Willie Penrose (Longford-Westmeath, Labour)
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Question 56: To ask the Tánaiste and Minister for Enterprise, Trade and Employment if she has conducted an economic analysis of the impact on the Irish food industry of moves by a retailer (details supplied) to source branded goods from the United Kingdom and the introduction of UK plannograms which would appear to indicate a reduction in the amount of space available for Irish brands by between 40% and 60%; and if she will make a statement on the matter. [19850/09]

Mary Coughlan (Donegal South West, Fianna Fail)
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The relationships between suppliers and retailers and the contractual agreements entered into by them, as with any other parties entering contracts, is essentially a matter for the contracting parties themselves. Retailers, including the retailer referred to in the Deputy's question, have for some time maintained that the costs of sourcing goods in Ireland is significantly greater than the costs of sourcing such goods in Northern Ireland and the UK and that the current structure of the wholesale and distribution cost base in Ireland is preventing the benefits of the euro's appreciation in value over sterling from being passed on to consumers.

The retailer concerned has publicly stated that it changed the manner in which it sources certain internationally branded products as international suppliers were treating its operations in this country significantly differently from how they treated its operations in other jurisdictions such as the UK and that the direct consequence of these changes has been a significant reduction in its prices to consumers. The retailer has advised that notwithstanding the introduction of new internationally sourced products, it has retained its comprehensive range of familiar Irish products and brands.

The Deputy will be aware that I requested the Competition Authority to carry out a study of the retail import-distribution sector as to how competition is working in the sector and whether any practices or methods of competition are affecting the supply of goods and services in that sector. I received the authority's report on 30 April and I am examining its findings. I will publish the report shortly.

Willie Penrose (Longford-Westmeath, Labour)
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I thank the Minister but that was a bureaucratic reply written by bureaucrats. On 5 May Tesco reopened 11 stores in the north east using international brands sourced from UK rather than Irish suppliers and UK plannograms were put in place. Tesco claimed 12,500 prices would be reduced across the 11 stores by an average of 22% but a document, which The Irish Times acquired through good investigative journalism and which was quoted by Philip Boucher-Hayes on RTE Radio 1 last Thursday evening as I drove home from the House, indicates the reduction in a basket of frequently purchased goods is much closer to 8% than 22%.

Is the Minister aware the same documentation indicated that Tesco made a profit of 9.3% in Ireland in 2008, which is projected to increase to 9.5% this year, as opposed to a profit of more than 6% in the UK and 6.5% for its parent company? Its profits are 50% higher here than elsewhere. The Minister stated in the House previously that she was monitoring Tesco's decision to source international brands from the UK and to implement a new formula at the 11 stores I mentioned, thus reducing the space available for Irish brands. Is she aware that Tesco is making such profits, which have long been a closely guarded secret, in Ireland and that, despite these super profits, the company is looking for Irish suppliers to take a cut of least 20%? Is that not a cause for concern?

Job losses were announced last week. According to a number of unions, two Irish suppliers are experiencing difficulties, while according to Philip Boucher-Hayes on whom I rely and to whom I listen carefully, a number of Irish suppliers were told unilaterally without so much as a letter or a telephone call that their shelf space would be reduced overnight without negotiation or explanation. I am concerned about this. Is that good enough in the current climate for our 230,000 food producers? Many of them may lose their place.

Mary Coughlan (Donegal South West, Fianna Fail)
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We have had a great deal of discussion in the House over the past year on the prices consumers have to pay. We continued through the National Consumer Agency, NCA, to conduct comparative analysis, North and South. My view and that of many other Deputies, including Deputy Penrose, was that hedging could not be accepted as a method by which people had shown prices, and that we needed good value for our consumers. Given that the buying and spending power of consumers has been reduced, people naturally expect better value for money. As a former Minister for Agriculture, Fisheries and Food, I am aware that must be balanced with a sustainable Irish food sector.

It has been brought to my attention anecdotally that there are concerns about access to supermarket shelves. I met with Tesco representatives prior to the announcement of a reduction in prices in Border areas. They reassured me that they would continue to have Irish products available. Meanwhile, suppliers have indicated that they are finding it more difficult to sustain their activities. Moreover, it is important to say that any retail sector company, if it is making a profit and can sustain its business, should grant price reductions to consumers as well as giving a fair return to suppliers.

Forfás has evaluated the cost of doing business and I have given my views on that. The Competition Authority has undertaken work on my behalf on the costs from suppliers to the supermarket shelf. We must have a balance - I appreciate the Deputy is trying to do so - between the need for a vibrant food industry and providing value for money to consumers.

Willie Penrose (Longford-Westmeath, Labour)
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Shelf space means availability for people's products. If that is reduced or they are pushed into the background, it means some people will go out of business. Does the Tánaiste agree with that? Strong companies will wipe out many of the weak ones. Is the Tánaiste aware that some major Irish products are no longer finding shelf space? Is she also aware that there is a strike ballot at Tesco and that the company is reducing people's working week by nine or ten hours? They are also talking about cutting out the Christmas bonus for those workers. How much more profit does Tesco want to make from ordinary workers, some of whom will find it very hard to pay their mortgages or car loans? I have met those workers who are not even allowed to speak to the media.

Mary Coughlan (Donegal South West, Fianna Fail)
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The issue of shelf space is one for individual companies but I appreciate the Deputy's concern. His committee could have a role in the context of both reports that will now be made available - the first on the cost of doing business and the second by the Competition Authority. I would welcome further investigative work by the Committee on Enterprise, Trade and Employment, which would be complementary to the work I am carrying out. I am sure the Chairman, Deputy Penrose, might facilitate, that.

Willie Penrose (Longford-Westmeath, Labour)
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I will do so.