tax and low income tax, which we all support, but we must change in respect of indirect taxation. The Competition Authority has a critical role to play in this area. We must lower our energy costs and increase competition, such as in the wind generation sector. Currently, wind energy is not attractive here due to the costs of entering the ESB grid. Were there lower rates, more energy would be generated. Energy costs are one of the reasons this country is less competitive. The Competition Authority has a significant role to play in the regulation of costs such as the cost of drink.

Deputy Hogan's motion notes:

The publication by the Competition Authority of an annual report on the implications of State action for competition in the provision of goods and services which identifies areas where the State, either through direct involvement in the economy, or through regulatory systems, has restricted, inhibited or prevented competition. . .

It is important that the State takes its share of responsibility at this stage. I hope the Government will accept Deputy Hogan's proposal.

Tony Killeen (Clare, Fianna Fail)
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The Irish Competition Authority is one of the most proactive and successful enforcement agencies of competition law in Europe. I congratulate the authority on bringing proceedings in a very significant case to the Dublin Circuit Criminal Court last Monday and on being the first enforcement agency in Europe to secure a criminal conviction for a competition offence.

I would like to mention one aspect of the Competition Authority's work which has not been referred to in the debate, namely, the authority's role in regulating mergers and acquisitions in the economy. I applaud the authority for the way in which it has it has successfully taken on this responsibility under Part 3 of the Competition Act. The authority's regulatory procedures are open and transparent. All notifications and determinations are published and the authority must consider all submissions made to it, whether in writing or orally, by the parties concerned or by any other party.

I wish to comment on one issue raised in the debate, namely, the confusion which seems to surround the concept of predatory pricing. Predatory pricing is an abusive and anti-competitive practice that acts against the interests of consumers. It is a tactic employed by a firm that is dominant in its market and involves the sale of product below cost for a prolonged period to damage or eliminate a competitor. I stress the phrase, "below cost" in this context because Deputy Howlin seemed to suggest that predatory pricing involved the sale below fair market value which he defined as including a reasonable profit margin for the seller. Not alone is this not an accepted definition of predatory pricing, it is not a definition that is supported by EU case law on the topic. Predatory pricing is the sale below cost. Cost in this case means the marginal cost of the product, according to EU case law.

Chapter 7 of the report on the groceries order prepared by the Department of Enterprise, Trade and Employment, deals with this issue in some detail and I urge Deputies to read it. Furthermore, as the Minister, Deputy Martin, said, predatory pricing should not be confused with other forms of low cost selling, such as for promotional reasons, to dispose of old stock, or to match a competitor's prices. The groceries order was not a suitable vehicle to prevent predatory pricing because it was unable to make the distinction between legitimate low prices and genuine acts of predation.

On the other hand, predatory pricing is now prohibited by section 5 of the Competition Act which outlaws the abuse of a dominant position in a market. It is important to stress that the concept of dominance under section 5 of the Act can be measured either in the State or in any part of the State. Therefore, the Act is sufficiently flexible to allow the authority or the courts to tackle predatory pricing in all circumstances, including small local markets.

The Competition Authority has extensive powers and a dedicated division of expert staff who investigate allegations of companies abusing a dominant position. The circumstances of each allegation are unique and each complaint is assessed case by case. The penalties for any undertaking found to have engaged in predatory pricing are up to €4 million or 10% of the company's turnover. These are substantial penalties. I repeat the point made by the Minister, Deputy Martin, that these penalties are much greater than those which applied under the groceries order and are likely to act as a real deterrent to any business contemplating predatory pricing.

In the course of his speech, Deputy Hogan listed about 18 home heating oil distributors in counties Galway and Mayo that he claimed had been driven out of business by large distributors. He said that this did not make him confident that the business was being conducted properly. This was also reported in The Irish Times. It is a matter of public record, however, that of the 18 companies listed by Deputy Hogan as having been subjected to unfair and anti-competitive practices, eight are being prosecuted by the Director of Public Prosecutions on indictment for alleged breaches of the Competition Acts.

This Government continues to see competition as the life blood of a vibrant economy and we are committed to removing unwarranted constraints on competition in all sectors of the economy and placing the consumer at the top of the policy agenda. Increased competition in the economy has a critical role to play in helping to keep prices under control. A good example is the aviation industry where competition from low cost airlines has substantially reduced the cost of air travel.

While much needs to be done to encourage competition in some sectors of the economy, the Government is working hard to bring about these changes. The Competition Authority has proven itself to be a powerful advocate for such change as well as being a fearless, independent and effective enforcement agency. Since the enactment of the most recent Competition Act, the resources of the authority have virtually doubled. Today it employs 52 people across a broad range of skills and disciplines necessary for the performance of its functions.

There is every reason to have the utmost confidence in the performance by the authority of its advocacy and enforcement functions. The authority enjoys a unique reputation internationally as evidenced by the quality and experience of those who have been attracted to come from other parts of the world to work at enforcing Irish competition law.

The Government keeps the resources available to the authority under close review. For example, further funding for the authority has been sought in the context of the Estimates process and I am hopeful that the authority's enforcement resources will be expanded in 2006.

Tom Hayes (Tipperary South, Fine Gael)
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I wish to share time with Deputy Hogan. I am delighted to have an opportunity to speak on this issue and to support this timely and important motion. This Government has failed the people with regard to prices. There is no greater concern for many people than the price they pay for their goods. The lack of competition in many areas has increased prices over a long time.

The oppressive cost of living in this country is a great cause of hardship for the majority of people. In one of the most highly developed countries in the world, there must be real choice for people. Insufficient resources have rendered the Competition Authority a lame duck and, as a result, since 1996 it has not secured one significant or meaningful conviction for breach of the Competition Acts. If the Government is serious about opening up the markets, resources must be put in place to make competition a reality. No organisation can function properly without proper resources.

There are many examples of the lack of competition and electricity is high on that list. Irish citizens are faced with a lack of choice in the electricity market. It is not a luxury commodity but a necessity. The cost of electricity has risen astronomically over the past three years in particular. This rise in electricity charges has an effect in every area of industry, agriculture and tourism. It has also affected the lives of older people and has put pressure on school authorities and boards of management. Anywhere we work or play needs a supply of electricity on a daily basis and there is no real competition in that market. This is an issue that has been neglected by the Government.

Another example of this Government allowing non-competitive practices is in the regulation of veterinary medicines. The Minister for Agriculture and Food stands idly by and watches as the Government prepares to bring in EU regulation which will give control to the vets of this country of the medical supplies needed in the agricultural sector. This area was competitive in the past but the Government and the Minister are now single-handedly putting in place a structure to take away the competition.

Until now there was plenty of competition between the veterinary medicine suppliers and the veterinaries, but the Minister is taking that away. Tourism is another example of where we have seen a significant rise in costs in recent years. As a result, Ireland has a bad name internationally and people see Ireland as a high cost tourist destination. This is bad for employment and for the country. All the investment in the tourism industry will go to waste simply because we have not applied competition and tried to control competition in the tourist market.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I thank the speakers who contributed to the debate on this important issue. I am disappointed the Government has tabled an amendment to this reasonable motion, which calls for additional resources for the Competition Authority to do its job properly and for a change in the way the Competition Authority does its business in terms of imposing fines rather than being tied up in court action, and removes the issue causing clogging of the system of work in the Competition Authority, as the Minister of State, Deputy Killeen, pointed out in terms of mergers and takeovers. I wanted to remove much of such work in terms of applying thresholds for turnover that would be exempt from notification from the Competition Authority.

In any case, the most important issue of contention in this debate is predatory pricing. I want to set out exactly why the Minister for Enterprise, Trade and Employment is wrong in his definition of predatory pricing. The Minister claims that there is no need to legislate for predatory pricing as it is already prohibited by the Competition Act 2002, but he is wrong on this issue. There is no express mention of predatory pricing in the Competition Act, under either section 4 which deals with anti-competitive arrangements or section 5 which deals with abuse of dominance. The Minister seems to be relying on legal precedent from the European courts, in the Akzo case, that predatory pricing is an abuse of dominance where it is carried out by a firm that is dominant and therefore caught by the general provisions of section 5, but it is critical to understand that the Act contains no express prohibition of predatory pricing.

This is further evidenced by the failure of the Competition Authority to take a single prosecution for predatory pricing since its establishment in 1991. Accordingly, for the Competition Authority to initiate a prosecution for predatory pricing, it must first establish that the party involved is dominant, which under European law typically means that it has either a national or local share in excess of 35%. Recently, the Competition Authority interpreted a local newspaper company, which is a subsidiary of the Independent Group, as not being dominant despite having a market share in excess of 65%.

The Minister is wrong, predatory pricing is not expressly banned by the Competition Act and is only rendered illegal if, which is a big if, the Competition Authority determines that a party is dominant. In the grocery trade, for example, none of the current players would be regarded as dominant, either on a national or local basis. Tesco, for example, with 26% of the national market share is not dominant despite being the subsidiary of a global retail giant. Similarly, the discounters are way down the dominance scale.

The Minister's refusal to expressly outlaw predatory pricing is curious. Announcing his decision to revoke the groceries order last week, the Minister declared that he intended to strengthen the Competition Act by making some practices — hello money, resale price maintenance and unfair contract terms — illegal. He mentioned nothing about long-term agreements or about how we can pass on to consumers the discounts and rebates that all of us know are being subsumed into the retail sector. Is he changing the long-term agreement arrangement in the context of the Competition Act?

I pay tribute to the Oireachtas committee, chaired by my colleague, Deputy Cassidy, of which I am a member, for the investigation it carried out on the grocery trade. Following much investigation where all the players were brought before us, the committee clearly came down on the position of reforming the Act and the groceries order to ensure that predatory pricing was banned and that discounts and rebates, in other words, the benefits of volume buying, were passed on to consumers, but the Minister ignored that.

The Minister is trying to have it every way. He is trying to spin that he is abolishing the groceries order to give the impression that this will be good for the consumer but, unfortunately, he failed to publish at the same time the necessary changes in the Competition Act for the small print to protect the small suppliers and to ensure that there is choice, diversity and a balance in the trade that will continue to give the necessary competitive edge in the food sector. It is curious that the then chairman of the Competition Authority, Dr. Fingleton, was more worried about a particular sector of the economy that has shown in the year to June 2005 a reduction in prices of 1.5% and had no particular inclination, no more than the Progressive Democrats, to deal with issues of anti-competitive practices like access to the professions, particularly the legal profession and the medical profession, where we need to free up an enormous amount of competition because of the astronomical increases in prices which professional bodies have been charging, uninhibited by anybody in the Competition Authority or by any Minister in recent years. Therefore, the Minister's refusal to ban predatory pricing is misplaced.

The motivation for his refusal to expressly outlaw predatory pricing is worth exploring. The likelihood is that he is merely following a Competition Authority edict — he is doing what he is told by the authority — that it can deal with the issue at its discretion without the need for new legislation, and his officials, who have suffered regulatory capture by the authority, will not question this advice. At best he is naive, but at worst he could be accused of being afraid to tackle the vested interests in the economy that have a large market share but which are unlikely to be dominant. If it could be illegal for someone to engage in predatory pricing with a 35% market share, should the fact that a company has a 30% market share absolve it of onus not to engage in predatory pricing? The practice should be rendered illegal, it should not be based on the level of market share of the player. I want to see consistency and equity displayed by the Minister and I am disappointed that he has failed to take that opportunity.

I thank Deputies Ned O'Keeffe and Glennon whose hearts were in the right place on the issue with which we are dealing. They realised the motion before the House is reasonable and balanced. As Government Deputies, they cannot support this motion but they certainly gave the Minister much food for thought by spiritually looking at this motion in the right context.

The most hypocritical contribution came from Deputy Fiona O'Malley. The Progressive Democrats has a serious problem about banning predatory pricing in spite of the fact that in 2001 the then Minister for Enterprise, Trade and Employment, Deputy Harney, listened to all the views in the grocery trade and banned predatory pricing, kept the groceries order in place and found no need for change. What hypocrisy. The then Minister, Deputy Harney, also ensured that no investigation was ever carried out of their friends in the professional bodies across the board who were contributing enormously to the higher charges in this economy.

The record of the Government on competition policy since 1997 leaves much to be desired. In an area where consumers should have benefited from increased competition, greater transparency on pricing and the liberalisation of sectors which were formerly operated as State monopolies, consumers have been the real losers. On many occasions while Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Harney introduced regulators into various sectors of the economy and Ministers followed suit across various areas of activity. With the introduction of regulatory agencies, we were supposed to see the introduction of more competition with more players being able to get into the marketplace, but what we got was more price increases.

I am critical of the energy sector in particular. The Commission for Energy Regulation was set up and, while I do not want to cast aspersions on the individuals involved because it was their job to look after the energy sector when they were originally in the Department of Public Enterprise and they are suffering from regulatory capture, there has been an increase in energy prices of 61% in the past three or four years. So much for regulatory authorities. If that is the price one must pay for more competition and regulation, we are better off without them. That applies across the board in many different sectors, and there is empire building in terms of regulatory agencies. All sorts of legal, accountancy and other entities are being created in all these regulatory authorities without accountability to this or the other House, and the criteria on which they were appointed need to be reviewed.

I was very surprised at the attitude of the Competition Authority in a recent debate on the groceries order. The report issued on the order by the Minister when he was announcing his intentions stated categorically there is no evidence the order has led to higher prices. However, this was not the advice the authority was giving to the Department. It said explicitly that one could make a saving of €500 per year as a result of lower prices, in spite of the fact the CSO, in giving evidence to the Oireachtas committee, punctured that argument successfully.

Competition is important to the future of this economy and it is very important that we have liberalisation of the sectors. However, we want to achieve it in a balanced way and give the necessary resources and powers to the Competition Authority such that it can have a proper enforcement function rather than operate according to a political agenda. The manner in which it has done its business in the past has been quite unsatisfactory. Less red tape is needed in the economy and the authority, if properly resourced, should have a role to play in this regard. I ask the House to support the motion.