Feargal Quinn (Independent)

While normally I have no problem in welcoming most Government legislation that comes before the House, I have some doubts about this Bill. On most occasions, I can support the Minister's ideas but that does not prevent me from questioning some aspects. I am not convinced that the proposed amalgamation of Bord Bia and An Bord Glas is necessarily a good thing. Part of my reluctance about the proposal stems from my own background in business. Despite the fact that such mergers occur often, they sometimes have a bad reputation among business people for good reason. Most mergers fail to produce the promises made when they occur. In particular, they fail to produce such promises for smaller companies. That happens and it can give rise to problems that continue for a long time afterwards. I can see a great deal of logic in mergers particularly, given my business experience, in the case of purchasing. For example, if a small company tags on to a larger one and manages to maintain its own culture and independence, it will gain the benefits of joint purchasing. Some mergers have worked well but often those mergers are recommended not necessarily by people in the business but by merchant bankers and speculators who talk about the synergies of bringing bodies together in order to maximise benefits. In this respect, merchant bankers and speculators in the business world can gain, while the losers are very often the businesses themselves — the people who work in them, the customers and the culture of the organisations concerned. Rarely is there a genuine business case for making mergers succeed and the usual push to a merger comes from factors external to the business. We are debating the merging of two State bodies and therefore the dark forces of the financial world are not in play. A parallel appears when we consider from where the idea of a merger came. The Minister says quite openly that the idea did not arise from within either of the two bodies involved but from an outside force. The idea came from the three wise men, those three men drafted in by the Government in 2002 to dream up spending cuts for the budget. They produced some sensible ideas along with some short-sighted ones. One of their more ridiculous suggestions was the recommendation to abolish the Irish Film Board, a suggestion which I am glad to say the Government had the good sense to throw into the waste paper basket.

The idea of a merger of these two boards survived and we have this Bill before us as a result. It is driven by short-term cost considerations rather than by the synergies about which we sometimes hear. Looking at the two boards from the outside with the eyes of an accountant, there appears to be some duplication and an overlap of functions. Therefore, it seemed a sensible course to remove the duplication by merging the two bodies. There are other considerations we should bear in mind along with the rush to save the few euro we think we shall save.

People who argue for mergers often forget that business entities, whether private companies or State agencies, have a culture inescapably tied up with their individual identity. A successful identity develops into a team with a driving motivation and collective loyalty of its own. I know that An Bord Glas has an energy and enthusiasm centred and focused on what it is trying to do. I know too that the Minister has agreed that it will have seats on the board. However, I express a word of caution. I fear that An Bord Glas will not be able to maintain that focus. The main reason some mergers are not successful is that they destroy the essential energy in an organisation. The promised benefits and the expected financial savings do not always result either. We must tread carefully in order to retain the energy, enthusiasm and culture we have seen previously in small organisations.

I ask for a convincing business argument in favour of this merger to justify the change. In the absence of a compelling argument, my instinct is to leave matters as they are even if that means putting up with a situation which from the outside appears untidy. I am reminded of the old joke people used to tell about McKinsey consultancy reports. The story was that if a group called in McKinsey consultants to examine an organisation, they would make one of two recommendations. If it was a single organisation, McKinsey would recommend it should be broken into several component and separate units but if that had already been done, McKinsey would recommend that all the separate units should be amalgamated to gain all the benefits. I would not say the same about the three wise men. However, no matter how a company was organised, McKinsey could always dream up plausible ways for organising it the other way.

I do not suggest that is what is happening here. However, arguments are sometimes turned on their head in order to justify whatever change is sought. Whether it is a merger or a shake-up, the resulting shake-up of an organisation rarely produces the results envisaged. The costs of making the change always come up to expectations, and often exceed them, and the companies involved in making the recommendation usually get paid.

There is sometimes a fashion in seeking to change how a company is organised. For example, if we look at the public service as a whole, it is somehow ironic that we are debating the merger of two State bodies, as proposed by the Minister for Agriculture and Food, Deputy Walsh, at a time when another Minister is hell bent on breaking up two other State bodies, CIE and Aer Rianta. The situation resembles the McKinsey course; it almost seems as if we must be seen to do something.

I have not heard much by way of a convincing business argument in any of these cases for making any of the changes proposed. Rather than going through what may turn out to be an artificial exercise in merging Bord Bia and An Bord Glas, we would be better examining the marketplace and putting our energy into ensuring that both bodies are fully responsive to it. It will not surprise anybody to hear that I believe Bord Bia has done an excellent job and has had many successes over the past decade. Nevertheless, in terms of organisation, it is seriously flawed. That is not Bord Bia's fault. The fault is demonstrated by the fact that the board's sponsoring Department is the Department of Agriculture and Food.

The Minister may throw his eyes to heaven and think he has heard this before. He has spoken about the expert group, in which I had the honour to participate, which was involved ten years ago in setting up Bord Bia. I had the dubious responsibility of producing a minority report in which I agreed with everything proposed with one exception — that Bord Bia should not fall under the remit of the Department of Agriculture and Food. My reasoning was that the Department represents the interests of producers and that if Bord Bia were included in an organisation representing producers it would always be affected by that balance. I argued that rather than being a food board it would more likely become an agricultural produce board. I did not win the argument.

This is not just a question of semantics. We invariably think in agricultural terms and fail to see the potential of a fully developed food industry. I spoke about this ten years ago. It is interesting in looking at some of the figures now that I spoke about a potential chicken business at that stage. It is interesting too that Thailand and Brazil now export a huge amount of chickens.

Let us suppose somebody came to Bord Bia in 1994 and said he or she wanted to set up a chicken business and make Ireland its centre. If that person explained his or her concept of bringing in chickens from Denmark or France because they had the required flavour and texture and were at the right price, and explained that he or she required the board's help and support in setting up a factory, the Department would have asked him or her to think about producing the chickens in Ireland. The Department would have insisted the business be producer led. It is understandable that the people concerned with agriculture would say that but food people would have said they wanted to create a food business — a chicken eating business rather than a chicken producing business. The potential factory owner would have decided to go elsewhere because the Department or board was unenthusiastic for the project and spent their time trying to get him or her to produce the product here.

An Bord Glas and Bord Bia would be better located almost anywhere other than the Department of Agriculture and Food. Over the past 30 years we have had remarkable success in importing industrial ideas from elsewhere and building a solid position in the global marketplace. We have new high-tech industries in which we had no particular skills or traditions. We succeeded in that area but at the same time largely ignored the potential opportunity waiting on our doorstep — the opportunity to become a world player in the modern food business.

That initiative has been taken by Thailand and Brazil in one sector alone. In that project, our agricultural heritage could have served as a springboard but because our vision was lacking, it became a millstone around our necks. It is certainly true that there have been some fine successes in the Irish food business and in the agricultural industry. I wish all power to the companies which have grasped opportunities and to Bord Bia for accomplishing what it has with one hand tied behind its back. However, what has been achieved is nothing compared to what we could do if we stopped regarding food simply as an outlet for our farmers' produce. We should start instead to look at food as a massive new industrial opportunity this country is adequately positioned to exploit.

While I wish the new body well in its endeavours, I cannot help feeling this energy is in danger of being misdirected. I have a couple of queries. The Minister touched on a point mentioned already today and I am not quite sure I understand the matter. In the supermarket we have been surprised by the recent development of non-food products. I am thinking here of cut flowers, shrubs and garden centre products, which represent a significant business in Ireland worth €500 million a year. I am not sure where that business fits in the context of the proposal before us. Clearly, it is not part of the food industry. In our business we did not always regard cut flowers as part of the food industry, but one finds them in a modern supermarket. I was in a supermarket yesterday where I saw one in four customers buying cut flowers as they walked through the checkout. That is a significant business given that it was fairly minimal ten years ago. It has been helped to a great extent by the energy, enthusiasm and efforts of An Bord Glas. I hope garden centres and businesses which do not involve food and do not quite fit into Bord Bia's remit are not given second class status.

The amalgamation will go ahead and I wish it well. I hope it achieves what is set out in the thinking behind it. However, I caution that where one merges a large and a small body, sometimes the benefits and the culture of each organisation can be lost. I wish the Minister well.