Jim O'Keeffe (Cork South West, Fine Gael)
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Question 25: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the practices from which retailers are prohibited from engaging in under the Competition Acts in their dealings with suppliers; the number of such prohibited practices which have come to light in each of the past three years; and the response of the Competition Authority thereto. [14660/09]

Mary Coughlan (Donegal South West, Fianna Fail)
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Retailers, like all other undertakings, are subject to the provisions of sections 4 and 5 of the Competition Act 2002. They are therefore prohibited from engaging in a variety anti-competitive practices such as price-fixing, market sharing abusing dominance etc.

In addition, the Competition (Amendment) Act 2006 inserts a new Part 2A immediately after section 15 of the 2002 Act. The Part deals specifically with competition in the grocery goods trade and prohibits certain practices by grocery goods undertakings (defined as an undertaking that is engaged for gain in the production, supply or distribution of grocery goods). Breaches of the prohibitions are civil only.

Section 15B(1) prohibits a grocery goods undertaking, directly or indirectly, attempting to compel or coerce another grocery goods undertaking, whether by threat, promise or any like means, to resell or advertise for resale any grocery goods at

· a price fixed directly or indirectly by the first mentioned grocery goods undertaking, or

· a price above a minimum price fixed directly or indirectly by the first mentioned grocery goods undertaking.

This prohibits, not retail price maintenance itself (which is already prohibited by section 4 of the 2002 Act, and which is a criminal offence) but any attempt to force retail price maintenance.

Section 15B(2) prohibits a grocery goods undertaking from applying dissimilar conditions to equivalent transactions with any other grocery goods undertaking. This is meant to catch unilateral behaviour by a non-dominant undertaking. If the undertaking was dominant, the behaviour would be caught by section 5 of the 2002 Act. A typical case might be a large supplier who gives better discounts or rebates to a supermarket than to a smaller store. However, it should be noted that the provision prohibits discrimination where the transactions are equivalent: it does not, for example, prohibit a supplier from providing volume discounts to retailers based on the size of purchases, or from providing better terms to those who pay cash rather than on credit or wait to pay per the terms of an invoice period.

Section 15B(3) prohibits a grocery goods undertaking from directly or indirectly compelling or coercing, whether by threat, promise or any like means, another grocery goods undertaking to make any payment or grant any allowance for the advertising or display of grocery goods. This is intended to prevent large supermarkets refusing to specially advertise or display new products unless they are paid to do so.

Section 15B(4) prohibits a retailer from directly or indirectly compelling or coercing, whether by threat, promise or any like means, another grocery goods undertaking to make any payment or grant any allowance to the retailer in consideration of any of the following matters:

· providing space for grocery goods within a new retail outlet on or within the first 60 days after its opening to the public;

· providing space for grocery goods within a newly expanded or extended retail outlet on or within the first 60 days after the opening to the public of the expanded or extended part of the outlet;

· providing space for grocery goods within a retail outlet on or within the first 60 days after its opening to the public under new ownership.

All the prohibitions of section 15B are subject to subsection (5) of the section. This provides that the conduct described in the section will not be prohibited unless it has the object or effect of preventing, restricting or distorting competition. The reason for this proviso is that some of the behaviour referred to is capable of having a pro-competitive effect in certain cases.

The Competition Authority is the statutory independent agency responsible for the enforcement of competition law in Ireland. The Competition Authority's role in relation to alleged breaches of the legislation is to investigate those alleged breaches. The Competition Authority investigates alleged breaches of the legislation either on its own initiative or on receipt of complaints from the public. If, having conducted an investigation, the Competition Authority believes that there is evidence that a breach of the legislation has occurred, it brings the matter to the Courts, either directly itself or through the Director of Public Prosecutions, depending on the nature of the alleged breach.

It is the Courts alone that decide whether a breach of the Acts has occurred or not. There is also a right of private action to the Courts for any person aggrieved in consequence of a breach of the Competition Acts. I am not aware of any decisions by the Courts in the last three years relating to breaches of the Acts in the grocery goods trade.