Feargal Quinn (Independent) | Oireachtas source

I welcome the Minister to the House and the opportunity to discuss this Bill. The provision it contains for the rationalisation of two quangos which seem to be doing more or less the same job is particularly welcome. However, I have serious reservations that the Bill leaves the door open for the Minister to impose a huge number of potential legal regulations on the grocery sector, something that is unnecessary and overboard. In fact, one of the Government's objectives should be to facilitate small businesses. I acknowledge that the Minister is at one with me on this issue. The reality, however, is that the more regulations we impose on small enterprises, the more difficult we make it for them.

Will the Minister indicate how many people are employed by the National Consumer Agency? The Competition Authority's annual report tells us that it has 49 staff members, but there seems to be no corresponding information available in respect of the National Consumer Agency. The merger of the two bodies will, we are told, result in savings of some €170,000 per year. It is a worthwhile initiative given that the two bodies are, as I said, essentially doing the same thing.

If this Government is serious about helping retailers, one of the issues it must tackle is that of upward-only rent reviews. The Minister knows this is an issue I am very passionate about and I have talked about it at length. The Bill I introduced has been passed by this House and will go to the Dáil. I ask that the Whip not be applied to Government Deputies so that the Bill can proceed and, in due course and assuming it is signed by the President, have its constitutionality tested by the Supreme Court.

I am concerned about the impact of potential regulations affecting the grocery sector. We are trying to establish fairer relationships among all parties to the trade, but I do not hear enough about the interests of consumers. We are all aware of the concerns of retailers, suppliers and farmers, but there has much less discussion about consumers. The reality, however, is that every additional regulation applied to the retail sector has an impact on consumers. The Minister tells us he is seeking to achieve reform by introducing a series of regulations with associated sanctions rather than a code of conduct. There will be new obligations in terms of record-keeping and the mandatory inclusion of certain terms in written contracts. However, the provision in section 63B of the Consumer Protection Act 2007, as inserted by section 83 of the Bill, essentially gives the Minister - maybe not this Minister but certainly a future Minister - power to introduce a multitude of requirements in the sector at some later date. It is a very vague provision and, as such, gives cause for concern.

I have stated on previous occasions my opposition to the introduction of a statutory code of conduct for the grocery sector. It is not the intelligent way to go. Those pushing for more regulations have made clear their vested interests, including independent traders and companies with branded products which wish to prevent an expansion of private labelling. However, as I have said, the provisions set out in this legislation leave it wide open for a future Minister to impose more regulations on the grocery sector.

The subsection states that future regulations may specify the circumstances in which a relevant grocery goods undertaking that is a retailer or wholesaler may, or may not, seek payment from a supplier to retain shelf space or to secure better positioning on shelves, or an increase in the allocation of shelf space, for the grocery goods of the supplier. That is not good.
The grocery sector does not have elastic shelves. If there are three products on the shelf and someone demands that one puts a fourth one on, one has to negotiate to get the best deal. That is in the interests of the consumer. The Bill continues provides that regulations may "prohibit a relevant grocery goods undertaking from directly or indirectly compelling a grocery goods undertaking to make any payment or grant any allowance" in terms of promotion or advertising. That does not make sense. The marketplace is what determines the satisfaction of the customers. It seems like overkill, as the Competition Act 2002 prohibits or prevents the “compelling or coercing [of] payment or allowances for advertising or display of goods”. Why do we need even more regulations? Why will the grocery business now potentially be obliged to train staff just to comply with the regulations? This Government should aim to reduce regulations. I have spoken to the Minister before about the situation in Britain where if a new regulation is introduced, two old ones have to be removed. That was a brilliant move. There has been criticism of it but it seems absurd to me that we continue to introduce new regulations without doing that.
In my experience the grocery sector is hugely competitive, and grows more and more so every year. Consumers have been much more price conscious in recent years. There is no need for any worry in that area. The Minister is well aware that the Competition Authority has stated that the retail sector is highly competitive. I know from my own experience that it is so competitive one cannot stand still for a minute. One has to make sure that customers come to one’s shop rather than go to the shop down the road. To achieve that one has to coax them in, be it with price, service or quality, or a mixture of those. Those outside retail forget how much it has developed. It is extremely competitive.
For example, retailers armed with accurate price information, right up to date on their smart phones have the ability to renegotiate with suppliers for better prices and pass savings on to the consumer. They can even see in real time how certain marketing campaigns, including those of their competitors, have an effect on their sales. There is so much going on in that area that it is possible to achieve a great deal more than we are setting out to achieve.
We should consider alternatives to the regulations as set out in the Bill. We should consider voluntary regulation of the grocery sector instead of more legal requirements. There are some very good examples from elsewhere in Europe. France has a self-regulatory initiative called Commission d’examen des pratiques commercialesand in Belgium there is a voluntary code which has been very successful. It promotes dialogue between all links in the supply chain, from farmers to consumers. Why are we not considering some of the successful examples set by our EU neighbours? Many of them have found that a voluntary code linked to existing national legislation is the best solution. We are overlooking that here. We need something that would lead to a culture change, to improve the business culture. A voluntary code would be very useful in order to achieve this, a statutory code of conduct would not have the same effect.
We need a carrot not a stick. Instead of legal instruments are there other ways to encourage a more transparent and fair supply chain? Last year, Findus, the frozen food brand was tainted by the horsemeat scandal. It was reported that some of its products were found to contain between 60% and 100% of horsemeat. This was supposedly caused by a third party supplier. In the wake of this, and to try to address shortcomings in the supply chain, it signed up to supplier ethical data exchange, Sedex, which is a not-for-profit organisation which allows suppliers share trading data with retailers and brands online. It conducts health and safety audits throughout the supply chain and aims to create much more trust in the retail industry. This is an interesting example of what could be done. Has the Minister heard of it?
We are well aware of the National Consumer Agency’s advertising, which more or less boils down to getting the consumer to shop around. I do not know that it makes sense for our taxpayers’ money to be used to send that message to citizens. It is not necessary. People know what they have to do. I am not blaming them for trying to do it. The same applies to other quangos, once they have the money they appear to use it on that basis.
This Government plans to reduce the number of quangos by 45 at the same time as it has created 33 new ones. The objective was there but it seems to take a long time to achieve these things. We support the general tenor of what the Minister is trying to achieve in this Bill but I have some difficulty with the gaps in it. It will be very tempting for some future Minister to introduce even more regulations and make businesses, particularly small ones, much less competitive.