Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

I move: "That the Bill be now read a Second Time."

Deputies will be aware that on 8 November last, I announced that the Government had decided to revoke the Restrictive Practices (Groceries) Order in its entirety. This decision can only be implemented by means of an Act of the Oireachtas. Thus, the revocation of the groceries order is one of the principal purposes of this Bill. I also announced on 8 November that I intended to bring forward changes to the Competition Act 2002 to deal with certain practices in the grocery trade, including resale price maintenance, unfair discrimination, advertising allowances and what is termed "hello money". These matters are also addressed in the Bill. I welcome that we have been able to bring forward this Bill speedily because any element of uncertainty regarding the regulatory regime and its enforcement is detrimental not only to the public interest but also to the principle of better regulation.

Before I explain in detail the structure and scope of the Competition (Amendment) Bill, I will speak about the background to it. The groceries order has been with us since 1956 and has been subject to periodic review since then. In 1987, the order was amended to introduce a ban on grocery retailers selling products below their net invoice price and, since that time, it has been the subject of intense debate. Trade representatives and business interests defended the order on the grounds that it provided a level playing pitch and a stable business environment that enabled the smallest suppliers and retailers to survive alongside the major international multiple operators. On the other hand, those representing the interests of consumers, including the Competition Authority and, more recently, the new National Consumer Agency, have argued strongly for the removal of the order on the basis that it was anti-competitive and acted against the interests of consumers. Other independent groups, such as the competition and mergers review group in 2000, also recommended that the order be repealed on competition grounds.

In March 2004, almost 12 months ago, the Consumer Strategy Group, CSG, made a series of recommendations for the development of a new national consumer policy in Ireland. It recommended the repeal of the groceries order in its entirety on the basis that it was not a ban on below-cost selling. According to the CSG, the order operated as a ban on selling below net invoice price and, in so doing, kept the prices of grocery goods higher than they otherwise might be. It is fair to say there was little consensus around this view and supporters of the order continued to oppose its removal.

Against this background of opposing viewpoints, I decided to engage in a public consultation process to ascertain the detailed views of all those who might have an interest in the matter. I was concerned to ensure we had a structured debate on the future of the order. I also wanted to ensure there was as much hard evidence as possible on the impact the order was having on a critical sector of the economy. I was concerned to collate the views not only of retailers and consumers but also of suppliers, manufacturers, producers and others for whom the grocery trade is their very lifeblood. Where specialist economic expertise was required to assist in assessing the 600 or so submissions received, my Department ensured this was available through one of the country's largest universities. Legal advice on issues arising was available through the Office of the Attorney General.

My Department's resulting report on the consultation process and its review of the groceries order was published in early November last. This report amounted to one of the most comprehensive reviews of the order in the past 15 years or so. It detailed the order's history and analysed its legal structure, examined changes in the structure of the grocery trade in the period since 1987, analysed the impact on prices and inflation and compared trends in that regard with those in other European countries. It also looked at the regulatory regimes throughout Europe and further afield, and examined the situation in the United Kingdom where no ban on below-cost selling exists. The evidence, argumentation, analysis, conclusions and recommendations set out in the report are the basis for the changes proposed in this Bill. It is appropriate, therefore, that I outline briefly some of its key findings.

The issue that surprises most people when examining the findings in the report is that the groceries order did not provide the type of protection that many thought it did, for either suppliers or small independent retailers. One of the most important findings is that the order never operated as a ban on below-cost selling but rather as a ban on selling below net invoice price. The difference is critical for a number of reasons. In the first instance, the Irish grocery trade operates on the basis of substantial discounts and rebates paid to retailers, which are never placed on the invoice. These discounts were negotiated between retailers and their suppliers in a highly secretive, arbitrary and discriminatory manner. Retailers were free to pressurise suppliers into providing higher discounts and thus any protection afforded to suppliers was limited.

As these discounts and rebates were never placed on the invoice in the first place, they could not be passed on to the consumers in the form of lower prices and so became part of the retailer's profit margin. In practice, by specifying a value for the goods on the invoice, suppliers were free to determine the price the retailers could then charge consumers for those same goods. Retailers could be confident there was a minimum price below which the competition would not sell and were thus protected, not from unfair competition, but from all competition. It is little wonder the trade has fought so hard and so long to keep the groceries order in place. What sector of the economy would not give its right arm for that type of protection?

It has been argued that one of the greatest benefits of the order was that it prohibited predatory pricing in the grocery trade. That is simply not true. It makes no attempt to define cost price and, for that reason, was simply incapable of addressing the issue of predatory pricing, which is all about selling below cost price. The term "net invoice price", which is used in the order, is found to have no economic rationale. It was no more than an administrative convenience. This is extraordinary given the impact the order had on the trade and on consumer welfare generally. Thus, one of the greatest so-called benefits of the groceries order has been shown to be nothing more than an illusion.

Other findings in the report are just as damning. It had been argued that the H. Williams Group, which went out of business in the 1980s, was a victim of predatory pricing and that the groceries order had been introduced as a direct result of that company's closure and as a means of protecting smaller retailers from the power of the multiples. This argument ignores the fact that the H. Williams Group was itself a multiple. It is clear from media reports, contributions made to the Oireachtas at the time and from later evidence given to the Restrictive Practices Commission that the closure of the H. Williams Group was as much the result of its weak financial position as it was of any price war. Moreover, the groceries order was made some months before the company went out of business.

In the 15 years after the 1987 order came into being, there was a decline of some 20% in the number of grocery stores. Almost 2,500 stores had closed by 2002. In the meantime, the market became more concentrated as a result of the significant growth of the symbol groups, the Spars, Centras and so on. The order was not protecting the small independent retailers and was not preventing market concentration. Our grocery market is more concentrated than the market in Britain where there is no groceries order.

Since the mid-1990s, the rate of food inflation in Ireland has been three times that in the United Kingdom and almost twice the EU average. Supporters of the order said this was the result of the higher cost of doing business in Ireland. Why then is the rate of inflation in the clothing sector virtually identical to that in the United Kingdom? That is not easily explained. The most obvious explanation may well be the correct one, that the Irish grocery trade is protected from competition.

We have been told that if we get rid of the groceries order, we will end up like the United Kingdom, where it is alleged some 70% of towns and villages have no shop. The report clearly demonstrates this statistic has no basis in fact. Access to groceries in the United Kingdom is shown to be excellent. Nearly 90% of rural households in England live within 4 km of a petrol station, most of which have a convenience store attached. Almost 80% of rural households live within 4 km of a supermarket.

The ghost town Britain report, about which we heard so much during the debate on the order, is found to argue that the price of fresh meat and vegetables in edge-of-town supermarkets is often higher than in local, independently owned outlets. Ghost-town Britain is an anti-globalisation argument which has nothing to do with below-cost selling of groceries.

It is against the background of these findings that I bring the Competition (Amendment) Bill before the House. In addition to revoking the Groceries Order, the Bill proposes to amend the Competition Act 2002 to deal with practices such as unfair discrimination, advertising allowances and what is termed "hello money".

By way of background, I should explain that the Competition Act 2002 prohibits anti-competitive behaviour in the economy generally. The Act is enforced by the Competition Authority. Prohibitions in the Act are divided into two categories. Section 4 prohibits agreements and concerted practices that have the effect of distorting competition. The undertakings participating in such activity do not have to be dominant for their activity or conduct to be captured by the provisions of section 4. Section 5 prohibits similar unilateral conduct, where no agreement or concerted practice is necessary, on the part of dominant undertakings.

The purpose of the amendments contained in the Competition (Amendment) Bill 2005 is to strengthen the existing provisions of the 2002 Act by prohibiting certain unilateral conduct on the part of non-dominant undertakings in the grocery trade. These are practices which it is feared might emerge following revocation of the groceries order and which might not be captured by either section 4 of the 2002 Act or section 5 because they are not the conduct of a dominant undertaking.

Section 1 inserts new sections into the 2002 Act. Section 15A includes new definitions. Grocery goods are defined as food and drink for human consumption, including alcohol but excluding anything sold in a restaurant or bar. This definition will cover the vast bulk of products sold in conventional grocery stores. A grocery goods undertaking is defined as any undertaking engaged in the production, supply or distribution of grocery goods. A retailer is defined as anyone who sells grocery goods to the public.

Section 15B(1) prohibits resale price maintenance in regard to the supply of grocery goods. Resale price maintenance is the practice whereby manufacturers or suppliers specify the minimum prices at which their goods may be resold. This practice was prohibited by section 3 of the groceries order. Notwithstanding this, the provisions of the order preventing sale below invoice price legitimised the practice, a contradiction which my Department's report suggested had the potential to bring the Statute Book into disrepute. This section simply restates a prohibition that has been around since 1958.

Section 15B(2) is designed to prohibit unfair discrimination in regard to the supply of grocery goods. This means that a supplier cannot offer preferential terms to one buyer over another when the transactions involved are equivalent in nature. This simple provision replaces the hugely convoluted and ineffective provisions in the groceries order that did not operate as intended and allowed discrimination into the trade by means of secretive and arbitrary payment of off-invoice discounts. The language used in section 15B(2) is based on language already in section 4 of the 2002 Act.

Section 15B(3) prevents an undertaking from forcing another to pay for the advertising or display of grocery goods. Article 18 of the groceries order prevented the payment of such advertising allowances in all cases. This Bill takes a slightly different approach by preventing any undertaking from being forced into making such payments. This would not prevent collaborative advertising arrangements which are mutually beneficial to the participants and which promote competition by bringing the availability of grocery goods to the attention of consumers.

Section 15B(4) prohibits a retailer from forcing a supplier to pay "hello money". This is the practice whereby a retailer demands a payment from a supplier before agreeing to stock that supplier's products. As in Article 18 of the groceries order, the circumstances in which the practice will be prohibited include on the opening of a new store, an extension to an existing store or a change of ownership of a store. However, this Bill seeks to amend a serious flaw in the order by specifying a period of time, 60 days, during which the prohibition applies.

Section 15B(5) replicates language already used in section 4 of the 2002 Act and states that the conduct described is only prohibited when it has the object or effect of preventing, restricting or distorting competition in the grocery trade, either in the State or in any part of the State.

Section 15C provides a right of action for any party aggrieved by prohibited conduct. Such a right allows the party to apply to the Circuit Court or the High Court for injunctive relief and damages, including exemplary damages. The Competition Authority will have a right of action under this section. That completes the new part being added to the Competition Act.

Section 2 applies section 30 of the Competition Act 2002 in respect of the right of action specified under section 15C of the Bill which I have already outlined. Specifically, it applies section 30(4)(b) of the 2002 Act which does not allow the authority to delegate the power to initiate legal proceedings to a member of the authority or a member of staff of the authority.

Section 3 applies section 45 of the Competition Act 2002, which contains provisions in respect of authorised officers of the Competition Authority and their warrants of appointment.

Section 4(1) of the Bill then revokes the Restrictive Practices (Groceries) Order 1987. Subsections (2) to (4), inclusive, apply standard interpretation provisions. Such provisions are also part of the new Interpretation Act that come into force on 1 January next. They are replicated here for avoidance of doubt.

Section 5 contains further repeal provisions in respect of the statutes listed in the Schedule to the Bill. These statutes are confirming Acts in respect of orders made under the former Restrictive Practices Acts, which are now redundant. Section 6 contains standard provisions in regard to Short Title, collective citation and commencement.

There is no provision in the Bill to prohibit predatory pricing for the simple reason that such conduct is already prohibited by section 5 of the Competition Act 2002, which outlaws abuse of dominance. I have received a large number of representations claiming that the current law on predatory pricing is not strong enough and that there is a need to prohibit predatory pricing by non-dominant retailers. It has also been claimed that no large Irish retailer would be deemed to be dominant and that all such retailers would be free to engage in predatory pricing without fear of legal restriction.

These assertions are incorrect in a number of ways. Predatory pricing by a non-dominant firm is a contradiction in terms. Attempting to prohibit predatory pricing by a non-dominant retailer would mean applying a definition of predatory pricing in the grocery trade that is different to the definition that applies in all other sectors of the economy, different to the definition enshrined in international case law and different to the definition applying in most other jurisdictions. It would also introduce a level of protection into the grocery trade that is not available in other sectors, which is unjustified and which would prevent pro-competitive low pricing strategies that benefit consumers. That is precisely what happened with the groceries order.

Predatory pricing is clearly illegal under Irish competition law and it is punishable by fines of up to €4 million or 10% of turnover. The Competition Act 2002 is based on Articles 81 and 82 of the European Community treaty. There is a strong body of case law which shows that these provisions can be and are used to prohibit and punish predatory pricing. Furthermore, dominance does not have to be assessed on a national basis. An individual supermarket outlet in a rural town, whether part of a multiple, could be considered dominant within the meaning of the Competition Act 2002, and thus prosecuted if it engaged in predatory pricing.

The United Kingdom, in a major inquiry into the potential takeover of Safeway supermarkets in 2003, found grocery markets to be essentially local. Indeed, competition concerns in the retail sector are often assessed in terms of their effects on the local area. The law on predatory pricing is stronger and broader than the words written in the legislative text. Departing from European Union case law and attempting to define precisely predatory pricing in legislation would seriously weaken and undermine competition law in Ireland and harm consumers more than it would help them.

This is a short but very important Bill. The groceries order has been comprehensively analysed and subjected to detailed legal and economic investigation. That analysis and investigation has shown that the order has not served the purpose for which it was intended and it did not protect many participants in the trade as was claimed. The order was anti-competitive and acted against the interests of consumers. The grocery business is about more than mere grocery stores. It is about all those involved in the production and distribution chain, right back to the factory floor and the farm gate. It is also about consumers. The reality is that for industry to survive and prosper in a global economy, it must be able to compete with the best. To that end, it is not just right and proper that we guarantee fair competition, it is essential that we do so. However, we will not do industry any favours by continuing to protect it from all competition on domestic markets. That is what the groceries order did and that is the type of protection some critics of this Bill would like to see remain in place.

Our competition laws are not designed to protect competitors, they are designed to protect competition. There is a world of difference between the two. We must ensure that competition laws are kept under review and enforced vigorously when needed. That is why the Government has more than doubled the resources available to the Competition Authority in the past five years. It is the reason, moreover, we have provided the authority with an additional €750,000 in 2006 to boost its investigative and enforcement capacity. It is the reason we brought forward the Competition (Amendment) Bill 2005.

I will be happy to expand on any of the foregoing and to clarify and answer any questions Deputies may have during Committee Stage. In the meantime, I commend the Bill to the House.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

I welcome the Competition (Amendment) Bill 2005. Having listened to the Minister's speech, I notice he did not draw any conclusions about the impact this legislation would have on consumer prices, similar to the advice and submissions he received. The clear submissions, on which he relied mainly to make these changes, were from the Competition Authority and the Consumer Strategy Group. The latter group said that if the Minister revoked the groceries order and made the necessary changes to the Competition Act, we would have a 9% reduction in prices almost immediately. However, a few months later the chairperson of the Consumer Strategy Group decided that perhaps that figure was a little high and indicated a figure of 3% and said that in 12 months' time that may happen. The second issue was that Dr. Fingleton, the former chairman of the Competition Authority, said that consumers could expect to have up to €500 million put back in their pockets if the groceries order was revoked. I note the Minister ignored all this in his contribution. He was wise to do so.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

It is safer to make no prediction.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

I never have.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

It is with a deep sense of irony that this House debates this Bill. The Government has done almost nothing to improve the lot of our consumers. It has presided over an appalling lack of competition in every area from energy to insurance, from transport to communications. It is only since the Government was stung by a TV series broadcast last August that it is attempting to pull the wool over the eyes of an electorate whereby it wants to ignore the fact that it imposed no fewer than 41 stealth taxes in the past three and a half years. The Minister is attempting to reinvent himself as the champion of consumers in the context of this legislation, but already this attempt at political deception will fail.

This Bill is short in terms of words on pages and on benefit to consumers. The Minister can be assured that because of our total opposition to predatory pricing and market dominance, we will not support the Bill in its current form. It will become clear to him from his colleagues on the backbenches and to Fianna Fáil and PD Deputies who support the concentration of the market, particularly the grocery market, in the hands of the few, particularly the hands of the multiples, that in the long run consumers will experience less choice and competition and, ultimately, higher prices. In addition, the suppliers of indigenous Irish produce to those particular multiplies and retailers will be forced to outsource in order to remain competitive. Therefore, the consequent reduction in employment in the food sector is a worrying feature for many people.

Fine Gael believes that we cannot accept the Bill as it stands because it weakens a number of key protections for consumers and relaxes certain regulations dealing with the relationship between suppliers and the major multiples with no benefit to the consumer. I had no difficulty about reviewing the groceries order after it having been in place for 17 or 18 years, which we advocated, but what we needed was for the some of provisions of the groceries order, which were of considerable assistance to achieving a level playing pitch, to be included in this Bill. We wanted to see rebates and discounts and a guarantee that they would be passed on to consumers. There is nothing in the Bill to suggest this will happen.

We are particularly concerned with section 15B of the Bill. This section has five subsections. Subsection (1) prevents grocery goods undertakings from fixing prices, which is a good measure. Subsection (2) is a general anti-discrimination measure which prohibits dissimilar conditions being applied to equivalent transactions. This, again, is a measure we fully support. Subsections (3) and (4) deal with the issue of "hello money" and prohibit its payment, with which we also agree. However, we have a difficulty with subsection (5). It states, "Conduct described in subsections (1) to (4) shall not be prohibited unless it has as its object or effect the prevention, restriction or distortion of competition in trade in any grocery goods in the State or any part of the State". In other words, acts that are blatantly anti-competitive and were, up to now, automatically deemed to be illegal are to be subject to some vague test that will, in almost total certainty, render their prohibition inoperable. The result of this section of the Bill is to effectively open the door to "hello money", discriminatory practices and price fixing — the very anti-competitive practices the Minister stated he wanted to eradicate.

Fine Gael believes, and has consistently stated, that the groceries order should be replaced with a new law such as this legislation but which would take account of the changes required to the Competition Act and of the modern trends in the grocery trade. The new law, when enacted, should protect our communities from predatory pricing by multiples and ensure we have choice and diversity in the food sector where multiples and local shops can compete on a level playing pitch. We wish to see a facility in place that will ensure the banning of predatory pricing and allow discounts and rebates to be passed on to consumers and not put into the pockets of the retailers. It is for these reasons and the fact that such provisions are not included in this legislation that we cannot support it. The Bill, as it stands, will replace the groceries order with something worse. It adds a ridiculous, needless "get out" clause for all those who wish to abuse their market dominance and eliminate the competition.

In his response I want the Minister to explain the reason section 15B(5) was included; what benefit it could possibly bring to consumers, who lobbied for its inclusion, how it can be interpreted other than as a charter for anti-competitive practices and if he received advice not to include it, and, if so, why he ignored it. He might also explain what drove him to make something that is currently illegal, as it is blatantly anti-competitive and anti-consumer, now acceptable, unless the case for the prosecution is able to meet a series of tests which are not even set down in this legislation or in the Competition Act.

Ireland is crying out for change in the context of competition. Some 41 new stealth taxes have been imposed on everything from energy to stamps. We have suffered a drop of 22 places in our international competitiveness ranking. Dublin is now a more expensive city than Paris and Vienna and Ireland is the most expensive country in Europe. That represents Government action in terms of imposing additional charges and taxes in order to make the country uncompetitive. Government inaction on the consumer agenda is undoubtedly part of the reason we are in this mess. However, if we really want to tackle the root causes of our high cost base, which feature will be more vital in the years ahead, it is time to take on the anti-competitive behaviour and rid this country, once and for all, of the cartels and agreements that work against the consumer interest. The Minister has set out his objective to do that, but he is doing the opposite. The Bill signally fails to do that in this case.

In his review of the report of the public consultation process on the groceries order which was published in October, the Minister told the House that report recommended the 2002 Act will be significantly strengthened in order to specifically prohibit resale, price maintenance, unfair discrimination and "hello money". With the inclusion of section 15B(5), the Minister flies in the face of that statement and his Department's recommendation in that report. He is doing exactly what his critics said he would do, critics whom he ridiculed as being anti-consumer, anti-competitive and anti-change. The Minister has failed to live up to what he said when his Department's report was published. It is interesting that in his Department's report, to which he has frequently referred, one of the conclusions in one of the paragraphs I read was that there is no evidence that the abolition of the groceries will lead to lower prices. That is what the Minister and the Department concluded from all of the submissions received, which is an interesting conclusion, considering all the big change and hype the Consumer Strategy Group and the Competition Authority said this change would make. That is in the report.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

The Deputy should read it again.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

I read it carefully.

This Bill was prepared by the Minister at breakneck speed, and he attempted to rush it through the Houses before the end of the year.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

We did not. That is unfair.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

The Minister did. Not surprisingly it has all the hallmarks——

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

We allowed the Deputies to go to Hong Kong.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

On the State's business.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Deputy Hogan's remark is unfair.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

Not surprisingly it has all the hallmarks of having been hastily drafted and presented because there are many flaws in it. The abolition of the groceries order and the introduction of these changes are clearly meant to take the heat off the Government for its inaction towards Irish consumers for a long time. Faced with the ever increasing costs, particularly those in the State sector, and in the context of considerable consumer concern about being ripped off, this Administration has demonstrated inaction and neglect in terms of the plight of Irish consumers. Aside from direct increases in costs of goods and services within the State sector, the Government has consistently failed to give consumers the benefit of competition in key sectors. Instead of truly taking a positive and pro-consumer stance on consumer issues, all we have had is lip service. For example, we have a new National Consumer Agency, which has been presented as the saviour for Irish consumers, but it has very little power. All I have seen in recent times has been the spending of plenty of money on soft PR initiatives. Few who have witnessed the activities of the National Consumer Agency since its establishment on an interim basis cannot be inspired with confidence that it will be the saviour of Irish consumers. In particular, it has failed to give any indication of the areas it intends to tackle on behalf of consumers. It seems to be considering many areas. That is hardly surprising, given that the Consumers' Association of Ireland was ignored when the members of the agency were being appointed.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

It was not.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

It was. No representative of the association was appointed to the agency.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

The Deputy is wrong again.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

Such people should have been appointed, rather than the friends of the Minister, the Taoiseach and the Tánaiste.

Jerry Cowley (Mayo, Independent)
Link to this: Individually | In context

I ask Deputy Hogan not to invite interruption.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

I am being provoked.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

The Chair should admonish the Minister for heckling Deputy Hogan.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

Perhaps the Chair will say something to the Minister about provoking speakers.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

Deputy Hogan has the floor.

Jerry Cowley (Mayo, Independent)
Link to this: Individually | In context

I ask the Minister to allow Deputy Hogan to speak without interruption.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

There is some precedent in this regard. The National Consumer Agency can consider the Competition Authority's disgracefully low level of performance and output. Few entities established by the Oireachtas have made so much noise while doing so little for consumers over the years. The authority has failed to connect with the issues of utmost importance to people. It has preferred to concentrate on highbrow and esoteric studies, which have usually been produced too late to influence Government policy. The authority has not yet produced a final report on legal services, even though the Minister has announced his proposals in that regard. It has failed to produce a final report on architects, even though the Government is proceeding with the Building Control Bill 2005. The authority's report on insurance was produced long after the Government established the Personal Injuries Assessment Board, with the support of the House, to tackle the issue of high insurance costs.

The Competition Authority's record in the area of enforcement has been dire. There is no evidence that it has successfully deconstructed any cartels in the economy, or taken on any hard cases in a manner that has benefitted consumers. The authority's approach to the financial services industry, which resulted in a weak and mealy-mouthed report, can be contrasted with the work of the National Consumer Council in Northern Ireland, where a hard-hitting and focused report had the banks in that jurisdiction in a state of crisis as they sought to stave off an investigation by the Office of Fair Trading.

It is clear that the authority is not operating as an effective body. It does not have a chairman and there is no sign of a new chairman being appointed. There are vacancies in key areas of its membership. For example, the head of its anti-cartel division left that position some months ago. The Minister is relying on some of his officials to ensure that the authority has a quorum so it can do its business.

The Minister does not seem to care about the poor performance of the Competition Authority and the impact that is having on consumers and businesses. He seems content to allow the authority to perform at a low level. By giving it new powers in this legislation, the Minister is placing his faith four square behind the authority. He has shown his hallmark unwillingness to take measures beyond those contained in the manila covered brief handed to him by his officials. Fine Gael has published some constructive policy proposals which will make the Competition Authority more resourceful and effective on behalf of consumers. I ask the Minister to examine our proposals on Committee Stage.

The Minister's approach to competition policy is illustrated by the provisions of the legislation we are debating, which has been presented on foot of a consultation process on the future of the groceries order. I have mentioned some of the problems I have with the Minister's report and his subsequent legislation. It is interesting to review the manner in which some of the submissions which were received by the Department of Enterprise, Trade and Employment have been presented in the Department's report. It is clear from the report that the Department decided to remove the groceries order before it received any submissions on the matter. Having read the report, I have to express strong concern about a policy decision being taken on the basis of one side of an argument.

I find some parts of the report particularly disturbing. For example, the report dismisses the views or perspectives of parties with views contrary to those of the Consumer Strategy Group or the Competition Authority. That represents an arrogant dismissal of the genuine concerns of people who will be directly or adversely affected as result of any changes which will be made. The negative attitude to the positions of those who have traditionally supported the groceries order was hard to understand until I read the foreword to the report. I learned that the evaluation and assessment of submissions was carried out with the assistance of an academic from Trinity College who is a well known opponent of the order and whose work is also referred to on an ostensibly objective basis in the course of the report.

I was particularly disconcerted by the report's cursory dismissal of the valid concerns expressed by the few non-vested interests to express a perspective on the groceries order and competition in food retailing. I am a member of the Joint Committee on Enterprise and Small Business which received some impressive submissions about the retail food sector from the Society of St. Vincent de Paul, Crosscare and the Combat Poverty Agency, which is a statutory agency. The committee was particularly impressed by the agencies' support for many of the measures which should be included in this legislation, but are being excluded as a consequence of the provisions of section 15(5)(b), which I mentioned earlier. The Competition Authority and the National Consumer Agency would do well to emulate the standard of the presentations made by the agencies in question whose valid concerns have been ignored.

The Minister, Deputy Martin, has criticised the groceries order and the measures in it on the basis that they lead to higher consumer prices. His departmental officials have failed to establish that this is the case, however. They have not adopted the flawed analysis presented by the Competition Authority in this regard. One telling difficulty with the Department's analysis of the groceries order, in the context of the legislation before the House, is that neither the Minister nor his officials have indicated the likely consequences of the abolition of the order in terms of consumer prices, competition, employment and investment in the food sector. Members are aware of the recent sad news from County Waterford concerning Cappoquin Chickens. I suspect that similar announcements will be commonplace in the next few years as the changes being introduced by the Minister in this legislation take effect. I will discuss my concerns about the provisions relating to predatory pricing later in this debate.

I have concerns about the Department's use of statistics and data on the provision of food services in the UK. I have serious doubts about the Department's contention that there is no difficulty in the provision of food shopping in the UK. The Joint Committee on Enterprise and Small Business will take up this matter at a later stage. It is interesting to note that since the Department published the report, a group of MPs in the UK has issued a report calling for major action to prevent further deterioration in the provision of food shop facilities in that country. Why would they do that if there were no problem?

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

Is the Minister familiar with that report?

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

As the Department stated in its report, there is nothing wrong with people using the statistics which best illustrate their own case.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Where do the Deputies stand on all of this?

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

We are keeping the Minister to account.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

They are playing both sides of it.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

We know what side the Minister is on. As I said, the Department of Enterprise, Trade and Employment accepted in its report that there is nothing wrong with people using the statistics which best illustrate their case. That is a criticism that might also apply to the Department.

I have serious concerns about the provisions the Minister is introducing in this legislation. The key objection to the groceries order was that it prevented consumers from accessing the discounts which retailers were receiving from suppliers. What part of this legislation ensures that they will be able to access such discounts in future? It was argued that the order's definition of below cost selling maintained an element of resale price maintenance, in effect preventing retailers from passing on wholesaler or supplier discounts. There is little evidence to support the existence of this practice, although there are clear anecdotal indications that people feel it is happening. We needed to see evidence of it in the Department's and the Minister's reports, but we did not get it.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Why not?

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

I do not know why we did not get it.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

We did not get the evidence because the sectors did not want to give it.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

What——

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

The Deputy knows damn well why not.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

I had no——

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Nobody was volunteering the amount of the discounts they were giving.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

The assertion——

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Come off the stage, Deputy Hogan.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

Did the Minister know that this practice was taking place just by looking into his heart?

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Nobody I have met has denied the existence of discounts.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

I have actually——

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

No group has denied it.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

I am supporting that view.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

The only information they would not give related to the exact amounts.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

We brought them in. We met them individually.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

I have the floor, a Chathaoirligh. I did not interrupt the Minister.

Jerry Cowley (Mayo, Independent)
Link to this: Individually | In context

I ask the Minister to stop interrupting.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

I thought I was entitled to intervene in response to the Deputies' comments.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

No, the Minister is not entitled to do that.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

I assumed by the gestures of Deputy Hogan that he was inviting commentary.

Jerry Cowley (Mayo, Independent)
Link to this: Individually | In context

The Minister is entitled to intervene only with the permission of the speaker.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

I apologise if I was interrupting.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

I remind the Minister that I would like to see discounts and rebates being passed on to consumers. The Minister had the opportunity to receive many submissions on the matter and to produce a report, but there is nothing in the report to suggest that such practices are happening or to indicate what the Minister intends to do about them. The problems in this regard again cause me to highlight my difficulties with the performance of the Competition Authority. In this area, as in many other areas, we are legislating in a vacuum because the Minister has not provided the evidence and key information that would allow policy makers to make informed and accurate decisions about the consequences of legislation for key sectors and consumers.

Fine Gael, in advocating a review of the groceries order, which has been in place for 17 years, called on the Government to put legal mechanisms in place to ensure that discounts and rebates are passed on to consumers, rather than ending up in the pockets of retailers.

In the retail grocery sector most of the key players deliberately and consciously obscure and conceal from public gaze information about their profitability and turnover. We have no information on the profitability of the multiples and no details on their turnover, and there is an absence of information to enable us determine whether they are making super normal profits through the maintenance or retention of these discounts. The Minister has a blind spot about this issue and has failed to tackle a vested interest to get them to reveal their profitability and their margins so that we can assess whether the discounts are huge or small or whether they can be passed on.

In a reply to a parliamentary question I tabled last year the Minister steadfastly refused to take measures to compel these companies in the context of amending the Companies Acts to reveal their profitability. I am puzzled as to why that stance continues to be maintained particularly given concerns expressed by the consumer strategy group and the national consumer agency about the absence of this information. Perhaps in the course of his reply to this Second Stage debate the Minister will enlighten us as to whether he has changed his mind on this issue.

There is one body that has the power to get all this information, the Competition Authority, but it has failed to do so. Its inaction has done Irish consumers a further disservice. The national consumer agency is conducting a campaign about giving consumers information. Details on the profitability of large retailers is one aspect of information that Irish consumers are entitled to receive and the Minister should stop protecting them.

I have particular concerns about the legislation presented on the basis of what it says about predatory pricing. This is the nub of the matter and an important aspect of the legislation. The Minister has consistently stated that existing competition law is sufficiently robust and appropriate to deal with the issue of predatory pricing. I presume he has a legal opinion from the Attorney General who changes his mind regularly and has done so recently. He changed his mind yesterday on one piece of legislation. He reversed engines completely on the issue of imposing administrative fines in connection with one Bill. It seems it can be done now whereas it was unconstitutional a few months ago.

On the issue of predatory pricing there has been no decision by the Competition Authority or the Irish courts to date under the Competition Act 2002. I do not know how the Minister can give assurances that existing competition legislation covers predatory pricing. We have no case. We are depending completely on EU law so that it is untested in this jurisdiction under the Competition Act 2002. How can the Minister make that assertion?

According to my legal advice, having regard to case law, the provisions of the Competition Act 2002 do not provide sufficient protection for retailers in respect of aggressive pricing tactics for two reasons, first, the difficulty of establishing dominance, which is a complex economic and legal exercise. Given that only one of the multiples in the grocery trade, the largest player in the market, has a share of 25%, that is a long way from what is defined in the Competition Act 2002 and interpreted by the Competition Authority as dominance. Its definition of dominance in the newspaper trade is 65%, yet it was not regarded as dominant in the Drogheda Independent case.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

That is not my interpretation.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

The second reason is the question of proof required to establish predation. I have been advised that cases on predatory pricing may give rise to huge costs for any supplier or customer advocating a case to the High Court in regard to predatory pricing. Who will take the risk of putting themselves out of business by the evidential burden of costs or by losing customer share, if they lose the case, by aggressive tackling on predatory pricing? It is a big problem for a person to take on a case as it is very expensive and is likely to continue for two or three years. My advice is that there is a logical inconsistency in the approach adopted by the Minister in the Bill. He is prepared to accept that certain activities, such as hello money, unfair discrimination and resale price maintenance are not appropriate in the context of issues that came under the groceries order and that he wishes to put into the Competition Act, which come under threat with section 15(5), but he is not prepared to do the same in regard to predatory pricing. The question is why.

In response to a direct question on whether the Competition Act 2002 provides a sufficient safeguard against predatory pricing in the retail grocery trade my advice is that it does not stack up for the following reasons. It does not provide a sufficient safeguard because there are significant difficulties in establishing predatory pricing, in particular in terms of the definition of what is predatory pricing. One would require extensive economic evidence to establish in any given case whether the pricing is predatory and to obtain that evidence extremely extensive discovery would have to be made. There could be no certainty of success given the case law in this area and the very small number of cases that have successfully established predatory pricing in the context of EU law. Linked to that is the difficulty of establishing the dominance necessary to make predatory pricing unlawful. It is a difficult area. The Minister is incorrect to suggest, therefore, that existing competition law adequately covers the issue of predatory pricing. It is clear that existing competition law does not present a viable or practical means of addressing predatory pricing activities by large multiples in Ireland. That will be an issue of contention on Committee Stage.

It is clear that amendments will be needed on Committee Stage. My primary concern is that the Bill will merely serve to increase the powers of the big players in the market to the detriment of consumers, the food industry and the independent retail sector. It will do so in an atmosphere where there is no transparency on performance of pricing and where there is no effective block or check against the excesses or abuses by these significantly large companies in the local marketplace. The Minister must recognise there is a wide body of opinion in the House, including on the Government backbenches, and outside the House that recognises the need to ensure fair competition and that all consumers can have the benefit of low prices, selection and diversity in retailing.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

It is a negative Bill.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

The Bill is fundamentally flawed and needs to be amended if it is to deliver true benefits to consumers——

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

The Deputy is against it.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

——that it ostensibly set out to provide. I will bring forward amendments to ensure consumers receive benefits from what the Minister is trying to do. The Minister has not done so.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

The Deputy is going against the consumer.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

The Minister has been against the consumer for a long time. Now is the time for the Fianna Fáil backbenchers to sort the Minister out.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

It is time for Fine Gael to sort itself out.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

Minister, you can spin all you like, but what you are doing is concentrating the market in the hands of big business——

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

From the——

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

May I finish without interruption?

Jerry Cowley (Mayo, Independent)
Link to this: Individually | In context

If the Deputy addressed his comments through the Chair he would be able to finish without interruption.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

The Minister is not listening.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

I am listening and I am taking notes.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

In the present configuration of the legislation in which the Minister promised so much and delivered so little, he is anxious to satisfy big business at the expense of consumers.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

Conscious that this debate will adjourn at 2.20 p.m. I shall confine myself to the 21 minutes available to me rather than have a few minutes carryover. I shall begin by saying something positive. At least in the legislation the Minister has brought forward he has made a decision on something, and for that we should be grateful. Huge debate has surrounded this issue over a protracted period. That debate has centred around significant potential consequences in making changes that are proposed by the Minister in the legislation. The Minister has made his choice. He assured the House, as he did previously at the launch of the review of the report of the public consultation process undertaken by his Department and in the other House, that the societal damaging consequences predicted by many of the changes intended to be put in place will not come to pass. I am minded to refer to the hit television series, "Yes, Minister". When Ministers found themselves in that position, the senior civil servant would say, "courageous". The Minister has taken a grave responsibility upon himself and, as Deputy Hogan and those of us who have watched this for two years have said, without any great evidence to back up the assertions and the confidence he has presented. Only time will judge and the Minister will have moved on to other things by then, perhaps even to greater things. One way or another, society will live with the consequences of this decision, narrow and all in its encompass, but potentially of major impact in societal terms in the way the grocery trade is delivered to the people in future.

The Restrictive Practices (Groceries) Order 1987 was put in place and maintained for the past 18 years through successive Governments. It was brought in 18 years ago, not by a reckless Minister but by a very well respected one and a former Taoiseach, Albert Reynolds, for a purpose. It was not mindless, so before we change it we must have a compelling case.

It would be wise to examine in a dispassionate way how the order has impacted on prices over the past 18 years. The Minister is very anxious, both in his contribution here and elsewhere, to be restrictive enough in his focus to deal with the issue of prices, although the consultation paper does deal with other issues. It is interesting that the position of the Competition Authority, both in its public manifestations and in its presentations to the joint Oireachtas committee, exclusively focused on the price issue. That seemed to be the compelling issue, that to have cheaper prices we had to do away with the groceries order. In a nutshell, that is the argument that came in a simplistic fashion from a number of quarters during the course of this debate.

For a moment let us park the other significant issues of access, transport, the ghost town argument and all the rest. We will come back to them. Let us deal on the basis that the Minister and the former chairman of the Competition Authority have put forward, the issue of prices. Figures have been thrown around like snuff at a wake. Some of the figures I have seen have been massaged.

To deal with the price issue, I am happy to rely in my presentation exclusively on the authoritative analysis provided to the Oireachtas joint committee by an organisation that is beyond reproach, the Central Statistics Office. It carried out the analysis of prices over the duration of the existence of the groceries order. The order was signed in June 1987 and came into effect in December 1987. The period from June 1987 to July 2005 was presented to the Oireachtas joint committee for analysis by the CSO, the authoritative, definitive and independent collector of data and statistics in the State.

It is very interesting to look precisely at the effect of the groceries order on the items covered by it in comparison with food, non-alcoholic beverages and alcohol consumed at home, which was the issue it was asked to consider. Eighteen years is a very long period of analysis and it should provide definitive results on the cost of a basket of groceries between items that are covered by the groceries order compared with items not covered by it.

Items covered by the groceries order were cheaper than items not covered by the groceries order for nine of the past 18 years. I see the officials are writing about this. I will give the figures for the individual years. For the other nine years, items covered by the groceries order increased by more than items not covered. For nine of the 18 years, items covered by the groceries order had a greater inflation rate than items not covered and for the other nine years they had a lower inflation rate. If one looks at the figures in detail, as I have done, from 1987 to 2003, the difference in the rate of increase was entirely negligible. They were comparable. The existence of the groceries order was neither here nor there in the rate of price inflation over all the years from the inception of the groceries order in 1987 to the year 2003.

In truth, something did happen after that. Let me give the figures. Items covered by the groceries order had increased in price by 50.9%, that is, from a base of 100 to 150.9. Items not covered by the groceries order had increased by 49.8%, that is, from a base of 100 to a base of 149.8. The measured impact presented by the Central Statistics Office between price increases over 16 of the 18 years, as between items covered by the groceries order and those not covered, was of the order of 1.1%. If this is such an extraordinarily uncompetitive barrier to cheaper prices how can the difference only be 1%?

That information comes from the independent figures presented to us. It is hardly a compelling case for us to take this particular area and look at it as a matter of urgent reform that would require us to launch the Competition Authority into a review and that would make us change the law and announce with fanfare that it would lead to cheaper prices and the devil and all else.

As Deputy Hogan pointed out, we are not as ambitious in the projections now as we were when the argument was still being formulated, for example, the 9% decrease predicted by the Consumer Strategy Group or the prediction by the Competition Authority that it would be worth between €500 and €1,000 per consumer. We are a little bit more circumspect than this. The Minister has made no predictions. If one makes no predictions one cannot be found out. He just knows in his heart like de Valera that it will be a good thing but he is not sure how good——

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

A pragmatic outcome.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

——and that in the fullness of time we would not be found out.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Deputy Hogan wanted the groceries order abolished as well.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

I wanted a pragmatic outcome — lower prices.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

Perhaps I may continue as I have less time than my two colleagues because of the way the order of the House falls.

To be fair, I wish to address another issue. I refer to the past two years, in case the Minister asks about them. There has been a difference between prices of items covered by the groceries order and those not covered by it in the years 2004 and 2005. After 16 years of no change, a very significant gap in the figures of 9.7% opened in the past two years. Something extraordinary happened. The items covered by the order did not shoot up in price. They only increased by 1% in the period presented to the Oireachtas joint committee, that is, from 150.9 in 2003 to 151.9 in July 2005. What did happen is that the non-grocery items fell during that period by 7.6% from 149.3 in 2003 to 142.2.

Since those figures were presented, I have been trying to understand why the items not covered by the groceries order declined in price by 7.6% in that period. I decided to ask the expert in these matters, the chairman of the Competition Authority, when he came before the Oireachtas committee but he was not sure. He did not know. What he predicted was that it was probably because of the arrival in the market of Aldi and Lidl in that period. The great irony is that the evidence they gave to the committee is that, because of predatory pricing, they could not have opened in Ireland had it not been for the groceries order. They present a relatively narrow range of goods and said they would have been devoured and killed off by Tesco and Dunnes Stores in proximity.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Does the Deputy believe that?

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

The Minister can laugh. What would those groups know about the grocery business?

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

They know nothing.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

The Minister knows more, of course. They are merely operating in the business.

What we have over the entire duration of the groceries order makes virtually no difference to the bulk of the sector, except in the most recent two years, and that is not because items covered by the groceries order have dramatically increased. They have not.

I am a little at a loss to know why the revocation of the groceries order became the priority of the Minister. I suppose Eddie Hobbs might be an explanation in that following his programmes, the Minister had to be seen doing something, and the supermarkets, God knows, are much easier to handle than those "ornery lawyers", for example, if the Minister wanted to attack an uncompetitive sector. The lawyers would be a more difficult nut to crack.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

How many party questions will the Deputy ask?

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

The move had much more to do with image than reality. In Ireland, where examples of patent rip-offs are as common as rainy Mondays, why would the grocery sector be singled out as the area to be attacked first given that, as an Oireachtas joint committee report showed, food inflation was a negative — minus 1% in the year to last May — and was the second lowest among the 25 members of the European Union? It is more to do with image than reality, and with the notion that the sector is an easier target than professional legal costs and other professional fees.

In his pronouncements, the Minister has urged us to focus on the Bill's contents alone and not on spatial planning or access by the elderly or those without private transport. However, we cannot consider these issues in a vacuum. By way of reassurance, the Minister tells us that access to groceries in the UK is excellent, as 90% of rural households in England live within 4 km of a petrol station. That is all right, then. For those without private transport, it is fine to live 4 km from a petrol station. When one gets there, one can get a gallon of petrol and one day one might be able to save up for the car. Access is an issue which was very strongly argued by Combat Poverty, Crosscare, the Society of St. Vincent de Paul and other important groups. From personal experience I know how important it is to have access and to be able to live independently.

There is another debate to which the Minister will be well attuned given his former responsibilities in the Department of Health and Children. I refer to care of the elderly. It is important to keep elderly people living at home for as long as possible and access to groceries is an important dimension of that.

Price is not everything. At the Oireachtas joint committee on Enterprise and Small Business, we put the former chairman of the Competition Authority under some pressure. I asked him if there were one shopping centre in Wexford, Tesco, for example, which had the cheapest prices, would it matter if there were no other centre in the vicinity, and he said it would not. From his perspective and that of the Competition Authority, the only important issue was price. Price is not the be-all and end-all. It is very important, but access is important if one is old, infirm and reliant on public transport.

The Minister also told the House that while food cost inflation has been three times the rate of the UK since the mid-1990s, inflation in the clothing sector is virtually identical to the UK rate. The conclusion he has come to is that the food sector is uncompetitive because the clothing sector is clearly competitive. Perhaps this might have something to do with the fact that we have devastated our clothing industry and now import our clothes from China and Morocco. Perhaps it is the view of the Minister that a similar exercise should be carried on in our food industry.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

The Deputy is deliberately missing the point.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

Perhaps we should now be content to bring in cheaper meat from South America or Thai chicken, for example, and have it processed in Ireland.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

We could get our milk from Hong Kong.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

The notion that anyone would give clothing as an example, when we have devastated the clothing industry and that we now——

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

The Deputy is deliberately distorting what I said. The comparison between the UK rates and the Irish rates is the key point.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

The Minister said that if we compare clothing prices in the UK and Ireland, the inflation rate is virtually identical, while there is a disparity between the food prices because the groceries area in Ireland is not competitive.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

I am saying it is more protected.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

Of course one can get cheaper clothing when one has no clothing industry and can import all one's clothes, just as the UK does. The UK has the same attitude to food because it is a food importing country. Ireland is a food producing nation and some of us would like to hang on to food production in this country. It is an important part of our economy. The representations made by the farming industry and food producers indicated they would like not only to maintain food production but increase the volume. That is a factor which has not arisen in this debate but which will impact on the Minister's decision.

I had hoped to examine the specific proposals in some detail but will confine myself to some general remarks on them. I support the objective of the prohibition of resale price maintenance. It was a practice already proscribed in the groceries order and is simply being restated. It is important that suppliers cannot specify a minimum price for the resale of goods. The Minister said he is strengthening the provision in this enactment. I welcome that and support the Minister in that action. I also support the proposal in section 15(b)(iv) to prohibit a retailer from forcing a supplier to pay "hello money". That was intended in Article 18 of the existing groceries order of 1987 and is being presented again in a clearer and more robust manner. That is fine. These are all the aspects we said we wanted to support in any event.

The main area of contention is the issue of predatory pricing and the Minister's view of it. There is no reference in the Bill to predatory pricing. In his Seanad speech, the Minister said that, "hand on heart", this was because it was already prohibited by section 5 of the Competition Act 2002. To bolster the criticised weakness of that Act, the Minister takes refuge in defined European case law. I am always suspicious when legislators prefer to depend on precedents in case law rather than clarity of legislation. If the Minister wants to be clear on predatory pricing, let us as legislators collectively enact clear legislation rather than say that although case law under the Competition Act is weak enough, the judgments of the courts are clearer and we do not want to dislodge those. That is not the normal way in which legislators carry out their business.

What do we mean by predatory pricing? There is a variety of definitions and the Minister added more in his speech. The general view is that it will be all right on the night, a dominant position is what a dominant position will be determined to be and the courts will decide it. As a legislator, I would prefer if we decided these matters.

I would like to say much more but I know my time has expired.

We will get a chance to tease out these matters in some detail on Committee Stage. I have had an open mind to this debate from the start. I wanted to see if a compelling case would be presented. In all the documentation — God knows enough documentation has been produced — I have not read a compelling case. This is a classic example of a decision being made and the argument being marshalled to support the decision rather than the other way around. In any event we will tease out these matters. The Minister has embarked on a risky strategy without any clear justification and it is an unwise move, which I hope we can at least ameliorate on Committee Stage.