Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

Since the abolition of the Groceries Order in 2006, retailers are free to charge what they choose. Therefore, below-cost selling is no longer illegal and I do not have any powers to set minimum prices. The reason the change was made was that the order was seen to uphold high prices rather than promote competition or protect consumers.

Robust competition and cutting prices is not illegal. However, the practice to which the Senator referred, of predatory pricing, as it is known, where dominant players seek to use price cuts to eliminate another competitor, is entirely illegal and would be in breach of our competition law. This applies to a specific situation and requires us to establish dominance and the fact that it is predatory. Much of what happens in the market is that opportunistic pricing strategies are pursued for a short period on a certain product. This is not illegal and it would be difficult to see that it is damaging to consumers' interests. Therefore, it is only if it becomes an anti-competitive instrument that there would be a question of assuming powers to deal with it.

There is a wider issue on which I am introducing legislation and this concerns fairness in the supply chain for the retail sector. At times, suppliers feel they are in a weak position and that unfair conditions are applied or contracts are changed without notice. I propose to use statutory powers to introduce regulations that will define what practices must be pursued. The merged competition and consumer authority will be the enforcement agency in that regard. Inevitably, one must prove that such breaches occurred and regulations still require the onus of proof. Over the years, there has not been much evidence offered in this area and there have not been complaints of the practice of which the Senator complained, predatory pricing, brought to the Competition Authority.

We propose to introduce fair rules in this area. An attempt was made to introduce a voluntary code of practice, but it did not gain much support. Under the programme for Government, we are bringing in statutory regulations and they will be enforceable. This will come before the House shortly as we are finalising the drafting of the Bill. Hopefully, it will be approved by the Government and brought to the House in the near future. The issue covered in the Bill is slightly different to that of selling below cost. In the case the Senator highlighted that occurred over the Christmas period, there was a dispute as to whether the retailers were absorbing all the costs themselves or putting a squeeze on their suppliers. Putting the squeeze on suppliers is the area that will be regulated, but retailers can still choose to sell at whatever price they like, once they are not engaging in either predatory pricing as a dominant player, which would be illegal, or breaching the regulations we will introduce in due course.