Brendan Ryan (Labour)

I welcome the Minister of State, Deputy Kelleher, and his officials to the House to introduce this Bill. The Bill proposes to amend section 35 of the Competition Act 2002 to permit the appointment of temporary members to the Competition Authority. It will enable the Minister for Enterprise, Trade and Innovation to appoint temporary members to fill current and forthcoming vacancies, thereby ensuring that its membership exceeds the statutory minimum requirement to allow it to function properly. Obviously, if the validity of decisions made by the authority is never to be impugned, this is the correct thing to do. Therefore, the Labour Party will support this Bill in principle to ensure that the authority is properly constituted, thereby putting it in the position to carry out its important functions.

This is a short Bill and is quite specific in its intent. The Minister is concerned that an improperly constituted authority would be unable to fulfil its statutory obligations and that any decisions made by members in such circumstances would be open to legal challenge. Despite legal reservations the Labour Party might have in respect of the content of the Competition Act 2002 - I refer to section 4 in particular, which the Labour Party sought to amend with the Competition (Amendment) Bill 2007 - it is appropriate for all sides of the House to facilitate the Minister's efforts in this Bill to address the problems that have been identified. The Labour Party will support the Bill because of this. The Minister has promised the introduction of a comprehensive Bill later in the year and I look forward to debating it on behalf of the Labour Party. For that reason, I see no point in debating what is not in this Bill and simply will deal with its contents. However, as other Members have noted, it is astounding to have arrived at this impasse and this illustrates the failure of the Government to ensure that the Competition Authority had the appropriate membership level in the first place. The authority appears to have been carrying a vacancy in its membership since January 2009 or for almost 18 months.

One item that should be included in the legislation that has been promised for later in the year is a statutory code of practice to bring some sense of fair play to the relationship between suppliers and retailers to which Senator Phelan referred previously. A voluntary code of practice will not work because large retailers are used to being in the driving seat and will not voluntarily vacate it. In the main, power in such relationships rests with the bigger retailers, which constantly push out the boundaries and in many cases are driving small companies and growers over the edge and out of business. Under various guises, "hello money" has been demanded of suppliers by large retailers and I note that many suppliers operate in vulnerable areas of the economy. Many of those involved are not in a position to come forward about this matter, some because they fear being de-listed.

The Competition Authority stood idly by while this was taking place. Its excuse, when its representatives appeared before the Oireachtas Joint Committee on Enterprise, Trade and Employment, was that it had only received a small level of complaints on the matter. As a member of that joint committee, I asked whether, given the nature of relationships in this sector and the certainty that fear would prevent greater numbers of complaints, this should not have been a spur for action. Unfortunately, there has been no action and the authority continues to bury its head in the sand and such practices continue. Suppliers and representative bodies that appeared before the Oireachtas joint committee have indicated that unless action is taken now, there will be few suppliers because most of them will have been wiped out with ever increasing levels of unemployment. Ultimately, we all are consumers and shoppers, many of whom have sons, daughters, nieces and nephews who are employed by such suppliers.

In particular, I refer to the problems encountered by those who are involved in the horticultural industry, which is based to a great degree in my locality of north County Dublin. How can such growers be expected to continue in production when supermarkets are selling two cabbages for the price of one? Growers eventually will be wiped out because it is uneconomic to operate at the level to which I refer. It is important therefore that the Minister should examine this matter in detail and should opt for a statutory, and not a voluntary, code. Growers must be guaranteed a fair margin, as should all suppliers. As I noted previously, the Labour Party proposes that such a statutory code should be introduced and that an ombudsman be appointed to supervise it.

As for Senator Quinn's earlier comments on whether such a code would be applicable to companies the headquarters of which were located outside the country, this could be dealt with under Irish law. Is it Senator Quinn's argument that in trying to deal with unfair relationships, it must be open to Irish retailers to be unfair to suppliers in the same way as are retailers from outside the country? This issue can be dealt with and I do not accept this point. It also is important that multinational retailers are obliged to publish their operating margins for their business within this jurisdiction. At present, they only produce consolidated accounts, which do not afford the correct level of visibility. It will be important to have visibility in this regard, if we are to introduce fairness to supplier-retailer relationships.

We have done a good deal of work in that area in the joint committee and we will have produced a comprehensive report, with cross-party support, that is likely to be of assistance to the Minister as he prepares his more comprehensive legislation. In mentioning cross-party support I should say that Senator John Paul Phelan and Senator Ivor Callely are also members of the joint committee. I hope the Minister and his officials will reflect the findings of the joint committee in the proposed Bill.

The Labour Party supports this Bill in principle but will table one or two amendments on Committee Stage.