Joe Carey (Clare, Fine Gael)
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I have asked for this Adjournment debate in the context of what has happened here in Ireland and internationally in the banking system. Today, I heard that Barclays bank is to pay €3.1 billion in bonuses on €13 billion profits earned last year. This has become all too familiar in international banks such as Goldman Sachs, and in Irish banks which are lesser in size and international influence, although not in sheer brass neck, and which depend on the state to bail them out when the going gets too tough.

To my mind, one can draw very strong comparisons between this experience and what is happening in our food sector. It has been quite obvious for some time that the major players are fast approaching the "too big to fail" Rubicon. This is a situation that the Minister cannot allow to continue. If these corporations are allowed to carry on unfettered with practices such as hello money and paying unviable product prices to the primary producer or farmer, where will we find ourselves in a short number of years? Indigenous food production and the farming industry will be destroyed and its best international traceability and quality will be squandered under a slogan of bringing the customer the cheapest prices.

Spokespersons for these corporations make much of the fact that food prices are 8.2% cheaper this year than last, but at what cost to their own bottom line? To my mind there is none. They do not publish accounts so we do not know the margins. While the consumer apparently gets cheaper food, the corporation's balance sheet is still intact because the farmer and producer has been squeezed more and more in the past 12 months. This is a totally unsustainable position and the Minister must meet the corporations head on.

I fear it will end in the following scenario. If these companies are allowed get bigger and stronger, the system of food production we have in Ireland and Europe may be undermined to the point where it is no longer sustainable. Large international retailers can source produce from countries which lack our level of agricultural development and good practice. Their farming methods are more intensive because that is the only scale at which profits can be made. If we compromise in quality and safety, we will find ourselves where we are today in regard to banks which are too big to fail. At that stage it will be too late to do anything.

I urge the Tánaiste to take this matter seriously. She must use the legislation at her disposal to deal with the problem and, if that is not sufficient, develop more robust laws. She could start by directing the Competition Authority to deal with the issue immediately.

I understand she shortly will be publishing proposals to ban secret multi-million euro payments within the grocery sector. A draft code of practice for the grocery sector seen by The Irish Times also proposes to appoint an ombudsman to arbitrate disputes between suppliers and retailers and investigate complaints by consumer organisations. The code would prohibit a wide variety of payments currently demanded by big retailers in return for listing or promoting products in their stores. These payments, which have grown significantly in recent years and now amount to hundreds of millions of euro, have been blamed for inflating the cost of groceries for the consumer. The question of whether the code would be voluntary or statutory has been also left open. The consultation paper indicates that the feasibility of a voluntary code depends on the willingness of companies to subscribe to it.

I ask the Tánaiste to put in place these vital safeguards to protect our food industry. She has at her fingertips Fine Gael's Food (Fair Trade and Information) Bill 2009 and I ask her to implement that legislation if she has no alternative proposals.

Billy Kelleher (Cork North Central, Fianna Fail)
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One of the principal functions of the Competition Authority is to enforce the provisions of competition law as provided for in the Competition Act 2002 and the Competition (Amendment) Act 2006. Competition law provides for a general prohibition on agreements, decisions and concerted practices that have as their object or effect the prevention, restriction or distortion of competition. Anti-competitive practices such as price fixing, limiting or controlling production and markets, market sharing, applying dissimilar conditions to equivalent transactions with other trading parties and thereby placing them at a competitive disadvantage and making the conclusion of contracts subject to the acceptance of supplementary obligations are specifically prohibited. The Competition Acts also prohibit undertakings which hold a dominant position from abusing their dominance.

In so far as practices in the grocery goods sector are concerned, existing competition law prohibits undertakings from engaging in particular practices. These prohibited practices include: the imposition of resale price maintenance, that is, the practice whereby manufacturers or suppliers specify the minimum prices at which their goods may be resold; unfair discrimination in the supply of grocery goods involving a supplier offering preferential terms to one buyer over another even though the transactions involved are equivalent in nature; retailers or wholesalers of grocery goods compelling or coercing suppliers into payment of advertising or display allowances, for example, where a retailer seeks payment from a supplier in order to advertise the supplier's goods as a means of attracting customers to the retailer's premises; and retailers compelling or coercing suppliers into payment of hello money, that is, where a retailer demands a payment from a supplier before agreeing to stock that supplier's products. The circumstances in which a practice will be prohibited include the opening of a new store, an extension to an existing store or a change of ownership of a store. These practices are prohibited where they have as their object or effect the prevention, restriction or distortion of competition in trade of any grocery goods in the State.

Persons aggrieved by a practice or abuse prohibited by the Competition Acts have the right to take a private action under the Acts. Relief by way of an injunction, declaration or damages, including exemplary damages, is available. Alternatively, complaints alleging a breach of competition rules may be referred to the Competition Authority for investigation. While a considerable amount of comment and allegations have been made regarding practices in the grocery goods sector, no concrete evidence of prohibited practices has been forthcoming. I not aware that any evidence of such practices has been reported to the Competition Authority or of any proceedings taken before the courts in this regard.

The Tánaiste has on numerous occasions urged anyone with evidence of undertakings engaging in prohibited practices to bring it to the attention of the Competition Authority to allow it to be fully investigated. I have been assured by the Competition Authority that any evidence of such practices will be investigated as thoroughly and expeditiously as possible. In the absence of concrete evidence, however, it is difficult to see how the authority could usefully conduct an investigation of the type sought by Deputy Joe Carey. As Minister of State with responsibility for trade and commerce, I have on numerous occasions urged parties to submit any evidence they possessed of these practices to the Competition Authority. If the Deputy has evidence, I urge him to submit it to the Competition Authority for investigation.

Aside from considerations of competition law, the Government fully recognises the importance of achieving a balance in the relationships in the grocery goods sector which takes account of the interests of the various parties, including the consumer, and the need to ensure there is no impediment to passing on lower prices to consumers. To this end, the renewed programme for Government contains a specific commitment on implementing a code of practice for doing business in the grocery goods sector, developing a fair trading relationship between retailers and their suppliers and reviewing progress on the code with a view to putting in place a mandatory code if necessary. The Government will give effect to this commitment by including in the legislation currently being prepared to merge the National Consumer Agency and the Competition Authority a specific provision allowing for the introduction of a statutory code of practice in the grocery goods sector. The Tánaiste expects to publish this legislation later in the year. Until the legislation is enacted, she will explore with all the relevant stakeholders the possibility of agreeing a voluntary code which would respect the interests of all parties. A voluntary code offers stakeholders the opportunity to develop guidelines which are suited to the dynamics of the Irish grocery goods sector and form the basis of any subsequent statutory code.

The relationship between suppliers and retailers has been also identified as a key concern by the European Commission in its 2009 communication, a better functioning food supply chain in Europe. The Tánaiste is working closely with the Minister for Agriculture, Fisheries and Food on the initiatives proposed in the Commission's communication.

While the negotiation of commercial relationships between undertakings in the grocery goods sector is ultimately a matter for the undertakings themselves, the Government is concerned with ensuring a balance in these relationships, particularly given the important role that the grocery goods sector plays in the national economy. Accordingly, I trust the House will appreciate that the Government's actions in this area have been focused on achieving a fair balance which respects the interests of all stakeholders.