Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context

Question 57: To ask the Tánaiste and Minister for Enterprise, Trade and Employment her views on a code of conduct for suppliers and retailers to ensure that consumers are protected and retailers cannot abuse a dominant market position; and if she will make a statement on the matter. [20227/09]

Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context

The relationships between businesses and the contracts entered into by them are essentially matters for agreement between the parties themselves and I have no direct function in the negotiation of such contracts. It is the case, however, that there are specific provisions in competition law which extend to business relationships, including relationships between suppliers and retailers. These provisions essentially prohibit undertakings from engaging in certain anti-competitive practices including price-fixing; applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; making the conclusion of contracts subject to acceptance by the other party of supplementary obligations which, by their nature or according to commercial usage, have no connections with the subject of such contracts; abusing a dominant position; requesting "Hello money"; and imposing resale price maintenance.

As I have said on previous occasions, I would urge anyone who considers that he or she is being treated in an anti-competitive manner to bring his or her complaint to the attention of the Competition Authority, which is the independent statutory agency responsible for the enforcement of competition law in the State. Alternatively, a supplier can bring a private action to the courts either for breach of the Competition Acts or for breach of contract.

In so far as the issue of a code of practice is concerned, I am aware of suggestions that have been made by a number of commentators that consideration should be given to introducing a code of practice to regulate the relationship between suppliers and retailers, and this is being examined by me at present.

The Deputy will be aware that my Department carried out a review of the existing competition law framework in the course of 2008. Legislation is currently being prepared to give effect to a number of changes to competition law arising from that review. While I would have no objection in principle to considering any concrete proposals on the way competition law impacts on the relationships between businesses, any such proposals would need to address how any new regulations would be enforced in practice.

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context

In many ways, this question is connected to Deputy Penrose's previous question.

Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context

Yes.

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context

I wish to echo some of his comments about the position of employees in Tesco. That company is making substantial profits in this country, probably in the region of €200 million per annum, although we do not know for certain. There is a strong case for the company to introduce a profit-sharing mechanism as an alternative to the traditional system of national wage agreements, which has now largely fallen apart.

We all understand the background to this question, in that huge numbers of people are travelling to the North to buy cheaper consumer goods there. Anything we do must recognise that. I welcome the fact that consumer prices are now starting to fall in shops across Ireland, but there must also be a degree of fair trade as well. In a free market there must be access for everyone. We cannot have a situation whereby suppliers are denied fair access to that free market. Suppliers and distributors will have to reduce their costs but most of the costs that disadvantage them are imposed by Government policies on rates and energy charges. Most of those high costs are created by Government policy. Aside from Government action to cut costs, due consideration must be given to introducing a code of conduct similar to what exists in the United Kingdom. That could ensure that, at the very least, Irish suppliers would get fair access to the market. In the meantime, we need to bring down those costs. That is the real issue.

Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context

The reduction of costs, including the cost of doing business, is paramount. Competitiveness continues to be the mantra within my Department.

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context

When will the Tánaiste make it happen?

Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context

Work is ongoing on reducing energy and labour costs, as well as reducing the administrative burdens in doing business. We have seen some reductions but we will continue to strive for further reductions in the cost of doing business. I listened to the quip and I cannot resist the temptation to remind Deputy Varadkar that all but five local authorities have Fine Gael-Labour majorities, so it is in the hands of those elected representatives to deal with rates. The Deputy should consider that. When it comes to the local elections, if people want change perhaps they should be voting for Fianna Fáil, which is acutely aware of the needs of small businesses.

Having said that, a balance must be struck between the sustainability of the food sector and value for money for consumers. We should not have massive variations in retail sector profit margins, which are not in the best interests either of retailers, suppliers or consumers. If we want to continue to have a vibrant retail sector, such balance will be required. Other retailers are doing their utmost to ensure we have Irish products available. My personal view is that Irish products comprise one of the attractions and while we must take the necessary decisions, that cannot be done in a vacuum. Striking a balance in all those issues will sustain a valuable retail food sector, as well as ensuring that we still have value for money.

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context

I appreciate that some work is being done by the Competition Authority in this regard but the end point will have to involve some code of conduct to which both retailers and suppliers can refer. Can the Tánaiste not begin the process now of bringing suppliers and retailers together with a view to drawing up such a code of conduct so that there can be fair access to the marketplace?

Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context

I wish to advise the Deputy that the preliminary work has been done and I will continue to bring that matter to a finality. However, I believe in the role of the Oireachtas and, as I have indicated, I take the view that the Committee on Enterprise, Trade and Employment has a valuable role in pursuing these issues further. The outcomes of those deliberations will enhance the discussions that are taking place publically.