Dáil Éireann - Volume 327 - 25 February, 1981
Private Members' Business. - Food Prices: Motion (Resumed).
The following motion was moved by Deputy B. Desmond on Tuesday, 24 February 1981:
That Dáil Éireann, aware of the extent to which the major price increases in food items have caused grave hardship to the most disadvantaged sections of the community, calls on the Government to restore and increase price subsidies on certain food items and furthermore gravely concerned about the current “price war” between certain retailers in the grocery retailing trade and the prospect of bankruptcies, take-overs and unemployment in the Irish retailing sector with the consequence of higher retail prices imposed on the consumer, calls on the Minister for Industry, Commerce and Tourism to make an Order to prevent the distortion of competition under present practices and to prohibit the limitations on offers at retail level.
Debate resumed on amendment No. 1:
To delete all words after “Dáil Éireann,” and substitute
 “affirms its approval of the measures being taken by the Government to control prices in the present difficult economic circumstances and, notes the existence of a code of law relating to competition in the grocery sector, from which the consumer has derived substantial benefits, the initiatives already taken by the Minister for Industry, Commerce and Tourism in this area, his intention to publish very shortly the report of the Restrictive Practices Commission on below cost selling and to take appropriate action on the Commission's recommendations.”
—(Minister of State at the Department of Industry, Commerce and Tourism, Deputy Meaney.)
Minister of State at the Department of Industry, Commerce and Tourism (Mr. D. Gallagher) Minister of State at the Department of Industry, Commerce and Tourism (Mr. D. Gallagher)
Minister of State at the Department of Industry, Commerce and Tourism (Mr. D. Gallagher): When my colleague, Minister of State, Deputy Meaney, spoke to this motion last night, he was outlining the legislative framework which applied to the distribution of grocery goods. Time did not, however, allow him to deal with more recent events in this area and the manner in which the existing legislative regime can be availed of to deal with developments. It was acknowledged by the Opposition speakers that there was in existence a code of legislation but it was suggested that this was not working. I propose now to resume where my colleague was forced by pressure of time to stop last night and to demonstrate that the present regime has been successful and where because of various innovations and other developments the specific law is found to be wanting the overall framework provides the facility with which to tackle the problems arising.
In early 1978 an alliance of wholesalers and independent retailers was formed. In its early activities the alliance sought
(a) to compel manufacturers to take steps to end the sale of their products below cost by supermarket multiples, and
(b) to win a “functional” discount for wholesalers from manufacturers.
 This alliance gave to its members a collective negotiating strength comparable with that of the multiples and in so doing brought about a significant change in the balance of bargaining power in the trade.
As a result of conflicting pressures arising from the activities of the alliance one Irish supplier found itself faced with considerable difficulties and there appeared to be a possibility that other suppliers could be similarly effected. At the request of the Minister, the Examiner of Restrictive Practices held discussions with representatives of the manufacturers and the alliance, which resulted in a suspension for three months of the action which had been taken. Subsequently, at the Minister's request, the commission held informal discussions with representatives of all the interests in the trade. In November 1978 the commission made to the Minister a non-statutory report in which they recommended that the grounds on which goods might be withheld from a retailer by a supplier should be altered from selling below wholesale price to selling below net invoice price plus VAT. They also recommended that this provision, which since 1973 had not applied to foodstuffs, and the prohibition on below cost advertising, which had not applied to non-foods, should be extended so that each covered both foodstuffs and non-foodstuffs subject only to the exception of the foodstuffs specifically exempted.
In their report to the Minister on the outcome of their informal discussions the commission also indicated that they had reached an understanding with the multiples that they would refrain from selling below cost for a number of months, while the alliance for their part agreed to continue their moratorium on further action for a similar period. The commission expressed the hope that the intervening months would be used to seek a solution to the basic problem of terms and conditions. The Minister accepted generally the recommendations and gave effect to them in the Restrictive Practices (Groceries) (Amendment) (No. 2) Order 1978.
It was evident that great unease continued  to affect the relationships between suppliers, the multiples and the wholesalers and retailers. Certain discussions took place at that time with parties involved and it became clear that the continuing unease was largely centred on the question of below cost selling. The Minister for Industry, Commerce and Tourism accordingly requested the Restrictive Practices Commission to hold an inquiry into the retail sale of grocery goods below cost.
The commission's report of this inquiry has been submitted to the Minister and is the subject of most urgent attention. The Minister expects to be very shortly in a position to publish this report and to indicate the action to be taken on foot of the commission's recommendations. In view of the proximity of these matters it is not the intention to indicate now the type of action which is to be taken, but I would consider it desirable to recall that the aim of policy must be to foster competition wherever possible. This policy is clearly one which recognises — but not exclusively — the importance of the consumer interest and it has underlain all of our actions in this area down through the years. These actions have seen the dismantling of a large range of restrictions which have been of great benefit not alone to the consumer but also, to varying degrees, to the manufacturer and distributor.
It will be acknowledged from the foregoing that there is in existence the facility to deal with problems which exist in the supply and distribution of goods; a facility under which developments can be subjected to most exhaustive scrutiny, generally in public, and having regard to the special concerns of the various elements involved, as represented at inquiries, and to the interests of the common good, which allows of the making of recommendations to the Minister for Industry, Commerce and Tourism for remedial action where such is considered warranted. That this machinery is availed of adequately by the Minister requires little testament over and above the evidence provided in this sector by the frequency of interventions by the Minister both by  way of bringing the relevant statutory bodies into action and by way of legislative action.
It will be acknowledged that this machinery is of little use if the legislation which flows from it is not strictly enforced. To this end the Restrictive Practices Act, 1972, created the position of Examiner of Restrictive Practices, who is charged with the responsibility, inter alia, of monitoring the operation of orders made under the Act. If in the exercise of this role the examiner carries out an investigation into the operation of a particular aspect of an order and expresses the opinion in his report of such investigation that there has been a breach of an order, he is required to furnish his report to the Minister, who is enabled by the Act to prosecute offences.
For the past number of years the provision in grocery orders which has been of greatest concern has been that which prohibits the advertising of grocery goods for retail sale at a price which is below net invoice. When the Bill to confirm the 1978 Order, which amended the provision relating to advertisements of grocery goods for sale below net invoice price, was being debated in this House, the Minister indicated that it was his intention to enforce the provision vigorously. In this regard the House will wish to note that to date the Minister has obtained convictions in seven cases and a further three cases, about which he has received reports from the examiner, are pending. In considering these figures one should bear in mind the fact that promotions involving the sale of items below cost are not generally maintained over a lengthy period and that, accordingly, the need to advertise in a manner which would be in breach of the 1978 Order does not always exist.
Apart from the prosecuting function, the Restrictive Practices Act, 1972, also provides for another sanction which can be availed of by the Minister or other interested persons. This is a provision under which an injunction can be obtained from the High Court to ensure compliance by a person with the provisions of an order. In so far as the groceries orders are concerned, this machinery has  been availed of on one occasion when an injunction restraining a person from advertising of goods for sale below net invoice price was obtained. That case also had the additional benefit of confirming the interpretation of the phrase “net invoice price” which was being used for the purposes of enforcement.
Reference was made by Deputy O'Toole last night to the 1973 Groceries Order when he accused my colleague that “he avoided the crunch issue, which is article 8, section 2...”. The Deputy later stated this provision requires wholesalers and retailers to furnish details of grocery goods imported within 14 days and that this was: “to ensure that they import reasonably and do not go beyond what is allowed.” Continuing, the Deputy implied that an effect of paragraph 2 of article 8 was, “that there is no restriction on the volume or amount I import”.
Great importance is being attached to this provision and I believe that this reflects a serious misunderstanding of the provision, the reasons for it and what can be achieved by it. For this reason, I propose to deal with this matter in some detail in the hope that the position can be clarified in everyone's mind for once and for all. As my colleague indicated last night, the 1973 Groceries Order was made following a full inquiry by the then Fair Trade Commission in 1971.
The commission in their report did not make any recommendations in relation to imports. However, before the 1973 order was made representations were made to the Minister that Irish suppliers would be adversely affected by the operation of the then proposed order because the various requirements proposed in relation to terms and conditions of supply would not apply to manufacturers outside the State sending goods into the country. In particular it was considered discriminatory against Irish suppliers that they should be required to lodge with the Examiner a statement of terms and conditions upon and subject to which they supplied goods while the same was not required in respect of imported goods. It was subsequently decided that it would be desirable to provide as in article 8 as it would eliminate this discriminatory  aspect of the proposed order and the requirement to notify was, accordingly, included in the order.
It is to be stressed that the requirement is that a statement containing the terms and conditions upon and subject to which goods imported were purchased should be lodged within 14 days. Such a statement does not necessarily reveal the quantity of goods imported or, indeed, indicate clearly the specific item which is being or has been imported. Furthermore, the provision does not allow of the exercise of any control over a person's freedom to import nor does it allow of the imposition of any quantitative restriction. It was never the intention that it should allow of such. In this regard, I am sure Deputies are aware of our various international obligations which would not permit of the imposition of such restrictions.
Finally, in regard to this requirement, I should like to remind the Deputies that the actual provision in the 1973 order which gave rise to the inclusion of article 8 was removed from that order by the Restrictive Practices Order, 1978. The present legal position is, therefore, that Irish suppliers are required to lodge a statement of terms and conditions with the Examiner only when the Examiner requests them to do so but the person importing is still subject to the requirement of article 8.
I trust that this explanation of the background to and meaning of this provision will serve to clear up any misconceptions that exist.
Reference was also made last night to the level of concentration in the groceries sector being very high and it was suggested that this level was one which had not been attained in other European countries and, also, that the legislative regimes in other countries were such that increases in concentration would not be permitted. I am sure Deputies will agree that we could embark upon exercises which would adequately support that view or disprove it. I do not intend to embark on such an exercise but, nonetheless, the following pieces of information will I am sure be noted by Deputies.
 The recent trend in the Federal Republic of Germany has been towards greater vertical and horizontal concentration in food distributions with the trade becoming increasingly oligopolistic as a result of mergers and take-overs. A recent report on competition in that country, which was suggested last night as an example for us, shows that the three groups recording the largest turnover in food retailing hold a market share of 41.7 per cent the six largest firms 63.8 per cent and the ten largest 71.7 per cent. Figures from the United Kingdom suggest that the seven largest retailers control over 50 per cent of the market, while the Danish trade is represented as being the most highly concentrated in the Community with only five groupings accounting for all sales of food. Our own situation, where the multiples share is believed to be somewhat higher than 40 per cent, does not appear to compare badly.
As regards tackling the alleged monopolistic situation in this country, I will be referring shortly to the Minister's powers under the Mergers, Take-overs and Monopolies (Control) Act, but in this regard it should be noted that a monopoly situation as defined in that Act does not exist here in that no one enterprise, or enterprises under common control, supplies 50 per cent of the services in this sector.
Finally, in relation to the legislative regime which operates at present in relation to competition, it is pertinent to refer to the Mergers, Take-overs and Monopolies (Control) Act, 1978. There are two aspects of this Act which are of relevance to the area under discussion. The first of these is the role of the Minister for Industry, Commerce and Tourism in relation to proposed take-overs. Any proposed merger or take-over to which the Act applies must be notified to the Minister and, in general, his consent to the proposal must be received by the enterprises involved before they may proceed with the proposal. When a proposal is notified the Minister, having examined the notification, may either decide to allow the proposal to proceed or may refer it for more detailed investigation by the Examiner of Restrictive Practices. If a proposal is referred to the examiner, he must  report to the Minister whether in his opinion it would be likely to operate against the common good in relation to the criteria in the Act. The Minister, having considered the examiner's report, may then decide either to allow the proposal to proceed or to prohibit it absolutely, or allow it to proceed subject to certain conditions. The criteria to which I refer include such consideration as the extent to which the proposal would be likely to prevent or restrict competition or to restrain trade or the provision of any services: the extent to which the proposal would be likely to endanger the continuity of supplies, and the extent to which the proposal is in harmony with the policy of the Government relating to the rationalisation, in the interests of greater efficiency, of operations in the industry or business concerned.
This Act therefore enables the Minister to exercise control over proposed mergers or take-overs and, when he considers that the exigencies of the common good so warrant, to prohibit a proposal. The last proposal arising in this area which was notified to the Minister was allowed to proceed only after most thorough examination, including an investigation by the Examiner of Restrictive Practices. The House may be assured therefore that the controls which the Minister has available to him in this area will be speedily exercised and prohibitive action taken if circumstances so warrant.
The second aspect of this Act is that part relating to monopolies. The Act enables the Minister to request the Restrictive Practices Commission to carry out an inquiry to determine whether in the opinion of the commission a monopoly exists, and, if it does, whether it prevents or restricts competition, or endangers the continuity of supplies or is likely to do any of these things, and whether such interference or restraint of trade is or would be unfair or would operate against the common good. Having considered a report of such an inquiry by the commission, the Minister may, if he thinks the exigencies of the common good so warrant, prohibit the continuance of the monopoly except on conditions specified or require the division  of the monopoly by a sale of assets or as otherwise specified. In this regard I can assure the House that the Minister will not hesitate to use the powers available to him, including the power to break up a monopoly, if such a situation is achieved.
In summary, therefore, the House will note that there is already in existence a code of legislation which is aimed at ensuring the existence of healthy competition with consequential benefits for those involved from the manufacturer to the consumer, the initiatives taken by the Minister for Industry, Commerce and Tourism in relation to the groceries sector and his intention to publish very shortly the report of the Restrictive Practices Commission on below-cost selling and to take appropriate action on the commission's recommendations.
As has been mentioned by a number of speakers, the Labour Party motion before us tonight is a two-barrelled affair. It is noticeable from some of the Opposition contributions that the spokesmen on the other side of the House find it difficult to come to grips with the inherent conflict between the two parts of their motion. Their contributions in relation to price control have been of a significantly low key nature. That is not at all surprising, given that this House on a number of occasions in the recent past has clearly supported the Government's price control policies in debates on similar motions from the Labour Party.
It has been emphasised repeatedly that price increases are the symptoms of inflation and not its causes. The causes of inflation are in part external — for example, increases in import prices — and in part internal — for example, increases in money incomes. The external causes lie beyond the control of any agency in this country. All that is possible is action to limit their effects on the Irish price levels. The strength with which the internal causes operate can be influenced by the Government, employer and industry organisations and trade unions.
Firms apply for price increases after they have incurred higher costs. The job of price control is to consider each application and decide what price increase is  justified by the cost increases that the applicant has incurred, taking all relevant circumstances into account. As my colleague, the Minister of State, Deputy Meaney, said last night, if all applications for price increases were rejected while the external and domestic causes of inflation continued to operate, the consequence would be highly predictable. If firms were not allowed to recoup the increased costs of imported materials from higher prices, redundancies would occur and in many cases supplies of imported goods or materials to the Irish market could cease. If all applications based on increased wages and salaries were rejected, the result would again be redundancies and bankruptcies. If price control were applied in this manner, it would indeed soon become irrelevant, because no products would be available at the controlled prices and the social costs inflicted on the community would soon become intolerable. Price control cannot be operated without reference to the general objectives of both economic and social policy.
Since price increases are granted under the price control system all price control authorities tend to be identified with price increases. Attention is invariably focused on the price increases which are recommended because they are regarded as newsworthy. We are invariably treated to lengthy statements of despair from Opposition spokesmen — statements which as a rule, totally side-step the relevant economic facts. Attention is rarely directed towards that part of the price increases which is prevented from occurring due to the proper operation of the price control procedures. Since the establishment of the National Prices Commission by Fianna Fáil in October 1971 until the end of December 1980, the commission have dealt with 5,237 applications for price increases. Of these, 112 applications were refused totally. There were two main reasons for these refusals — the cost increases that were claimed were not adequately supported by documentary evidence or were not significant when compared to the applicants' total costs or current profits. Of the 5,237 applications  considered, 2,545, nearly 50 per cent were allowed in part only by the Commission. There were a number of reasons why these firms were not granted the full increases sought: the increases sought in materials and other costs were not supported by satisfactory documentary evidence or were not unavoidable, in which cases it would have been unreasonable to have expected the consumer to bear the expense; the firms sought price increases to cover increases in pay costs over and above the Government guidelines; or the applicants could reasonably have been expected to offset a part of the cost increases by improvements in efficiency.
In conclusion, I would like to reiterate the Government approach to the problems of rising costs and rising prices — strict control on price increases coupled with major social welfare improvements. It is undeniable that the increases which the Government have provided in health and welfare benefits since taking office in 1977 have been substantial, increases in some cases of up to 130 per cent. This is the mechanism which the Government have used for the transfer of purchasing power via the Exchequer to those who are most in need. This policy, together with the strict control of prices which my colleague and I have outlined is, I am sure, the policy which the House supports and I am confident that the House will accept the Government's amended motion.
Mr. Enright Mr. Enright
Mr. Enright: This motion is as important a motion as we have debated for many a day. First of all, I would ask the Minister seriously to reconsider the situation in regard to food subsidies, especially those for bread, butter, milk, baby foods and essential items. The Minister touched on the situation in regard to increases for the social welfare categories but there are other people as well. There are workers in factories and industry throughout the country. There are people engaged in lower paid employment and for the sake of those people and their families I urgently demand the restoration of food subsidies on essential food items. It is imperative. I am daily in touch with those people throughout the length  and breadth of my constituency and I know many families who are suffering hardships because of the increase in food prices, in electricity and in fuel. I call upon the Government to restore the food subsidies in sufficient quantities.
At present the Irish food industry has its back to the wall and is in extreme difficulty. All sectors are facing problems. Food manufacturers are having to rationalise and lay off staff and many face a break future. Farmers are having to dump their produce. Independent grocers all over Ireland are closing their doors and consumers are paying exorbitant prices for foodstuffs. We are now so heavily dependent on food imports that the Minister is becoming powerless to control the price of foodstuffs. Sadly there is no evidence that the Government wish to exercise any control in this area. In fact this problem has been compounded by the Government's pre-occupation with the general election. The inactivity of the Minister, Deputy O'Malley, in the area of controlling price increases, his failure to protect independent retailers, his lack of interest in food manufacturing, has allowed control of the Irish food industry to fall into the hands of multinational foreign-based corporations. Already they are dominating the Irish food industry and food import figures now suggest that more than half of the food in this country is imported from outside the State. Thus the great efforts of many Irishmen and Irishwomen for centuries to obtain independence for this part of Ireland have been dissipated. We are militarily dominated by Britain. Now we are in danger of being dominated economically.
An Leas-Cheann Comhairle Sean Browne
An Leas-Cheann Comhairle: The Chair is closing his eyes to it at the moment but, in case it is taken as a precedent, no Deputy is entitled to read his speech in the House.
Mr. Enright Mr. Enright
Mr. Enright: The food industry here is being silently taken over. Twenty per cent of our population is engaged in agriculture-related employment which is now threatened by foreign markets. Why are the Government so insensitive to the  problems of the food industry? It is imperative for all of us that we understand that the food industry cannot be compared with, say, electronics or engineering or with high technology industry, all of which we all welcome but which cannot be compared with the food industry. Many of the industries coming in and getting Government aid intend to export but food imports are coming in and that is the real danger. The Minister does not seem to be grasping this situation. I am afraid that the Minister is sleeping on the job while our food industry is being undermined and taken over by outside interests. There are three Ministers in the Department of Industry, Commerce and Tourism — Deputy Gallagher, Deputy Meaney and Deputy O'Malley. I honestly believe that between the three Ministers they are going to have to sit up and take notice of this real, urgent problem. There is a major job to be done for the protection of the food industry here and those Ministers are the people charged with that responsibility. It is imperative that they give the lead to the country in trying to take control of this urgent, important matter because it is important to every person in the country.
Last night the Minister made a lot of play about the role of the Minister for Industry, Commerce and Tourism in keeping price increases to a minimum. He centred his case mainly on the fact that the Minister had recently allowed only a 5p increase on the loaf when bakers were seeking increases between 9½p and 10p in the maximum retail prices. I wish to draw the attention of the House to the fact that in a 13 month period between December 1979 and January 1981 there was a whopping 51 per cent increase in the price of bread. The maximum price of bread during that period has increased from 29p per loaf to 44p per loaf. The Minister certainly does not deserve any accolades for keeping down the increase in the price of a loaf to 5p. If the Minister had done his job in ensuring that the provisions of the Restrictive Practices (Groceries) Order, 1973 were being fairly implemented then there would not have been a need for this price increase. Yes, the baker needed a price  rise but this was because many of these bakers are being forced to concede huge discounts to the five multiple giants, Dunnes Stores, Superquinn, H. Williams, Quinnsworth and Tesco. The multiple supermarkets buy only 20 per cent of all the bread baked in this country. Yet the independent retailers who buy 80 per cent of the same bread have to pay 5p per loaf more for it. Not alone is this unfair competition but it is illegal and contrary to the Restrictive Practices (Groceries) Order of 1973. I am informed that this has been brought to the attention of the Minister and the Examiner of Restrictive Practices but as far as I am aware nothing has been done about it. If the Minister was concerned about keeping down prices he would take action to ensure that the huge supermarket chains would not squeeze out the unfortunate food manufacturers by obtaining large discounts which are thrown back on the independent retailers. This situation pertains in relation to many other food categories — soups, canned vegetables and so on. The Minister must act to limit the uncontrolled development of super stores. Unless he does so the alarming rate at which food imports have increased in this country will continue to escalate.
I want to draw the attention of this House to the fact that food imports last year increased enormously. Over the last few days, while I was preparing for this motion. I got in touch with the Central Statistics Office. One of the most alarming facts is that imports of meat and meat products have increased by nearly 100 per cent, from £12 million to £24 million in 1980. The importation of dairy products has increased by over 60 per cent, from £15 million to £24 million. Imports of fruit and vegetables have increased by over 34 per cent, from £74 million to £100 million. It is essential that we sit up and take notice. We are sleeping at present. It is sad to see us importing dairy products, meat, meat products, rashers and other bacon items into this country when to survive as a nation we have to export these items instead of importing them.
In the past the smaller grocers and the people who have helped this country to  survive have had a long history of loyalty to the Irish nation and Irish suppliers. The multiple supermarket chains may not have the same loyalty, and this is not surprising. A lot of these multi-nationals own foodmarkets outside Ireland, especially in the UK. Quinnsworth have an interest in Twining's Tea, Associated British Foods and Anglia Canners whose products seem to get a lot of shelf space within the Quinnsworth stores. I admit that some of the multiples support Irish-manufactured goods, but much of this support is at a price. Irish food manufacturers no longer sell on economic terms to the multiples. The supermarkets now demand to see the general manager of each of their suppliers and they tell the general managers that unless they can meet the demands of the multiples then their products are not wanted. I am afraid that food imports into this country will continue to escalate unless action is taken, and Irish manufacturers will go to the wall as well, at least some of them. Already half of the Irish food manufacturing industry is controlled from outside Ireland. This, added to our import figures, shows the precarious state of our food manufacturing industry and that the work of the Minister and the Government in this area has come to nothing.
In 1979 the Minister with much heralding announced the setting up of a working party to consider measures to promote intensified import substitutions and greater purchases of Irish goods. Nothing has been heard of the working party since and the fruits of their work are not evident in the import figures. I wonder if they have even met, and if they have what has become of their report? I have not seen anything about it. People in the independent grocery trade understandably are very sore at the lack of response from the Government, in particular from the Minister for Industry Commerce and Tourism, to their problems. The independent retailers and the grocery sector feel that the Minister is anxious to do them down. I hope that this is not correct and that the Minister will prove this to the country and all of the people involved in the field of trade.
At present 40,000 people are employed  in the retail grocery sector and they are all becoming increasingly impatient, and that is understandable. I want it to go on the record of the House that since the last public inquiry in 1972 5,000 more independent grocers have gone out of business. Five thousand family businesses are no longer in existence and approximately 20,000 jobs have been lost. During the course of the report of the 1972 inquiry the commission concluded, and I quote from the report: “A question frequently raised is the degree of foreign penetration in this field. There are now two foreign owned multiple firms operating in this country and in 1970 they accounted for something over a quarter of total sales by multiples whose accounts we examined. Existing Irish-owned multiples did not foresee any likelihood of takeovers by, or mergers with, foreign interests in the immediate future, but this cannot be ruled out nor can the establishment of new supermarkets by foreign interests”.
The fact that two multi-national chains now control close on 30 per cent of the Irish grocery market is a clear indication of how wrong the commission's conclusions were at that time, and there is a great danger that the findings of the public inquiry into below cost selling conducted 15 months ago may already be outdated. Within the last 12 months a study into unfair competition by multiples was conducted in the Carlow-Newbridge area. That study, which was conducted by the Geography Department of UCD, concluded that 40 retailers in the Carlow-Newbridge area were forced out of business through unfair competition and that approximately 69 jobs were lost in the area. How many more jobs will be lost before the Minister will take action? In the last eight years 5,000 small businesses closed. When will the Government act in regard to this? Will they act when another 1,000, 2,000 or 3,000 businesses close? Are the independent grocers correct when they claim the Minister is presiding over their demise? There is a great danger of this and I am concerned over it.
The fact that below cost selling increases prices to the consumer is no  longer in contention. It is admitted readily that below cost selling does increase prices to the consumer. The food manufacturers themselves in their evidence at the public inquiry into below cost selling demonstrated this amply. Therefore, who benefits from below cost selling? Certainly not the consumers, certainly not the manufacturers and positively not the independent retailers.
The amendment as set down by the Minister shows an amazing and appalling lack of sensitivity to the current problems in the grocery trade and in the food industry and as a result three of the leading supermarket chains in recent weeks have gone unpunished for their unfair and most misleading advertising. I would like to draw to the attention of the House the report of the Director of Consumer Affairs published on 17 December, and I quote from that report: “An advertisement for Superquinn Ltd. contained an illustration of a wide range of products and the statement `from to-day Superquinn will dramatically cut these products' prices' ”. In one Superquinn branch at least it appeared that there had not been any reduction on that day in the price of four of the products illustrated. I continue the quotation: “The Director issued a formal request under section 9 (6) (c) of the Consumer Information Act, 1978 requiring the Company to exercise care to avoid giving a misleading indication of previous prices”.
An Leas-Cheann Comhairle Sean Browne
An Leas-Cheann Comhairle: What is the Deputy quoting from?
Mr. Enright Mr. Enright
Mr. Enright: The Director of Consumer Affairs' report.
An Leas-Cheann Comhairle Sean Browne
An Leas-Cheann Comhairle: The Chair has allowed quite a bit of latitude on all those things but when we are mentioning firms outside the House we had better be very careful that we do not make charges against them here by implication or otherwise.
Mr. Enright Mr. Enright
Mr. Enright: I have the quotation from the Director of Consumer Affairs' report here in front of me.
An Leas-Cheann Comhairle Sean Browne
 An Leas-Cheann Comhairle: All right, continue, please.
Mr. Enright Mr. Enright
Mr. Enright: Outside the privilege of this House some time ago I said that in my view at present there have been a lot of misleading claims in regard to adver tising by some of these supermarket chains. One supermarket chain stated that their prices will be lowest week after week. Then they changed from “lowest” to “low”, which is a very important difference and this fundamentally affected the whole advertisement. In a similar advertisement they said that there was a request by the group to let them know if any other prices were lower so that they could change their prices. I might add that that attractive offer has not been repeated in recent weeks. A further advertisement stated that there would be no price increases. That was an extravagant and very blatant statement. I have the original advertisement showing that, and I have since checked the prices in the intervening period of approximately six weeks and there have been increases. It is unfair that such advertisements should be allowed. They are very misleading. A lot of newspapers have taken a courageous stand in printing the articles regarding this matter because — make no mistake about it — the big supermarket chains exercise a lot of muscle. They are huge advertisers.
The public inquiry into below cost selling is so long overdue that it has become irrelevant. The Minister should take immediate action to ban below-cost selling and he should also introduce measures similar to those introduced by our EEC neighbours and limit the development of some of these supermarket chains, thereby ensuring that the element of competition will continue in the retail grocery market. The only way of ensuring healthy competition is by insisting that our marketplace is not dominated by outside interests. The Minister should ensure and encourage the orderly growth of the retail trade. He must also ensure fair and just trading terms for all parts of the county, which will benefit the consumer.
This whole matter has been discussed  at length. The Government must wake up to the fact that it is a very important matter. Many of our small business are in real difficulties at present and some have closed. The manufacturers and distributors are also in difficulties. In my constituency, Laois-Offaly, it saddens me to see huge trucks with trailers arriving and unloading tons of food which we are capable of producing. This message must be brought home to the people. If we take action in this everyone will back it. It will retain essential jobs which will benefit everybody. It will also mean that the consumers, in the long run, will be better off. We must not allow our agricultural industry, which is so important, to be hit by imports. Our meat factories, vegetable processing plants and so on are also affected by food imports. We must shout “stop” before it is too late.
When the Minister was in Opposition, Fianna Fáil called for the introduction of food subsidies. The National Coalition Government of which I was a backbencher, listened to the speeches of members of the Fianna Fáil Party at that time. We realised that food subsidies were essential and they were brought in. The Minister's about-turn in Government of partially dismantling food subsidies was a very great blunder. Even at the eleventh hour the Government should restore food subsidies, because they will help to reduce inflation, which is seriously affecting employment prospects in all sections of the community, but particularly in the food industry. There is a most amazing graph which Members of the Government should look at. It shows that the rate of inflation here was starting to fall, but when the Government dismantled food subsidies the graph levelled out and has been rising and rising until we reached 20.2 per cent inflation rate in one quarter. This has had a serious and detrimental effect on all aspects of life. I hope the Minister will consider the reintroduction of food subsidies. It would help every section of the community. Subsidies should be on essential food items which are used by families, widows, old age pensioners and the unemployed.
I urge the Government to withdraw  their own amendment and to accept this motion, which is in the interest of the country which we all serve.
Mr. P. Lalor Mr. P. Lalor
Mr. P. Lalor: I confess this is a subject in which I have a pronounced interest. It is not simply and solely because of the fact that the Restrictive Practices Order which is the subject of quite an amount of discussion in the debate was an order which I made in the beginning of 1973, shortly before we went out of office. It is a subject on which I felt very strongly down the years and it was one of the very last functions in my capacity as Minister for Industry and Commerce in 1973 when I made this restrictive order because of my — I would nearly go so far as to say vested interest — in the welfare of the grocery retail business. One of the things that struck me last night and tonight in relation to the whole discussion is the impression being created by the speakers on the far side of the House that this development over the last 12 months is something new. I was rather surprised when I heard Deputy Barry Desmond speaking that he did not seem to be as aware as he might have been that this is a problem which has existed for a number of years. It is a problem I had hoped to resolve in January, 1973. It transpired that the action I took at that stage had, of necessity, to be amended on a number of occasions and we still have the problem with us.
That is why I am surprised to hear Deputy Enright appealing to the Government to accept the motion in the name of the Labour Party. I do not wish to say anything derogatory about motions in the name of the Labour Party or about the thinking behind such motions, but when one analyses the motion before us one realises that there is nothing in it. Last weekend I received a letter from interested parties asking me to be present in the Dáil this week for this debate and to do everything possible to help. It was not necessary for these people to write to me because I have at heart the well-being of the small trader. I was one of that category of people in the past but I went out of business.
Mr. Kavanagh Mr. Kavanagh
 Mr. Kavanagh: The Deputy was not taken over by multinationals.
Mr. P. Lalor Mr. P. Lalor
Mr. P. Lalor: I am one of those 8,000 family grocers to which reference is being made.
Mr. B. Desmond Mr. B. Desmond
Mr. B. Desmond: But the Deputy's business was not taken over.
Mr. P. Lalor Mr. P. Lalor
Mr. P. Lalor: That is correct. Perhaps the situation arose from my giving so much of my attention to parliamentary duties and not enough to my little business. However, I was involved in that business for long enough to be aware of the problem faced by the small trader and to subscribe fully to the anxiety being expressed on their behalf. I would not take from that expression of anxiety in any way but we must be realistic. The reality of the situation was outlined by the Minister a short while ago when he indicated the situation that exists in a number of other EEC countries which Deputy Deasy seemed to overlook last evening when he talked about 50 per cent of our business being done through the leading supermarket chains.
The Opposition are appealing to the Government to withdraw their amendment and to consider seriously the Labour Party motion. We have been told that this is a two-tier motion but let us consider what it consists of. In the first half, Labour are complaining about prices being too high while in the second part they complain that prices are too low. Their big problem would seem to be in making up their minds as to which side they are on. On that part of the motion which deals with prices being too low we find that there is expressed grave concern about the current price war between certain retailers in the grocery retailing trade and about the prospect of bankruptcies, take-overs and unemployment in the Irish retailing sector with the consequence of higher retail prices being imposed on the consumer.
The motion calls on Dáil Éireann to call on the Minister for Industry, Commerce and Tourism to make an order to prevent the distortion of competition  under present practices and to prohibit the limitations on offers at retail level. In effect the motion asks simply whether the Minister would endeavour to do something about the present situation and would set about drafting a restrictive practices order that will work. I must confess that the order I drafted on those lines in 1973 has not been found workable. Shortly afterwards there was a change of Government and I was replaced in the Department by a Labour Party Minister who in his wisdom later that year set out to copperfasten what I had endeavoured to do. He found some small flaws in a section of the order and changed it so that it might be more operable and more effective. He introduced the Restrictive Practices (Amendment) Order, having endeavoured to close off any possible loopholes. However, this falling off in the number of small grocers continued during the Coalition years and we have the growth of the supermarket business. Apparently we did not notice until relatively recently how effective the operation was. At that time we were being afflicted by what we might call the loss-leader disease whereby supermarkets were prepared to sell some items at a little less than cost price. The order of 1973 had been aimed at overcoming that situation, a situation which we have today and which is known as below-cost selling. It is a problem that must be tackled.
I would ask the members of the Labour Party who were genuine in tabling this motion to consider seriously the Government amendment. This amendment does not seek in any way to take from the problem that is there and we accept that there is a problem. As is indicated in the amendment, the Minister for Industry, Commerce and Tourism intends to publish very shortly the report of the Restrictive Practices Commission on below-cost selling and to take appropriate action on their recommendations. In other words, the Minister has taken the initiative in this regard. As has been pointed out this evening by the Minister of State, the Minister has received this report. I suggest that what we have had these past two  evenings from the Opposition on this subject is an indication of their awareness that the problem is a matter of serious concern to the Government. Yet, the Opposition are asking us to rush our fences, to make a hurried decision, instead of analysing what is contained in the report referred to.
I recall the report on which I based my order of 1973. That was a more general report of the commissions in connection with trading whereas the present report deals specifically with below-cost selling. From the Government we have an amendment seeking the Dáil's approval for the initiative taken by the Minister in regard to the report and asking him to take the appropriate action on the commission's recommendations. By way of follow-up to that, we have had two Minister of State at the Department giving us the assurance of the Minister for Industry, Commerce and Tourism that within the next month this report will be published and that the Minister will then take appropriate action. I have not heard either of the two Ministers attempting to gloss over the fact that we have a problem here. It is accepted that a problem exists. Seven years ago I made an order which despite the patching up done on it in the meantime is still not effective in finally achieving the purpose for which it was originally meant. I ask promoters of the motion who say we should go ahead and do something about it to accept the amendment which in effect says the report on this matter comes out next month and we then propose to take the appropriate action arising from the recommendations in that report. I do not think it is harmful to the trade that the movers of the motion are interested in and in which hopefully the Minister is interested to adopt that course. Their interest will be best served by awaiting the report and not by appealing blindly to the Minister, so to speak, to take appropriate action.
Learning from my own experience as a former Minister for Industry and Commerce, from the experience of the Labour Party of the activity of their Minister who said at the end of 1973, as I did at the beginning of that year, that he was  doing the right thing for the small grocers, there is much to be said for awaiting the collective views of the Restrictive Practices Commission. I know they are an over-worked group and we cannot be critical of the fact that they have taken time to produce this report. They have made a full investigation and have given a considered judgement in their recommendations to the Minister which he is now looking at. He will publish those recommendations within the next month and hopefully he will be in a position almost immediately after publication of the report to produce his proposals and the kind of changes he wishes to make in the restrictive practices order.
Mr. B. Desmond Mr. B. Desmond
Mr. B. Desmond: I shall try to deal with a number of points as quickly as possible in replying to the debate. On the question of food subsidies. I want to correct the general impression being created by the Government side that for some peculiar ideological or egalitarian reason the Labour Party are totally preoccupied perpetually with food subsidies right across the board. This is manifestly untrue. What we find sticking in our craw — to use an Irish expression — is that Fianna Fáil have come into office on three separate occasions and each time they either totally abolished or partly dismantled food subsidies. Bread is becoming a very difficult issue in terms of discounts and allowances at different levels, perhaps in the case of these three items in particular, bread, milk and butter there should be an element of subsidy because they are basic commodities on which, by and large, low income families, the elderly, the deprived and families with a large number of children spend a greater proportion of their income. That is a basic truth evident from any of the household budget surveys and evident whether you are a trader or a family person catering for three, four, five or six children. We are not in favour of universal subsidies which we can see as wasteful of resources but on a highly selective basis we favour their introduction.
I shall first deal with low cost trading and my concluding comments will be on the general supermarket structure. As  regards low cost or below cost trading the dangers inherent in the current outbreak of what I can only classify as retailing stupidity on the part of certain individuals, that outbreak is not in the national interest or in the interest of the retailers, the suppliers or the manufacturers. Ultimately, it is not in the interest of the consumers who are workers. There are 30,000 Irish workers directly engaged in the manufacturing sector for the domestic market and another 10,000 or 12,000 engaged in the export trade. If you crucify the base of the Irish food industry in the domestic market your export trade is irrelevant. You cannot engage exclusively in exports out of the food sector; you must have some ratio of domestic to export sales and on that basis it is selfevident that below cost trading is by and large economic suicide.
I want to repeat what I said last evening: the only people who would benefit from it are the large multinationals who have moved into Ireland most effectively, have spent a great deal of money and have free access into the Irish retail setup which is unique as Deputy Lalor knows from his experience in the European Parliament and as I know from my seven years' experience in the Economic Affairs Committee of the Council of Europe. I meet many Social Democrat members and many members of Christian Democratic parties there and they tell me that the kind of sanctioning we have in Ireland, whether as take-overs by monopolies of domestic retail outlets or in the granting of planning permissions — and I speak to my counterparts; I am chairman of half-a-million people in Dublin lin County Council area — nowhere in Britain or on the Continent of Europe would planning permission be given to foreign outlets to move into areas which have a degree of catering in the retail structure. They would not get that permission. I have had occasion to examine the policy guidelines of the Right Honourable Mr. Hazeldene in the British Minister of the Environment and neither there, nor in any one of the structural areas of the regions of, say, France and particularly Strasbourg with which Deputy Lalor would be familiar, would they  allow uncontrolled development affecting the retailing structure to develop as has happened here. More particularly, I want to refer to the basic damage which can happen to the economic structure. I am not what one might call a chauvinistic, schizophrenic Irish person who considers as a disaster everything foreign coming in. There is a certain excessive element in the Irish make-up in that regard. I welcome foreign industry into this country and a degree of imported products, even on the retailing side. However, we the politicians have a fundamental obligation to maintain a balance. In the national interest, we must intrude outselves, even if we get blood on our faces now and again, into the structure of both distribution and retailing. I listened to Deputy Lalor with great interest and had discussions with Deputy Justin Keating when Minister in relation to this area and fully appreciate its complexity.
I am not very much impressed by the Restrictive Practices Commission. I have known, witnessed and seen the past three chairmen of that commission. I took note of the speed, effectiveness and composite view which they showed in that area. This is a personal criticism which may be resented by the gentlemen concerned. That commission has, on occasions, acted rather eccentrically in terms of its recommendations and with some degree of confusion. We the politicians must give the time and devote all our energies to drafting orders to control people who are anxious for profit in their own personal interest, in many respects for short-term gain. In the long run, the consumer, the worker, the manufacturer and the supplier are crucified as a result.
I am extremely worried about the latest report of the Restrictive Practices Commission which has been on the Minister's desk now for, perhaps, two or three months, according to information elicited at Question Time. I am rather worried, when a report is not published, in case it encourages the perpetual panacea of the Department of Industry, Commerce and Tourism, that since it is a serious, complex and difficult problem, the solution of which is likely to annoy  some people, let us do nothing about it. Let us see if the politicians will stop talking about it and if the pressure groups will fade away. Let us do nothing about it. There will be a general election in June, September or whenever it is going to be and we might do something after that because it will not be too unpopular to become involved.
There is chaos developing in the price structure. I hope the Minister will not come in here in three or four weeks' time saying “There is the report. It is rather vague, rather repetitive, going back over the old ground. There are all sorts of complexities and we could face High Court actions and further contesting of grocery orders and ultimately even constitutional questions might be involved, so we are not going to do anything about it. If RGDATA and the IADT stay quiet about it, I will stay quiet about it.” With due respect to a Government with 15 Ministers, 15 Ministers of State and the highest number of advisers in the history of the State, they should certainly be able to grapple with this problem.
We are not unique in Europe. There is a body of evidence available. Deputy Lalor well knows that in the meantime we are facing the kind of situation which Deputy Lalor and Deputy Kavanagh faced here and the other members of the European Parliament also faced. He will be going down to Erin Foods, as he went recently, saying “We are terribly sorry. The jobs are gone because the multinational firms setting up here are importing fruit and vegetables, selling them here and not giving a twopenny curse whether it concerns Erin Foods or apple growers from Dungarvan or anywhere else. “We must act in the national interest.
We all look at programmes on RTE about Irish history and political and coercive domination. What, in fact, is happening in the retail distributive sector here, slowly but surely, is total economic domination. I am a moderate and believe in a mixed economy. I believe in retailers, private, small, large in a proper mix. I am not particularly ideological about it. There is a great need for the Minister to act in this regard. I hope that in about six months' time, after the next election,  whoever is Minister, we will not have yet another commission set up, another publie hearing and meanwhile chaos.
The push which is on in relation to this problem does deserve a positive and definite response from the Minister. I have a personal regard for Deputy Gallagher who is extremely competent and sensitive in this area, who has met the representatives of these organisations and has a personal concern about uncontrolled development. He will be able to get to grips with this situation and he might, perhaps, keep Deputy O'Malley out of it. Deputy O'Malley has a bristling attitude towards representations in this area.
There is chaos at present. Some of the larger multinationals and the large Irish supermarket owners have been in contact with me kicking up hell over what I said yesterday and some are to see me tomorrow. I believe that they have a role to play but I do not want to see Williams and Superquinn of Ireland going out of business here, to be totally dominated by three main groups, all retailing outlets, by and large. We need to have about 8,000 or 9,000 retailers spread throughout the country who must get a reasonable deal, some even in the context of the food subsidy motion which I have advocated. I believe in subsidies on bread but I do not want to see the subsidy going to major bakery concerns who give 28 or 30 per cent discount — as I have known them to give — off bread to large multinational supermarkets, while the ordinary grocer around the corner is very lucky if he gets 10 or 11 per cent. That is unfair competition and a waste of food subsidies and sticks in my craw. That is a situation with which the Minister must deal effectively, even if, in the process, some of our bakery concerns selling on a selective rebate basis may find themselves before the Department's officials, explaining very clearly the situation in the context of the use of food subsidies.
The motion of the Labour Party is one  of concern. I reget that, due to the shortage of time, my colleague, Deputy Bermingham, who is a small shopkeeper, was not able to contribute to this debate. I can assure Deputy Gallagher that it is not just a selective concern. This is a problem which has been discussed in the Parliamentary Labour Party on many occasions. Deputy Justin Keating, when Minister, pointed out all the complexities of the problem. Deputies Lalor and O'Malley and a bevy of staff at the Department of Industry, Commerce and Tourism have experience of it. There were some 17,000 or 18,000 independent — and the word “independent” is perhaps a misnomer here — relatively small retailers here about 12 or 15 years ago. They are now down to 7,000 or 8,000. I do not want to see that figure reduced to 3,000 or 4,000.
Last year we imported, into an agricultural country, about £13 million of meat and meat preparations, £15 million of dairy produce, £11 million of fish and fish products and £77 million of cereal and cereal products. I could go on. We imported — which was a national scandal — £67 million of fruit and vegetables. The vast bulk of those food imports came in through wholesalers and retailers, with selective deals for the large outlets in the country, and Irish domestic growers, food factory owners and workers in these firms were pushed out. We cannot have that situation. Let us try to come to grips with the problems we have unfortunately developed due to lack of political action.
I move this motion and recommend the Minister, particularly Deputy Gallagher, to take action in this area as a matter of urgency before it becomes not only a major political issue but before it becomes an issue affecting the livelihood of Irish workers.
Question put: That the amendment be made”.
 The Dáil divided: Tá, 58; Níl, 40.
Tellers: Tá, Deputies Moore and Briscoe; Níl, Deputies L'Estrange and J. Ryan.
Amendment declared carried.
Motion, as amended, agreed to.
Dáil Éireann 327 Private Members' Business. Food Prices: Motion (Resumed).