Jim O'Keeffe (Cork South West, Fine Gael)
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Question 112: To ask the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to the allegations of discriminatory practices being introduced in relation to Irish suppliers to the retail grocery trade; her views in this regard; and if she will make a statement on the matter. [19868/09]

Mary Coughlan (Donegal South West, Fianna Fail)
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I am aware anecdotally of complaints against retailers alleging abuse in their dealings with suppliers. The business relationship between retailers and suppliers is subject to general contract law, enforceable by the Courts. The Competition Acts 2002 to 2006 are also relevant in that they contain specific provisions prohibiting retailers from engaging in certain anti-competitive practices in their dealings with suppliers.

Section 4 of the Competition Act 2002 prohibits agreements, decisions and concerted practices that have as their object or effect the prevention, restriction or distortion of competition. Anti-competitive practices such as price fixing, limiting or controlling production and markets, market sharing, applying dissimilar conditions to equivalent transactions with other trading parties (thereby placing them at a competitive disadvantage) and making the conclusion of contracts subject to the acceptance of supplementary obligations are specifically excluded.

However certain agreements or concerted practices entered into between two or more undertakings operating at different levels of the production or distribution chain, which relate to the conditions under which the parties may purchase, sell or resell certain goods or services within the State may fall outside the scope of section 4. For example, non-exclusive distribution agreements whereby the supplier agrees with the buyer to supply the contract goods or services to the buyer for a certain territory but without any restriction on supplying other buyers within that territory are deemed to be outside the scope of section 4. Certain agreements and practices can avail of a block exemption from competition rules, others require assessment on a case by case basis while hard-core anti-competitive practices e.g. price fixing is always prohibited.

Section 5 of the 2002 Act prohibits abuse of a dominant position. The creation or existence of a dominant position does not breach the Competition Acts, rather it is the abuse of that position that constitutes the breach.

The Competition (Amendment) Act 2006 strengthens the provisions of the 2002 Act by prohibiting: · the imposition of resale price maintenance in regard to the supply of grocery goods (resale price maintenance is the practice whereby manufacturers or suppliers specify the minimum prices at which their goods may be resold);

unfair discrimination in regard to the supply of grocery goods. This is a reference to a supplier offering preferential terms to one buyer over another even though the transactions involved are equivalent in nature;

retailers or wholesalers of grocery goods from compelling or coercing suppliers into payment of advertising allowances (eg. where a retailer seeks payment from a supplier in order to advertise the supplier's goods as a means of attracting customers to the retailer's premises);

retailers from compelling or coercing suppliers into payment of 'hello' money (i.e. where a retailer demands a payment from a supplier before agreeing to stock that supplier's products). The circumstances in which the practice will be prohibited include on the opening of a new store, an extension to an existing store or a change of ownership of a store.

The legislation provides for the investigation of a breach by the Competition Authority and for prosecution on indictment by the DPP. Alternatively, aggrieved suppliers may take a private action for relief by way of injunction, declaration or damages including exemplary damages. Should the Deputy have any evidence of undertakings in the retail sector engaging in prohibited practices, I would urge him to bring such evidence to the attention of the Competition Authority in order that it may be investigated fully.