Willie Penrose (Longford-Westmeath, Labour)
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Question 42: To ask the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to claims that some major supermarkets are demanding payment of up to €500,000 from suppliers in order to ensure the continued stocking of their products; the steps she will take to end this practice; and if she will make a statement on the matter. [11441/10]

Mary Coughlan (Donegal South West, Fianna Fail)
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Competition law prohibits retailers from compelling suppliers to make payments for the advertising or display of grocery goods. Anyone who has evidence of traders engaging in such practices should bring this evidence to the attention of the Competition Authority in order that it can be fully investigated.

The renewed programme for Government contains a specific commitment to "implement a code of practice for doing business in the grocery goods sector to develop a fair trading relationship between retailers and their suppliers" and "to review progress of the code and if necessary to put in place a mandatory code". The Government will give effect to this commitment by including a specific provision in the legislation currently being prepared to merge the National Consumer Agency and the Competition Authority that will allow for the introduction of statutory codes of practice in areas such as the grocery goods sector. I expect to publish this legislation later this year.

In the interim period until the legislation is enacted, I intend to explore with all the relevant stakeholders the possibilities of agreeing a voluntary code that would respect the interests of all parties. A voluntary agreement offers stakeholders the opportunity to develop a code most suited to the dynamics of the grocery goods sector and which could form the basis of any subsequent statutory code.

Willie Penrose (Longford-Westmeath, Labour)
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I thank the Tánaiste for her reply. This situation has gone beyond a joke. If Mr. Paul Cullen can find out that Tesco is seeking up to €500,000 from suppliers in order to stock their goods, it is a joke. The Competition Authority has trumpeted its achievements. It has been a waste of space in this area because somebody has to come along and give evidence. Would the Tánaiste agree that such unfair practices are a common occurrence and a regular feature of the supplier-retailer relationship? Is the Tánaiste aware that a report, which has been prepared by Deputy Cyprian Brady, will be issued by the Joint Committee on Enterprise, Trade and Employment next week which examines the issue? The joint committee had to go to great lengths in order to speak to people. Everything one has been told about unfair practices continues because nobody wants to stand up and give evidence on the issue. That is what is happening.

What are the Tánaiste's views on the fact that supermarkets have demanded millions of euro over the past number of months in return for the continuous stocking of products on supermarket shelves? Mr. Paul Cullen has done an excellent job as consumer affairs correspondent of The Irish Times. Is the Tánaiste aware, from media reports, that Tesco has sought €500,000 in order to ensure the presence of goods in 190 stores across the country? It is not unique to any multiple; sums of money are sought by everybody. Does the Tánaiste accept that a sum of money of this magnitude represents normal negotiations with suppliers of produce in this country, as was said in the article to which I refer? Is it the case that demands for pay to play money are not illegal but, rather, pump up prices for the consumer? Suppliers, in effect, are being bullied by the major retailers across the country.

Mary Coughlan (Donegal South West, Fianna Fail)
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The Deputy is Chairman of the Joint Committee on Enterprise, Trade and Employment and I appreciate what he said, as well as what was said by representatives from agriculture. I have met many of the companies involved who, unfortunately, are not in a position to make a formal complaint. However, today I have asked an independent, eminent person to consider bringing to finalisation a code of practice. I and the Minister for Agriculture, Fisheries and Food, Deputy Smith, have discussed the matter. The person concerned has been requested to take that work on board and I hope he will. Arising from that, it is my clear intention to ensure a number of things.

First, we need to provide value for money and choice for the consumer. Second, as a former Minister for Agriculture, Fisheries and Food, we must continue to support the agricultural base in food and beverage production which we have in this country. Third, we need to ensure that we continue to have a strong and vibrant retail sector which provides choice. In reading all of the work which arose from the initial code which was introduced, there are polarised views on this matter. That being said, it is my intention to bring those matters to finality with a voluntary code as a matter of urgency. The code will then become statutory as part of my legislation. I appreciate the Deputy's concerns. I share them, on the basis that many people bring them to my attention and that of my colleagues. I will be appointing someone to do that body of work.

Willie Penrose (Longford-Westmeath, Labour)
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Does the aggressive behaviour from retail companies amount to an abuse of their dominant position? They exert phenomenal pressure on suppliers with whom they have business relationships. The power imbalance between the supplier and the retailer is an important matter. It seriously disadvantages suppliers which are trying to operate profitably. They are subject to requests for "Hello" money in one form or another. It is extremely onerous for a small business which has limited resources and may put them out of business. If our report, which will be launched next week, identifies the issues in the market, it is incumbent upon the Tánaiste to act in order to eliminate them, which requires a statutory code of practice and the establishment of an ombudsman for the retail trade to police its enforcement. That is critical.

Voluntary codes mean nothing to the retailers concerned. They appeal to all of us to put in place voluntary codes of practice. A statutory code such as that in place in England is required. The Competition Commission in the United Kingdom dealt with the issue following a report. The Competition Authority in Ireland did not do so. It wants everybody to gather the evidence. It is great at coming in and blowing its trumpet. It wants one last man or woman standing. That is all it is good for; it claps itself on the back. I fought with it in the past. It is getting a new director general, but I am not afraid to fight in public with such people, and the Minister, Deputy Calleary, knows that. It wants the last person standing, like a Clint Eastwood film with nothing but bushes growing in the ditches and one shop open - a large shop which gobbles up everything else. That is what is happening in the country. The Competition Authority has failed in this area.

Arthur Morgan (Louth, Sinn Fein)
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It is costing jobs.

Willie Penrose (Longford-Westmeath, Labour)
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It is costing jobs.

Mary Coughlan (Donegal South West, Fianna Fail)
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The Competition Authority will investigate issues which are anti-competitive. We have banned below-cost selling and "Hello" money. However, as I am sure the Deputy will appreciate, I want to introduce the code immediately. It will take some time to introduce it, from a legislative point of view, which is why it will be voluntary. The authorities in the United Kingdom have returned to consultation. It is clearly not my intention to do that. My intention is to bring all of the consultative work which is being done together, including the report to which the Deputy referred, and the views-----

Willie Penrose (Longford-Westmeath, Labour)
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The Tánaiste will have it next week.

Mary Coughlan (Donegal South West, Fianna Fail)
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-----of the members of the committee. Enforcement will be the matrix by which we will be judged. It is very difficult to do, but I will include a specific designated person in the new merged authority to deal specifically with the enforcement issues which arise from the code. Although it is difficult, it is clearly my intention to deal with this matter quickly.