Feargal Quinn (Independent) | Oireachtas source

In my first year in this House, on St. Valentine's day I brought in a special kind of apple for each of the ladies in the Seanad and I was very strictly ticked off for gender discrimination. I think it was called a Love apple.

I welcome the Minister of State. I am very honoured that both Senator Mary White and Senator Mary Ann O'Brien had nice things to say about me. Like the Minister of State in his contribution I will concentrate on the question of whether the code should be voluntary or statutory. I have a concern about every time the Government decides - no matter which government - to interfere usually on behalf of a vested interest. As Senator O'Keeffe said, the vested interest could be the independent traders or it could be those who have a view on private labelling, such as the branded products who do not want private labelling. The market place decides this is what happens. We operate in a market place in which many thousands of individual decisions are made. The customers make a choice whether they will go to this shop, whether they will drive past that shop and perhaps go to another town, go to German-owned shop or British-owned shop or a local shop. These are thousands of individual decisions. One of my reasons for being concerned about a statutory code of practice that is geared at Ireland only, is that it will be very difficult to enforce. One may wish to find out how much a company paid or, as Senator Mary Ann O'Brien said about the American company, whether they ask a retailer to contribute to its marketing. This would probably be illegal now in this situation. How can this be investigated if one company's headquarters are in Herefordshire - Tesco - or another's is in Dusseldorf or in Frankfurt? Such legislation will only impinge on the Irish-based retailer or multiple. Musgrave or Dunnes Stores are told we are going to pass a law which will only apply to them because we cannot enforce it with companies whose headquarters are based elsewhere. We would be the only country in the world that would do this.

I refer to those countries that have interfered in the trade. I am not familiar with the current situation but some years ago in Holland the trade managed to say that a shop could not be opened without a licence and only one shop in each street will be licensed, for example. This was done to protect the existing retailers. That could not be in the public interest. Most countries allow competition and the customer will decide where to shop. In 1988 I went to Leningrad and I asked to see a supermarket. Through an interpreter I asked the supermarket manager how many customers he had, assuming that he would not know. He replied that the supermarket had 6,800 customers. I said that was very impressive because the way we counted our customers was by means of the electronic check-outs. I asked him how he had estimated that figure. He explained it was the number of people in this town. I questioned the fact that they would all shop in the same shop but he assured me that they did and if it was a bigger town they would have a bigger shop. The state decided on the size of the shop. On a subsequent visit to St. Petersburg I saw what happened when the market place changed. The consumers rather than the state now made the marketing decisions. We must ensure that we do not interfere very much and only where it is necessary.

I am wary of anything that has the potential to increase prices for consumers. That is my particular concern with regard to the introduction of a statutory code of conduct. It may put more costs onto retailers and therefore these will be passed on to customers. It is dangerous to introduce such a measure against the backdrop of a very depressed sector. As the report states, the retail sector employs a huge number of people. I am wary of the costs to business and the job losses that may result. I refer to the arguments made by Retail Ireland on the possibility of introducing a code of conduct in the grocery goods sector. That body made the very valid point that the Competition Authority has already stated that the retail sector is competitive. I know from my own experience as a retailer that it is an extremely competitive sector where one cannot stand still for a minute. I had to make sure that customers came into my shop instead of to my competitor down the street. That meant giving them the right product at the right price at the right time. We had to innovate to do that. That is why I do not understand how any vested interest such as the State, would say it wanted to discuss whether there should be private labelling or not; that is a decision for the individual customer.

EuroCommerce is the Brussels-based representative body for the 6 million retail and trading companies in the EU. I was chairman of that body for three years and vice chairman for another three years. According to EuroCommerce, unlike other operators in the chain, retailers are under constant pressure from consumers who at all times vote with their feet for their favourite shops and they delegate their bargaining power to retailers. As a result, efficiency gains made by retailers are usually directly passed on to consumers. This translates into relatively small profit margins as compared to other operators in the supply chain they only make 2% to 3% on average. The suppliers and the manufacturers mainly make figures that are multiples of that amount.

This is amazing to consider although it is something of which I am well aware. On top of that, there is a wide variety of European Union and national legislation in the area. To take one example, Retail Ireland has highlighted the Competition Act 2002, which it states "already prohibits or prevents the compelling or coercing of payment or allowances for the advertising or display of goods". In other words, we already are in a position whereby that which Senator Mary Ann O'Brien stated took place in America could not happen. I do not actually understand this as I believe the retailer has the right to decide that it wants the lowest price, regardless of whether the lowest price is coming that way. However, we have passed some of these regulations.

Given the cross-border nature of retail, I have a slight concern that were Ireland to go it alone in this regard, we would be making ourselves less competitive. Our European Union neighbours would not have the cost burden of complying with a code of conduct while Irish retailers would have the associated costs. EuroCommerce describes this dilemma as follows:

Trading relations are very complex [but] there are huge differences across [EU] Member States. This means how they are regulated needs to be different; the perceptions of what is fair and unfair may be different; and indeed the rules need to be related to these different trading patterns, perceptions and priorities.

This complex area and the effect of globalisation must be stressed in this debate. Ireland going it alone with a statutory code of conduct may not be the best idea at present. Consequently, I urge members to reconsider the question of whether to have a statutory code. When Australia introduced a voluntary code, the authorities there indicated that unless it was made to work, they would then introduce a statutory code. This probably is the way to go, namely, to have a big stick but to talk softly. One should set out a voluntary code and tell people to make it work as otherwise one may be obliged to do something else about it.