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

There are two main issues in these amendments. Irish and EU law recognise simple retention of title clauses of the kind set out in the amendment and the courts have upheld such clauses. However, to take up Senator Quinn's point, it is one thing for the law to uphold certain forms of retention of title clause freely agreed by contracting parties, but another for it to insert a mandatory title retention clause into commercial contracts. To the best of my knowledge, no other jurisdiction has introduced a legislative provision of this kind.

While the aim on the Bill's provisions on grocery goods is to achieve a proper balance in the commercial relations between suppliers and retailers, it should not be done by introducing a potential imbalance into the relationship between suppliers, retailers and other parties. The proposed amendment would affect the interests of third parties, including the Revenue Commissioners, employees and unpaid service providers - who have no equivalent option of taking back services that they have provided - by reducing the pool of assets available for distribution to other creditors of an insolvent buyer and effectively permitting an unpaid seller to jump the queue of creditors. The potential for retention of title clauses to lead to inequity between creditors has led to a number of jurisdictions, including the US, Australia and New Zealand, to treat such clauses as a form of security interest against third parties that must be registered by the seller.

Although the Law Reform Commission proposed a similar system of registration and other conditions relating to the retention of title clauses, the recommendations were not implemented. In its comprehensive report of 2011 on the legislation governing the sale of goods, the sales law review group also concluded that because of their impact on third parties who had had no say in the contract, any reform of the retention of title clauses had to be considered in the context of a broader reform of the law relating to personal property security interests. Although I have some sympathy with the aim behind the amendment, I cannot accept it.

I will now refer to the part which calls for powers for the Minister for Jobs, Enterprise and Innovation to issue directions to retailers not to sell grocery goods at a price that is less than the net invoice price of the goods. As the Senators are well aware, the Restrictive Practices (Groceries) Order 1987 prohibited below invoice price selling of certain goods rather than banning below cost selling of those goods. In effect, the order allowed wholesalers and suppliers to determine minimum retail prices being charged to consumers, thereby seriously constraining competition in the grocery trade. Since the repeal of that order in 2006, no statutory basis exists for the Minister for Jobs, Enterprise and Innovation to make a minimum pricing order in any sector. The use of aggressive pricing strategies in any business is a legitimate marketing tool and is the normal outcome of the competitive process.

Low-cost and below-cost selling by a retailer is not of itself an offence unless it involves abuse of a dominant position. A determination on whether a retailer is abusing a dominant position in the marketplace would necessitate a comprehensive investigation by the Competition Authority. The Competition Authority is the independent statutory body responsible for enforcing competition law in the State and complaints of any alleged anti-competitive practice should be referred to it. As stated clearly in earlier debates, it is not believed that there are grounds for the re-introduction of such a restrictive measure. It would effectively reintroduce retail price maintenance, which flies in the face of the free market and would be a retrograde step. Thus, I am not in a position to accept the proposed amendment.

Price fixing by writing an invoice price would be resale price maintenance, which used to be one of the offences of competition law. For the State to introduce it and police it as an obligation would be very strange. The amendment is not right. We are trying to ensure the contract terms are fair in how they are assembled and we have taken powers to examine different elements of the contract terms that could be cast in an unfair way or not provided, and allow very arbitrary changes by the more powerful player in the relationship. This would be an anti-competitive measure and I do not support it.