Andrew Doyle (Wicklow, Fine Gael)
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Question 5: To ask the Minister for Agriculture, Fisheries and Food if he has made a submission to the Department of Enterprise, Trade and Employment's public consultation process in relation to the introduction of a code of practice for grocery goods undertakings; if he has made a proposal to the EU Commissioner regarding the proposed code of conduct for grocery retailers in view of the plan to publish a report on anti-competitive practices before the end of 2009; and if he will make a statement on the matter. [36519/09]

Trevor Sargent (Dublin North, Green Party)
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The Department of Enterprise, Trade and Employment consulted closely with my Department in preparing the consultation paper for the public consultation process, which was launched last August. Her Department is currently assessing some 28 submissions received from a range of interests. It is my intention to work in close consultation with the Tánaiste in developing a code on the lines of our programme for government .

The proposed introduction of a code of practice for grocery goods undertakings follows public debate on grocery prices and price differentials. The consultation in August was undertaken to address concerns raised about the nature of the relationships between grocery goods businesses and, in particular, in the relationships between suppliers and retailers of grocery goods. The questions asked of stakeholders, including consumers included whether any such code of practice should be voluntary or statutory in nature; how it might best be enforced; whether a separate Ombudsman's office should be established; whether there should be a threshold to limit its application, and what impact application of such a code might have on consumer choice and prices.

Underlying the debate is the increasing concentration of retail power in the hands of a few large supermarket chains. This is an international phenomenon, which has fundamentally changed the balance of market negotiating power in the food chain. It is one factor, although not the only one, contributing to the declining share of the retail price received by producers. Although there is, of course, always potential for some tension in any market relationship, there has been a noticeable trend recently towards greater tension, and even allegations of sharp practice.

At the Council of Ministers I raised the issue of the need for balance in the food supply chain and colleagues in the Council also expressed strong views on this matter. In January there was a discussion on a road map to improve the functioning of the food supply chain. I said then that competition alone cannot act as a sole mechanism to maintain efficient markets. The careful and sensitive use of market management measures can help to maintain balance on the market when appropriate and the use of such mechanisms can assist in the provision of fair returns to producers.

At EU level there is a need to give urgent thought to ensuring that markets function well and that unfair practices are prevented. The agri-food industry is hugely important to Ireland and the EU. The EU needs to safeguard its production base so that it can meet the future demand of its population for food, feed and bio-energy. It is my firm view that retailers must strike a reasonable balance between granting value for consumers and giving to suppliers and producers. Balance between all stakeholders, including suppliers, producers, retailers and consumers may well be difficult to achieve but the Tánaiste and I are committed to working towards mechanisms at EU level.

Andrew Doyle (Wicklow, Fine Gael)
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I thank the Leas-Cheann Comhairle and the Minister of State. It is a fact that three multiples control approximately 70% and five control 85%. It is also a fact that the price of dairy products at the farm gate dropped an average of 34% last year, but only 3% for the consumer. Against this background, the Minister of State claims that the Government will produce something along the lines agreed in the programme for Government, which seems to suggest a voluntary code as opposed to a statutory code.

Trevor Sargent (Dublin North, Green Party)
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No.

Andrew Doyle (Wicklow, Fine Gael)
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The UK tried a voluntary code of good behaviour, but that did not work and it is revisiting the matter and will make the code statutory. Ironically, the Tánaiste published her Bill a day after we published ours, which we intend to lay before the House soon. Our fair trade food information Bill lays out in black and white what is an offence, what penalties can be imposed, retailers' obligations in terms of credit facilities and who is obliged to oversee the area. Commissioner Fischer Boel has indicated that, before she finishes her term, she intends to produce a report on the behaviour in question. It is obvious that, if this is a problem in Europe, it is definitely a problem in Ireland and Britain where supermarket chains seem to demand higher margins.

Why not start at the right place, that is, a statutory code? No compliant retailer would have anything to worry about with our Bill or a statutory code. The chief executive of one group stated that it would add costs, but this is not the case. For example, keeping the requisite records would cost no more than an audit of the business operation. The claim is a red herring. We should put the code on a statutory basis from day one.

Trevor Sargent (Dublin North, Green Party)
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I appreciate the contributions of Deputy Doyle and his party to the ongoing debate. Like him, I would like to act on this matter quickly. Likewise, the Tánaiste has stated that she would put something in place within 24 hours if she could. However, the reality is that there is a process-----

Michael Creed (Cork North West, Fine Gael)
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She said there would be no problem immediately after we published our Bill.

Brendan Howlin (Wexford, Labour)
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This is a priority question in the name of Deputy Doyle.

Trevor Sargent (Dublin North, Green Party)
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I will try not to be drawn. To be carried through effectively and successfully, the process must take into account the fact that the Tánaiste's Department is assessing 27 submissions. We are actively engaging with her Department, given the critical nature of what is at stake for the agrifood sector.

It is not true to say that the code has been predetermined to be voluntary. It is too early to say whether it will be voluntary or statutory. As the Deputy may have read in the review of the programme for Government, there is a clear opening whereby, if necessary, the code will be put on a mandatory basis. However, due process must be followed and everyone with an interest must be heard.

Andrew Doyle (Wicklow, Fine Gael)
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The Joint Committee on Agriculture, Fisheries and Food has received evidence from people who are not directly involved but are interested in this area, such as the economist Mr. Jim Power, Dr. Ciaran Fitzgerald and others. They have discovered that 100,000 jobs will be in jeopardy if we do not address this issue as soon as possible. The Commissioner has identified the matter as a European problem, but must we wait for EU guidelines? Can we not see that the Irish situation is more acute? The facts are there concerning the price differentials between what the consumer pays and what the supplier is paid. It is obvious what is occurring.

Seán Sherlock (Cork East, Labour)
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There is too much consultation.

Michael Creed (Cork North West, Fine Gael)
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Yes.

Trevor Sargent (Dublin North, Green Party)
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As this is a priority question, I must turn a deaf ear to Deputy Sherlock at the moment, but I will talk with him afterwards.

Seán Sherlock (Cork East, Labour)
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That is fine. I am used to that.

Michael Creed (Cork North West, Fine Gael)
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The Minister of State does not need to turn a deaf ear to find-----

Trevor Sargent (Dublin North, Green Party)
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I will answer the question in as straightforward a manner as I can. Commissioner Fischer Boel's opinion and work on the roadmap in respect of the communication on food prices will be implemented by the end of 2009. While having it sooner would be great, Deputy Doyle will understand the importance of the European market for us. While we need to proceed quickly, we cannot do so in isolation from the European Commission. In the meantime, other avenues are open to us.

As the Deputy stated, the supermarket chains dominate the food sector, but this issue must be addressed in its own right. A code of practice, be it mandatory or voluntary, will not change it, but it may be helped by having other access routes to market. There are many ways to address the matter that would allow us to save jobs and create new ones.

Brendan Howlin (Wexford, Labour)
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I am afraid we are running over time on every question in this session.