Seanad debates
Wednesday, 14 December 2005
Competition (Amendment) Bill 2005: Committee and Remaining Stages.
12:00 pm
Rory Kiely (Fianna Fail)
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I welcome the Minister for Enterprise, Trade and Employment to the House to debate the Competition (Amendment) Bill 2005.
Rory Kiely (Fianna Fail)
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Amendments Nos. 1 and 2 are related and may be discussed together by agreement.
Paul Coghlan (Fine Gael)
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I move amendment No. 1:
In page 3, to delete lines 25 to 27 and substitute the following:
""grocery goods" means any household necessaries or food or drink for human consumption that is intended to be sold as groceries, and includes—".
The purpose of this amendment is to extend the scope of the proposed Act to the range of goods previously covered by the groceries order and to embrace all grocery goods sold in all grocery goods retailers. Amendment No. 2 aims to give effect to amendment No. 1 and to remove any uncertainty about the definition of "household necessaries" following the recent High Court decision of Mr. Justice Geoghegan in the case involving Dunnes Stores.
Terry Leyden (Fianna Fail)
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While I welcome Senator Coghlan's input, in reality these amendments will only complicate the Bill further and will not enhance it in any way.
Micheál Martin (Cork South Central, Fianna Fail)
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I understand what Senator Coghlan is trying to do with these amendments. He proposes to widen the scope of products covered by the Bill to include household necessaries, which were included in the groceries order. That issue was discussed at some length in the course of preparing this Bill. Household necessaries are excluded because the definition contained in the groceries order was proving extremely problematic.
The recent High Court decision on disposable nappies gave rise to much debate and only added to the uncertainty regarding the products that were included in the definition of household necessaries. That difficulty would only be likely to increase with these amendments as the range of products available and sold in grocery stores increases. For example, some grocery stores now sell televisions, clothes, hardware and so on. Furthermore, the nature of grocery stores is also changing on an ongoing basis. Many large grocery stores are now departments of much larger department stores. Sometimes products sold in the grocery department are also sold in the home wares department of such stores.
I am concerned that the inclusion of household necessaries could create significant difficulties in interpretation and enforcement and might extend the provisions of the Bill beyond the traditional grocery trade. For example, would household necessaries be covered when sold in outlets other than grocery stores? There are also implications for the term "grocery retailer" as used in amendment No. 2.
A key requirement of the Bill is ensuring compliance and guaranteeing enforcement. In that context, no interests would be served by creating doubt and perhaps giving rise to court debates in the future as to which products are covered by the Bill. There is merit in confining the definition to food and drink. Food and drink make up the bulk of products sold in conventional grocery stores. It is estimated that 60% to 65% of products sold, even in the biggest supermarkets, is made up of food and drink. This can increase to as much as 75% when individual products are weighted by volume. Some grocery stores stock between 30,000 and 40,000 products but earn the bulk of their income from approximately 100 product lines, mostly of which are food and drink.
It is important to point out, in the context of this Bill, that we have increased the coverage of food and drink beyond that provided for in the groceries order by extending the provisions to cover fresh produce. Senators will recall that fresh produce was excluded under the groceries order, but is included in this legislation. Fresh produce was excluded from the order because of the ban on selling below invoice price. As many fresh goods were perishable, the logic was that retailers should be allowed to sell them for whatever price they could obtain before they became unsaleable. However, as there is no ban on selling below cost in this Bill, there is no longer any logic in excluding fresh produce.
I understand what Senator Coghlan is trying to achieve but the complexity of the issue and the difficulties with enforcement and definition mean that I am not in a position to accept his amendments.
Paul Coghlan (Fine Gael)
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No, I will try to have faith in the Minister's words on this occasion.
Paul Coghlan (Fine Gael)
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I move amendment No. 3:
In page 5, line 5, after "the" to insert "provision of space or".
The purpose of this amendment is to ensure, beyond doubt, that the demanding of what is termed "hello money" is not just illegal when carried out in conjunction with a new store opening, as provided for in section 15B(4).
Micheál Martin (Cork South Central, Fianna Fail)
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I am not clear on the intention of this amendment. Section 15B(3) is designed to deal with allowances for advertising or display of grocery goods. Displaying and advertising a product would necessitate the provision of space for that product. Therefore, it is not necessary to insert the additional phrase. There is also an overlap here with the provisions for the prohibition of "hello money", as set out in subsections (4)(a), (4)(b) and (4)(c), which refer to "providing space for grocery goods". The language of subsection (4) does not limit the generality of subsection (3). The Senator's objective is catered for in the Bill.
Paul Coghlan (Fine Gael)
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I move amendment No. 4:
In page 5, between lines 27 and 28, to insert the following:
"(5) Subject to subsection (6) a retailer, as defined in this Part, shall not
(a) engage in predatory pricing for the purpose and intent of eliminating or reducing competition in the provision of trade in any grocery good in the State or any part of the State;
(b) directly or indirectly impose unfair selling prices; or
(c) impose any quota in respect of goods offered for sale at any retail outlet owned or operated by that retailer.
For the purposes of this subsection, "predatory pricing" or "unfair selling prices" constitutes the sale by a grocery good undertaking at a retail price and in a manner that is likely to have the effect of eliminating or reducing competition from a particular competitor in the State or any part of the State, but does not include grocery goods that have been offered for sale in good faith for a substantial period of time.".
This amendment is intended to introduce an express prohibition on predatory pricing when carried out as a unilateral action by a non-dominant undertaking. The provision borrows on an equivalent measure in the Canadian competition legislation and also prohibits the imposition of unfair prices or quotas on price promotions. It is one of our most serious concerns and, while we accept the Minister's intention, we do not want any blatantly anti-competitive practices and without dealing with predatory pricing we will not succeed.
Terry Leyden (Fianna Fail)
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I appreciate Senator Coghlan's concern about this issue which was one of the biggest concerns of the Joint Committee on Enterprise and Small Business. However, I am satisfied with the Minister's speech yesterday where he clearly defined predatory pricing as below-cost selling on a persistent basis by a dominant firm for the purposes and intent of getting rid of or damaging competitors. Predatory pricing is wrong, it is illegal and is punishable under the Competition Act 2002 by fines of up to €4 million or 10% of turnover, and imprisonment of up to five years. The Minister has a good appreciation of the issue.
The country has moved on and most big towns are now served by the multinationals. The Minister has allowed for that development. When the legislation was enacted in the 1970s no town in the west had a multinational presence. If they came in then they would have wiped out most of the competition by now. Now, however, Irish-based companies compete with them effectively. From experience of my home town, existing Super Valu and Spar shops compete ably with Tesco and Dunnes Stores. Loyalty is a factor and people have a choice, though some smaller rural stores are experiencing difficulties, which they can tackle by providing local post office services not provided in Tesco or Dunnes Stores.
The Minister is strengthening the agencies and giving them a mandate to carry out their task. They will be aggressive in that task and the Minister will drive them to that end. After concerns we had in our committee I am satisfied with the arguments the Minister has put forward and happy that the amendment is not necessary.
Micheál Martin (Cork South Central, Fianna Fail)
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I dealt with this at some length on Second Stage yesterday. Following the Competition Act 2002, the law on predatory pricing is much broader and stronger than the words in the text. The Act is designed to be analogous to Articles 81 and 82 of the European Union treaty. European case law supports the analogous provisions to prohibit and punish instances of predatory pricing. I do not want to accept an amendment that dilutes the strength of existing case law. I accept to do so is not Senator Coghlan's wish but my strongest legal advice warns of diluting European case law and the Competition Act 2002.
I accept that decisions on the application and interpretation of the Act will rest with the courts but in applying the Act the Competition Authority and the courts may have regard not only to its interpretation by Irish courts but also by the EU Commission, the Court of First Instance and the European Court of Justice, as well as precedent in other jurisdictions with similar competition law provisions.
What is predatory pricing from the point of view of case law? It is the abuse by a company of a dominant position and involves the sale of a product at a price that is less than cost price. Case law even defines what cost price means in these circumstances. We know that concern arose from yesterday's debate as to the definition and measure of dominance in the context of an offence under the legislation. It was a theme of many submissions during the consultation process leading up to the report on the groceries order.
Predatory pricing by a non-dominant firm is a contradiction in terms. Any attempt to define predatory pricing in the manner set down in this amendment will enshrine that contradiction in legislation and in so doing will seriously undermine the Competition Act 2002. Furthermore, the amendment would remove the concept of predatory pricing from the domain of existing case law and would introduce inconsistencies with European competition rules and in the Act itself.
There was much debate in the House yesterday on the concept of dominance and market share. Senator Coghlan referred to my Department's report yesterday and inferred that no grocery retailer would ever be considered dominant in the Irish market. We consider that represents a misreading of the report. On page 97 the report states that on case studies we have examined it is unlikely a firm would be considered to be dominant in a market if it held less than 35% market share. On that basis no grocery retailer would be considered dominant in the national Irish market. The report goes on to show how dominance can be measured not just nationally but in any part of the State. The report clearly states "even a small retailer might be considered dominant in a small rural town if the structure of the market is such that consumers are unlikely to travel beyond its boundaries to buy groceries".
Dominance can also be held jointly by more than one firm operating in a market — companies do not have to act in concert for such a determination to be arrived at. The concept of dominance is necessarily entirely flexible. There are many legal precedents I will not go into on how to consider an undertaking dominant. The European Court of Justice stated an undertaking must possess a position of economic strength which enables it to prevent effective competition being maintained in the relevant market by affording it the power to act to an appreciable extent independently of its competitors, customers and ultimately of its consumers. One must take into account the degree to which the undertaking has market power and if, when and to what extent it encounters constraints on its ability to behave independently by reference to the market.
Paul Coghlan (Fine Gael)
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I am glad the Minister is as opposed as we are to predatory pricing. I would hate to do anything that would dilute existing law or the power to act but I believed an express prohibition was necessary. I understood, perhaps wrongly, that the Minister was anxious for an express prohibition, which is why we tabled this amendment. We desire a level playing pitch.
As I understand it the Minister defines dominant share as 35%.
Micheál Martin (Cork South Central, Fianna Fail)
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No. I was referring to the issue the Senator raised in the context of the report.
Paul Coghlan (Fine Gael)
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There are very powerful players in the market with 20% to 27% market share and it is accepted that any one of them could, if it so wished, exercise such dominance as to create an uneven playing pitch. They would create an uneven playing pitch if they decided to sell bread or milk, for example, at half price in any particular place. Senator Leyden was worried about smaller stores, perhaps in rural Ireland, but with regard to any area, whether city suburb or provincial town or village in Ireland, he would concede my point. If multiples were to take that action, we can all see that small Centra or Spar shops, or petrol forecourt shops, for example, would not be able to sustain that kind of walloping over a period. If that happened and those people were wiped out, or there were fewer of them, we would have less choice. Nobody wants to see fewer shops than now exist throughout the country, because if there is less choice there will be less competition down the road. The major players will be so dominant that they can further strengthen their hand.
I am afraid of this Bill because it favours only the giants, so to speak. I would like to think I am misreading it and getting it wrong. I would like to think the Minister is right, if he cannot accept my argument, but I thought he would feel in his heart and head that we should have an express prohibition on predatory pricing.
Terry Leyden (Fianna Fail)
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I would like to help Senator Coghlan. I presume he has already declared his interests in this situation. I merely offer advice as a colleague.
Rory Kiely (Fianna Fail)
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The Senator declared his interest yesterday.
Paul Coghlan (Fine Gael)
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Yes, or the Cathaoirleach declared it for me, and I said he was too kind. It is on the record. Senator Leyden is referring to my nominating body.
Rory Kiely (Fianna Fail)
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Senator Coghlan has declared his interest.
Paul Coghlan (Fine Gael)
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I should also declare an interest in one of the major players, by way of being a landlord to one of its shops. It does not matter to me. I am quite independent-minded about all of these matters.
Mary O'Rourke (Fianna Fail)
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At any rate the Senator has to pay the rent.
Terry Leyden (Fianna Fail)
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It is only fair that as a colleague it is brought to the attention of the commission that Senator Coghlan is nominated by RGDATA.
Paul Coghlan (Fine Gael)
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That is correct. I am nominated by the industry and commerce panel.
Terry Leyden (Fianna Fail)
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He is a previous nominee too, and is also a landlord of Tesco. That is important.
Mary WhiteTerry Leyden (Fianna Fail)
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There is no contradiction there. Senator Coghlan is very fair and balanced on the entire matter.
Paul Coghlan (Fine Gael)
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I am glad to hear that. Both shoulders are very well balanced.
Terry Leyden (Fianna Fail)
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Returning to the amendment, with regard to the question of dominance in the market, legal precedent established by the European Court of Justice requires that to be considered dominant, an undertaking must possess an economic strength which enables it to prevent effective competition being maintained on the relevant market by affording it the power to behave to an appreciable extent independently of its competitors, customers and ultimately of its consumers.
Nobody is in that position in this market. The report was excellent and well researched. Over 500 submissions were made. It is interesting that out of 166 Deputies in the Dáil, two made submissions.
Terry Leyden (Fianna Fail)
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Their names are in the report. In fairness, they give a balanced spread.
The Minister has been very careful in bringing forward this Bill. From today until the Bill comes before the other House, the Minister will have an opportunity of copperfastening the situation. I have no doubt that if the Minister felt there was a need for this amendment to be inserted in the Bill, he would insert it. The amendments considered are worthwhile. Senator Coghlan has done the State a service by tabling them because they provide the Minister and his senior officials with an opportunity to reflect on the situation.
If, on reflection, the Minister felt there was some mechanism by which he could reintroduce any part of the existing proposals, that would be welcome, instead of having to bring forward legislation. I merely make the suggestion that if some aspect of the existing powers held by the Minister could be reactivated when this Bill is passed, that might be worthwhile. It would save time. The situation will probably not arise, but I simply make the suggestion.
Micheál Martin (Cork South Central, Fianna Fail)
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I thank Senators Leyden and Coghlan. I have been very consistent since the public announcement of the abolition of the groceries order and at no stage did I say I would be introducing legislation on predatory pricing. Almost from the date of that announcement we have been saying that there is already express prohibition in existing case law with regard to predatory pricing.
Senator Coghlan and I share the same objective. There is no argument over the fact that we do not want predatory pricing to have free rein. The legislation and case law in place is designed to prevent predatory pricing if and when it should ever occur. However, we are not in the business of protecting people from competition. That is a different issue and to a large extent the groceries order protected against competition and, in our view, kept prices artificially high because it created a price floor below which goods could not legally be sold. It allowed the development of off-invoice discounts. There was no transparency in how they operated. No one knew who was leveraging muscle. No one knew who was going to a supplier and demanding a bigger discount for putting the supplier's goods on the shelves.
Much is said about the groceries order but much is unsaid too. It did not protect as many small operators as people would like to believe. As the report demonstrated, 2,500 shops closed since the introduction of the groceries order in 1987. I accept that some went into the symbol groups and so on. That is a new and welcome trend in the grocery business and has introduced choice. However, nobody would argue with me that the growth of the convenience store is about price competition. By and large, it is about factors other than price. The garage forecourt shops have been the fastest growing phenomenon. We all go to such shops, knowing we are paying above the odds, paying more than if we went somewhere else. One is paying for convenience. One wants to walk around the corner to get a pint of milk, for example, rather than drive to some conglomerate and queue.
An operator, big or small, should not be protected from competition but should be protected from predatory pricing. We are making the point that European case law and the Competition Act 2002 prevent predatory pricing, which is an abuse in itself. I have taken legal advice and we are satisfied with that situation. I am assured that if we were to accept the amendment, the protection would be diluted because it would be taken out of the context of Irish case law, which would give rise to other uncertainties and interpretations.
I accept that dominance is a complex issue. It might be useful for the Seanad to go through what legal jurisprudence suggests, that a number of factors need to be considered in determining whether or not a firm is dominant. That was a key issue of Senator Coghlan's contribution yesterday.
I will mention some of the many factors just to give people an illustration of the complexity involved, and the fact that there are no simple black and white solutions to these issues. They include but are not limited to the following: relevant market shares; the level of concentration in the industry; the ability of the allegedly dominant firm to act independently of its competitors; absence of or lower countervailing buyer power; absence of potential competition; economies of scale or scope; overall size of the undertaking; product or service diversification; easier privileged access to capital markets or financial resources; control of infrastructure that is not easily duplicated; technological advantages; a highly-developed distribution and sales network; product differentiation; vertical integration; barriers to entry; and barriers to expansion.
That is a fairly broad range of criteria. Different episodes can arise in different contexts. For example, the Drogheda newspapers case was alluded to in the House yesterday, but it would be wrong to extrapolate from that case generalities about how the law is applied in any example of predatory pricing. We need to be careful that when the Competition Authority goes to adjudicate on various allegations or assertions, it uses a wide range of criteria. The courts will also use a wide range of criteria before determining whether someone is engaged in either abuse of a dominant position or in predatory pricing. We need to be aware of the complexities of the issues. It would be wrong if we did not take due cognisance of existing case law on the subject and the European Union legal context within which we operate. We are satisfied from the legal advice received that what is now in place is far stronger than that which the amendment would achieve.
Paul Coghlan (Fine Gael)
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I hope the Minister is right and that it is far stronger because we are not talking about the groceries order — that is out of the equation. As the Minister said, we share the same objective in that no one wants to see predatory pricing in operation or being, in any way, legal. That is the fear and obviously legal advisers differ on it. That is why I tabled this amendment. The Minister firmly believes the case law which exists and the European Union legal position is stronger than that which is in the amendment. That is not the advice I have received but we will have to differ on it.
Paul Coghlan (Fine Gael)
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I move amendment No. 5:
In page 5, line 29, to delete "has" and substitute "is likely to have".
This amendment seeks to ensure consistency in the application of the Competition Act so that all transgressions of the Act can be regarded as capable of civil or criminal prosecution as the case may be.
Micheál Martin (Cork South Central, Fianna Fail)
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We dealt with this issue on Second Stage. The language used in section 15B(5), as drafted, is consistent with and replicates language used in section 4 of the Competition Act 2000. If this was amended, as suggested by the Senator, in respect of the new provisions, it would introduce inconsistency into the Competition Act. It is considered that it would also, at a minimum, introduce confusion and legal uncertainty as to why the conduct specified in this Bill should be subject to a different test than the type of practices covered by section 4 of the Competition Act.
Furthermore, section 4 of the Competition Act is modelled on Article 81 of the European Union treaty. In fact, the wording in the current draft of the Bill also mirrors the text of Article 81. The amendment would, therefore, also be inconsistent with the competition rules as set out in the European Union treaty. I am not in a position to accept the amendment.
Rory Kiely (Fianna Fail)
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The word "affect" in amendment No. 6 is misspelled, so it will be corrected. Amendments Nos. 6 and 8 are related and may be discussed together by agreement.
Paul Coghlan (Fine Gael)
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With my macular oedema, I had not spotted the misspelling.
Paul Coghlan (Fine Gael)
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We will not quibble about it.
I move amendment No. 6:
In page 5, between lines 32 and 33, to insert the following:
"(6) An undertaking that engages in an activity that is prohibited by this section shall be guilty of an offence in the same manner and with the same effect as if the undertaking had committed an offence under section 4 or section 5 of the Competition Act 2002.".
This amendment seeks to recognise that in most instances, an application by a party, including the authority, to ensure compliance with the provisions of section 15B will be made at an interlocutory stage pending a full trial of an action. It is designed to facilitate the granting of the necessary release pending a full trial of an action.
Does the Minister wish to deal with amendments Nos. 6 and 8 separately?
Rory Kiely (Fianna Fail)
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No. We have agreed to discuss them together.
Paul Coghlan (Fine Gael)
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Amendment No. 8 seeks to allow small businesses access to the District Court to seek any orders necessary to restrain any breaches of section 15B which should be a more cost-effective and accessible means of securing relief for many small and medium enterprises.
Micheál Martin (Cork South Central, Fianna Fail)
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I think the Senator dealt with amendment No. 7 and not amendment No. 8. Amendment No. 8 reads: "Section 6(1) of the Competition Act 2002 is amended by substituting 'prohibited under section 4(1), section 15B or Article 81 of the Treaty shall be guilty of an offence.'."
For clarification purposes, I will deal with amendments Nos. 6 and 8 which seek to criminalise the misdemeanours or the transgressions. We discussed this on Second Stage and I believe the Senator is trying to give effect to his view that we should not only have a civil remedy but that there should be criminal sanctions, which is what amendments Nos. 6 and 8 attempt to do.
Both those amendments are designed to criminalise the behaviour which is prohibited under the Bill. The prohibitions contained in the Bill are not per se offences. In other words, the conduct in question is not prohibited in all cases. We are only prohibiting "hello money", resale price maintenance and unfair trading practices in contexts where they would be anti-competitive. There are circumstances where some of them could be competitive and, therefore, it would be wrong to criminalise actions which the Bill implicitly acknowledges could have some application at some stage.
As I said on Second Stage, we are equally of the view that unilateral conduct on the part of single undertakings, such as that which is prohibited in this Bill, is considerably less serious and cannot amount to cartel activity. We have criminalised what we consider hard-core cartel activity of a very serious nature. The offences in this Bill are not of that gravity and should not be seen as such.
However, the civil remedy has the advantage of allowing aggrieved parties or the Competition Authority to proceed quickly to the courts to challenge any suspect conduct or practice. If someone believes a person down the road is misbehaving or breaking the law, he or she can go straight to the courts to seek a civil remedy. Given the proof, etc., required, it would take far longer to try to get a criminal conviction and perhaps it would be more difficult for people to pursue that route. We believe the civil prohibition marries well with the range of offences for which we are legislating. There is a distinction between serious cartel-type behaviour of undertakings and the offences we are prohibiting in this legislation. We believe the civil remedy approach is the more sensible one.
Paul Coghlan (Fine Gael)
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Would the Minister not regard it as preferable if a civil or criminal prosecution could be taken? One could have a choice ofweapons so to speak.
Micheál Martin (Cork South Central, Fianna Fail)
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We have definitively come to the view that it would be wrong to go down the criminal route in terms of the range of offences for which we are providing. We looked at this in advance and took advice from the Attorney General, the Parliamentary Counsel and so on and the policy view is that in terms of "hello money" transgressions, advertising transgressions or resale price maintenance, the civil process is better and reflects the gravity of those offences better than a criminal sanction. In fact, people have criticised the length of time it takes to prosecute serious cartel operations in the State to which significant criminal sanctions attach. It can take years to prove many of those cases. There an advantage here for the small operator, in particular, to get quicker redress by taking a civil action.
Paul Coghlan (Fine Gael)
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I move amendment No. 7:
In page 5, line 49, after "the" to insert "District Court or in the".
I have already outlined the reasoning behind this amendment, namely, to secure relief for small and medium-sized enterprises.
Micheál Martin (Cork South Central, Fianna Fail)
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I discussed this amendment before I came into the House and sought further legal advice. The Bill provides that the Circuit Court and the High Court are the appropriate courts through which people should seek redress. The threshold for damages in the District Court is very low so I cannot see the advantage of going to that court to seek damages or remedies in the event of someone breaking the law in respect of these offences.
Equally, the point must be made that we are dealing with grave matters some of which are legally complex. The added advantage of the High Court is that it has judges with special expertise assigned to deal with these cases which may not be available at District Court level. This is something we should take into account. For those reasons we have opted for the Circuit Court and the High Court, as opposed to the District Court.
Paul Coghlan (Fine Gael)
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I understand the Minister's rationale. I tabled the amendment purely from the point of view of accessibility and cost effectiveness for small businesses.
Micheál Martin (Cork South Central, Fianna Fail)
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I appreciate that.
Paul Coghlan (Fine Gael)
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I take on board his point about High Court judges with specific expertise in dealing with competition law matters and so on. I have no problem with the Minister's reasoning on this matter but I was motivated from the point of view of small businesses in provincial and rural Ireland who would more readily have access to the District Court.
There will be some time between us dealing with the Bill here and the Minister coming before the other House with it. Perhaps in that time he and his officials will consider these matters further. I am sure more detailed amendments will be tabled in the other House. I accept the Minister has given adequate attention to the legislation but I urge him to address all of these issues and the other ones that will arise.
Terry Leyden (Fianna Fail)
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The Minister has dealt with the amendment adequately. The new consumer agency will be put on a statutory footing next year.
Micheál Martin (Cork South Central, Fianna Fail)
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That is correct.
Terry Leyden (Fianna Fail)
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It will have a role in this regard. It will act for consumers and smaller businesses who have a problem. It will not necessarily be a case of a small grocery shop taking an action against the multinationals; it will be an agency of the Competition Authority or some other such organisation that will act on behalf of consumers.
I do not accept the concerns that have been expressed about the District Court. This is an important matter and the advice to the Minister is correct about this being the right way to go. What are the Minister's plans for the establishment of the agency and for the strengthening of the Competition Authority?
Micheál Martin (Cork South Central, Fianna Fail)
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I stand to be corrected but in the District Court there is an upper limit on damages of €7,000, which is a low threshold given the nature of complaints that could be made in this context. Of course I will reflect on the issues Senator Coghlan raised in the context of the amendments. The Bill will not come before the Dáil until February so there will be an opportunity for reflection. Some of the issues revolve around language, definitions and so on.
We intend to bring legislation to the Oireachtas next year to establish the national consumer agency on a statutory basis. Its prime focus will be on representing the consumer through advocacy, research and the provision of information in a much more robust way than has previously been the case. The Office of the Director of Consumer Affairs has existing powers and we have to work through some issues in that regard. The Bill will be substantial as we will also codify and consolidate all consumer law and transpose European consumer law.
I took steps in the recent Estimates to substantially increase funding for the Competition Authority, particularly its cartel unit. In effect, it is sufficient to create a new division within the Competition Authority to address cartels in the economy. I had discussions with the outgoing chairman of the Competition Authority who indicated that this area was absorbing a great deal of the energy of existing staff because of the long and arduous process involved in prosecuting these cases, some of which are taking years. I decided to seek a significant increase in funding for this area in response to the presentations made to me by the outgoing chairman. We succeeded in getting an increase in the Estimates which will enhance the capacity of the Competition Authority to go after cartels in the economy.
Terry Leyden (Fianna Fail)
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I thank the Cathaoirleach for his co-operation. I also thank the senior staff from my old Department. I thank the Minister for personally taking the Bill although he has an extremely busy schedule. I know the pressures he is under from the Industrial Development Agency, Enterprise Ireland and all the different responsibilities he has in the Department. Nevertheless, he considered it important to come here yesterday when he spent nearly three hours and whatever time was necessary today on Committee Stage. He has achieved a tremendous grasp of the issue in a short time. I accept he is being briefed by his top officials who are very familiar with these matters. It is a complex issue and the Minister has dealt with it in a straightforward way people can understand.
People should bear in mind that the Minister has responsibility for the areas of enterprise, trade and employment. In bringing forward the Bill, he is endeavouring to maintain employment and create opportunities. Some 130 items were incorporated under the groceries order. The Minister must keep a close eye on how the situation develops. I believe his judgment will be proven to be correct at the end of the day. He has not given any commitment that the legislation will result in a decrease in the cost of groceries to consumers but it may be the case. That is his objective. The amount may be surprising but we will not fix a level because, as the Minister said, people judge one on commitments made.
It is the Minister's objective that more competition will be introduced in this area. I commend the Minister and thank the Cathaoirleach for his co-operation in getting the Bill through the House.
Paul Coghlan (Fine Gael)
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I thank the Minister and his officials for their courtesy even if we will have to agree to disagree. Unfortunately, we see this Bill as weakening a number of key protections for consumers and relaxing certain regulations dealing with the relationship between suppliers and the major multiples without any obvious benefit to the consumer. An overriding principle of my party is that we should protect all sectors equally from predatory pricing and thereby ensure a level playing pitch. I accept the Minister is equally opposed to predatory pricing but, unfortunately, we differ on how this should be implemented. I considered the protections should be explicitly stated in the Bill but, on advice, the Minister has taken a different view. However, I accept the Minister's assurances that he will reflect further on these matters before the Bill comes before the Dáil. I do not doubt that issues will continue to arise.
Micheál Martin (Cork South Central, Fianna Fail)
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I thank Senators for their contributions to the debate on this Bill. Yesterday's Second Stage debate was wide ranging in the classic Seanad manner. There was even an exotic intervention with regard to concerns on the demise of bakers in rural France, a matter which we may investigate some day.
This legislation is about bringing greater competition to the domestic economy which, according to analyses of the challenges facing Ireland in the future, is far less productive than the foreign direct investment sector. In that broader context and if we are to remain competitive, it is imperative that we introduce greater competition to domestic markets. Productivity will be the key to that competitiveness.
The specific provisions made in the legislation will be of benefit to consumers. Above all others, the statistic that reveals the degree to which food prices have increased in Ireland stands out of the report. Over the past few years, prices have become three times higher than is the case in Britain and twice the European Union average. It is my contention that the groceries order kept prices artificially high and, if it was allowed to remain on the Statute Book, would continue to do so. That is why we are bringing forward this legislation to remove the order, while also providing protections in terms of prohibiting behaviour that will be unacceptable to all concerned if allowed to continue in an unfettered manner.