Seanad Éireann - Volume 82 - 15 July, 1975

Restrictive Practices (Confirmation of Order) Bill, 1975: Second and Subsequent Stages:

Parliamentary Secretary to the Minister for Industry and Commerce (Mr. Bruton): The purpose of this Bill is to confirm an order which was made by the Minister for Industry and Commerce under the Restrictive Practices Act, 1972. The order was made on the recommendation of the Restrictive Practices Commission which was contained in their report of a special review carried out into the supply and distribution of petrol. The report and order were presented to both Houses of the Oireachtas on the 18th June, 1975.

It might help if I explained the background to the making of the order. Some years ago the Society of the Irish Motor Industry asked the Minister for Industry and Commerce to examine the possibility of curbing the growth in the number of petrol retail outlets. The Minister requested the Restrictive Practices Commission to hold a public inquiry into the matter and the inquiry was held in 1970.

The report of the inquiry showed that the number of retail outlets owned by the oil companies had been increasing unduly and the proportion of total sales of petrol through these outlets had risen substantially. The commission felt that unless this trend was checked the oil companies would gain substantial control over retail distribution. [308] Such control would probably reduce competition, facilitate restrictive practices such as market sharing and price fixing, and extend the economic power of the multinational oil companies.

The Restrictive Practices Commission recommended, among other things, that the oil companies should not open any new company-owned retail outlets for three years. This recommendation was accepted by the Minister and on the 15th June, 1972, he made the Restrictive Trade Practices (Motor Spirit) Order, 1972. Article 3 of that order prohibits oil companies from opening new company-owned petrol stations for three years ending on the 18th July, 1975. However, there were three exceptions to the prohibition, the first being a transitional one which applied to certain retail stations under construction when the 1972 order was made. The other two allowed a company-owned retail outlet to be opened within a mile of one which had closed down (a) because of compulsory purchase by a local authority or (b) because of loss of trade due to road diversion. The Minister undertook at the time to ask the Restrictive Practices Commission to review the operation of the prohibition before it expired on the completion of its three-year period of application.

The review, which took the form of a series of private hearings, was carried out last March. The hearings were attended by representatives of seven oil companies, the Society of the Irish Motor Industry and the Irish Petrol Retailers' Association. The report of this review now shows that the order had been reasonably effective. Although the number of independent outlets continued to decrease in 1974, the number of company-owned outlets which had previously been increasing also decreased. In addition while sales by independents continued to increase sales through company-owned outlets, which had increased fairly substantially in previous years, fell in 1974. The commission are satisfied, therefore, that the prohibition is succeeding in its object of curtailing the growth in the number of company-owned stations and in the oil companies' share of retail sales. The commission recognise that even if the [309] prohibition were removed the present state of uncertainity in the oil industry would make it unlikely that the oil companies would try to increase the number of company-owned outlets. They feel, however, that this position would not hold good in the event of a return to normal conditions in the oil industry and they consider, therefore, that the prohibition should be extended for a further period.

The oil companies indicated that they would not welcome any continuation of the prohibition but in the present state of the industry they would not be opposed to an extension for a further two years. The petrol retailers, however, wanted an extension for as long as possible. Taking all the circumstances into account the commission recommended that the extension should be for a period of three years.

The report also states that a number of oil companies asked that the “one-mile limit” for the replacement of company-owned stations which were closed in the circumstances defined in the original order should be increased or removed altogether. The purpose of the exceptions was to facilitate a company to retain its business in a particular area which it could lose because of traffic diversion resulting from the construction of a new road near its existing outlet or because of the compulsory acquisition of its existing outlet by a local authority. If there was no limit the exceptions might be abused but bearing in mind the difficulty of acquiring sites within a mile radius and of obtaining planning permission the commission recommended that the limit be increased from one to three miles. It might be argued that the “one mile limit” in the original order was sufficient to meet the requirements of the oil companies.

Nevertheless, for the reasons stated by the commission and in fairness to the oil companies, the Minister feels that an extension of the limit to three miles is reasonable.

The Minister in making the order gives effect to the commission's recommendations relating both to the extension of the period of prohibition and the “one-mile limit”.

[310] The commission pointed out in their report that matters which bore indirectly on the operation of the 1972 order were raised during the hearings. These included the effect of increasing costs, petrol outlets in new suburbs or satellite towns, the effect of various types of agreements and the significance of promotional schemes and hours of trading. The terms of reference of the review precluded the commission from investigating these matters in detail but they consider that they warrant more extensive investigation. They recommended that they should review these matters before the new extended period of prohibition expires. The Minister agrees that the matters should be examined and he intends to ask the commission to carry out the necessary review as soon as practicable.

It has been suggested that the prohibition on the opening of new company-owned outlets could preclude new retail chains from opening up for business in Ireland in competition with the major oil companies who are already dominant in the market. I accept that the prohibition could prevent a new competitor from entering the market, but I would point out that the Minister has the power to revoke or amend the order and would be prepared to do this at any time that it appeared desirable in the interests of promoting competition.

The Restrictive Practices Act, 1972, provides that orders of this kind shall not have effect unless they are confirmed by Act of the Oireachtas. The Bill now before the Seanad is the confirming Bill which is necessary to give the force of law to the order concerned. With a Bill of this kind the order which it is proposed to confirm may not be amended by the Oireachtas but must be accepted or rejected as it stands. The matters with which the order deals have been the subject of detailed special review by the Restrictive Practices Commission and their report, which was presented to this House, sets out the arguments in favour of adopting the provisions embodied in the Order.

The Bill has already been supported in the Dáil and I can recommend it to the Seanad without reservation.

[311] Mr. Hanafin: We welcome this Bill because we see the need for it. There are just two matters involved. First, the Minister wants to extend the order for three years and, secondly, he wants to extend the one-mile limit to three miles. One can see the necessity for and the desirability of doing this. It makes good business commonsense. We are all aware of the numerous retail stations, within 100 yards of each other, coming into major cities and towns. It would be a common-sense business practice to have a greater distance between these stations.

If I may say something about oil companies on this Bill, my opinion on oil companies is that quite a number of them have been dishonest in their dealings with the retailers over a number of years. People established in the business felt they were being made a splendid offer by the oil companies in tying themselves up in a solus deal for a number of years. The money appeared to be attractive at the time and they felt that, if at the end of five years they were not satisfied with the service, they had the option of changing to another oil company. What happened was they found they lost their freedom once they had signed. They were subject to all sorts of conditions that were not pointed out in the manner in which they should have been pointed out in the first stage when the agreement was made. At the end of the five years they found, when they wanted to change to another company, the other companies were very reluctant to deal with them, not because of any feeling for the other oil company but because of a business arrangement: “You stay out of our patch, and we will stay out of yours.” The individual retailer was denied his liberty and was restricted in his business in many ways. Because of that, I have no hesitation in describing major oil companies of that kind as completely dishonest in their dealings.

I may be taking liberties in speaking about oil companies in connection with this Bill, but one could go on for a long time about the way Governments and the Revenue people particularly were fooled by the activities of the oil companies. When bringing oil to the refinery here they were able, as a result of [312] charging themselves or a subsidary company excessive prices for crude oil, to show a very small profit from which there was little revenue gain. The subsidiary or associate company formed for the purpose of transport, which charged excessive prices for carriage, was registered in the Bahamas or some such place where taxation was very low. The revenue gain was limited here. Whereas one cannot always have sympathy with the Revenue, one can have a certain amount of sympathy in cases like this because this was a deliberate, dishonest, premeditated undertaking at the very beginning for the purpose of denying the Revenue Commissioners the revenue to which they were entitled. Other than that we welcome the Bill.

Dr. West: I should like briefly to support what Senator Hanafin said. I welcome this Bill. I think it is one very small indication of the fact that we recognise our status as a nation and have got to circumscribe the operations of some of these major commercial organisations which operate to the detriment of the small man. We have had many illustrations recently highlighted in the world Press and the media generally of the operations of multi-national corporations. Some of the corporations we are discussing in this Bill have budgets just as large as the budget of this state. They exert power. They have influence and it is up to a nation like ours to take action to protect its own rights and, in particular, protect the rights of the smaller traders, in this case the petrol retailers. Senator Hanafin has given illustrations. One could add to them. The operations of these companies are, to say the least of it, extremely shady, particularly when it comes to matters in relation to Revenue and taxation. In any problems of this type the multinational companies can obtain the best lawyers, the best tax experts, the best advice at getting round the laws they may come up against from country to country. It is important that we clearly determine what our own interests are. In this case it was a good decision to have a commission. Even though this is a very small matter, I certainly support the confirmation of this order. I hope it is an indication that [313] this Government are and successive Governments will be prepared, when the national interest so demands, to take a firm line in dealing with multi-national corporations and other bodies of this type, to protect our own national interests and the interests of the smaller people involved in commercial enterprises.

Mr. Russell: I should just like to say a few brief words. First of all, I welcome the Bill. It provides mainly for an extension of the previous Bill which put some control on the expansion of the multinational companies vis-á-vis the independent outlets. I do not think the encouraging picture painted by the Parliamentary Secretary can be taken completely at its face value. While it is true the number of petrol stations owned by companies has been either going down or remaining static and the independents are, at least, holding their own. What counts in the long run is the total amount of petrol sold by the companies acting for the multinationals and by the independent retailers.

Some of the figures given during the debate in the other House would seem to indicate, certainly in the case of rural petrol stations, that some of the small petrol stations must be nearly at the economic stage. That might be all right so long as they get some kind of a living out of it but, unfortunately, it is not the owners of the petrol stations who decide what is an economic outlet; it is the people who supply them. That does not apply only to petrol and oil companies; it applies generally right across the board where commercial distribution is concerned. Obviously it is more economic to distribute a large quantity of any given article than a small quantity. I see some danger in that area and this is something the Minister should keep in mind.

I understand we cannot amend this Bill. We must accept it in toto or reject it. I do not think there would be any intention of rejecting the Bill and all we can do at this stage is offer certain views to the Parliamentary Secretary which, I hope, will be taken into consideration in regard to future legislation.

A further change in the Bill is the extension giving the right to the companies [314] or any petrol distributor, where his site is required by a local authority for road widening or some other purpose, to relocate within three miles of the old site. I understand that was recommended by the commission and I presume not without exhaustive examination of all the factors involved. I do not know whether the Parliamentary Secretary can deal with this point but while relocation seems fair and just on the face of it, if the relocation were to bring a company-owned petrol station right alongside its independent and weaker neighbour then there should be some method of prohibiting such a transfer, even if it meant some degree be compensation. Of course, there would be compensation involved anyway if a local authority acquired the land on which a petrol station rested by compulsory acquisition.

In a case like that the company-owned petrol station should not be allowed to relocate within the three-mile radius permitted under this Bill. He should be reasonably compensated and let retire from business. It is not unusual that a shopkeeper who happens to be in the way of a proposed building development is taken over under a compulsory purchase price order and receives adequate compensation. In fact, his compensation is not large enough to allow him to start up in business again. His title to the property may be a tenuous one. He may only have a monthly tenancy or some short title of very little value. His only value is his goodwill which is something very difficult to assess in present-day conditions.

I do not see why the same rule should not apply in the case of company-owned petrol stations if for one reason or another they have to give way to development for the public good. They should be reasonably compensated and not allowed to relocate in competition with an independent. The desire to restrict the expansion of the company-owned petrol station, while in itself a good one, may not be achieved by the terms of this Bill or its predecessor. It might be better to put an overall limitation on the number of company-owned petrol stations rather than try to restrict them in various areas.

[315] There is another factor which mitigates against the independent retailer. While everything in the garden may appear to be rosy so long as this limited control is exercised on the multinational companies, extra enticements, like trading stamps, are a popular form of inducement used by company-owned petrol stations. I am absolutely opposed to trading stamps particularly in this case where very powerful groups can use their assets or their resources, within the terms of this Bill or any legislation, to put the small man out of business. Why should any car or truck owner who pulls up alongside two petrol stations — one an independent, perhaps family owned and the owner solely dependent on his or her income from this station, and the other a magnificent company-owned petrol station giving away stamps — be offered an inducement? Before the recent petrol crisis you would get 60 or 70 stamps for £1 of petrol. In fact, there seemed to be no limit. If the oil crisis had not come I do not know where the ceiling would be in this give-away campaign between the large petrol companies.

In saying this, I do not want to be taken as one of those joining in the popular exercise of the day of tilting at multinationals or large corporations. I think they have a very useful and important part to play in the development of our economy. If we think for a few minutes we will find it very hard to say that we should have no multinationals or no corporations establishing outlets or subsidiaries here.

Mr. Killeen in an encouraging speech in Cork yesterday paid tribute to the large multinational companies not only in regard to the immense resources they have in terms of finance but also in regard to the immense resources they have in technical knowledge, experience and know-how which no small company could hope to have available. While we want to restrict the multinational companies and ensure justice and fair play for the small man — the common desire in this country down through the years — we should recognise the fact that the big corporations and the multinationals have an important part to play.

[316] It might be too fanciful to think that, in the same way as a very popular beverage in this country, the distribution of petrol might be left completely to independents or small groups of independents and that the multinationals would confine themselves to the importation and distribution from their outlets at the ports. Apart from that the Bill is welcome. It is obviously necessary. The Restrictive Practices Commission and the Petrol Retailers' Association should encourage us to give it a further term of three years.

Mr. M.D. Higgins: I should like to join with those Senators who welcomed the Bill. However, I do not share the confidence expressed by Senator Russell in the multinational technology and I have been frequently guilty of tilting at multinationals. I am glad the Parliamentary Secretary put into this section some control of the multinationals' activities. They have tremendous resources, as has been pointed out recently by a number of people. Our experience of the use of these resources and tremendous technological power has been that they have been to the detriment of our country. Indeed countries with the same kind of social structure have most of the time suffered.

The original intention in bringing in an order like this was to curb the activities of the multinational companies in reducing the number of outlets and insisting on a certain kind of control of activities which would not be in the social interest. We should hope that, in future, we will have much stronger control of such activities.

I agree with what Senator Russell said about extra enticement and stamps being used by these large companies. They have been used in a very vulgar manner here and they also place smaller dealers at a disadvantage. When I reflect on the outlets owned by the companies here, from a purely ideological or environmental perspective, we have managed to accommodate the worst and most vulgar exhibitionism of multinational oil companies displaying large hoardings, which they are not allowed to do in other countries, advertising commodities which are fetish items and by no means necessary. [317] For example, the average individual pulling up to a company station would not only be forced to get petrol from this station but would be forced as well to submit the children, who might be in his car, to a barrage of publicity in favour of items which are not necessary and which are corrupting in the sense of real need.

When we come to consider the distribution of petrol, which is related to the consumption of energy in our society, our criteria should not be simply economic criteria. It is not necessary at this stage to fall over backwards in favour of the argument that it is more economical to distribute through the large outlets. If there is a lesson for us in 1975 it is that the criteria should not be merely economic but should be social and environmental criteria.

I welcome the order, if it contains variation and variability and if it allows a man to run a station and add on to it aspects which he sees himself might sustain a traveller. The effect of the existing order was not only to control the market in a particular way but to insist on a dreary, monotonous, almost coercive type of advertising as well. This order enables a station to be established where another station was removed because of a compulsory purchase order. I should like to feel that it would not be possible to build a station of any kind unless environmental criteria had been satisfied. The ones we have at present are most vulgarly placed.

The effect of the order in retaining as many of the outlets as possible in private hands and in putting a ceiling on the number owned by the multi-national companies means that we may be able to insist nationally on the kind of criteria I mentioned. I do not believe that we could effectively persuade multinationals to adhere to our environmental criteria. Within the next ten years, in the structure of most of our consumer patterns, we will have to seriously consider the force of our legislation nationally, even at the level of the European Community, faced with the advertising and trading practices of the multinational corporations.

Writers, such as Toffler, when commenting [318] on the new role which might be facing multinationals, introduced the extremely spurious argument that multinationals have now become so big that only they have the technique and technology and power to save us from the many ecological effects which are referred to as happening here. Such an argument is like asking something that was moving in one direction suddenly to develop an automatic response to move in the opposite direction. It is in the interests of the multinationals to be efficient in an economic sense. It is not in our interest to be merely efficient in an economic sense. It is in fact our experience that trying to be efficient in an economic sense and firing away many wise criteria of an environmental and social kind has been putting us even further at risk. To try to develop even the slightest orientation towards making things easier for the oil companies would be extremely dangerous.

This Bill is coming at a time when growth economics has been questioned by every serious economist. We will have to feed back this new thinking concerning the kind of variation we need in consumer patterns, and we will have to regard orders like this as very useful and as a beginning of what will be much tighter legislation in the future concerning the whole nature of the structure of the consumption of petrol in our country.

Mr. Markey: It may be desirable to maintain the number of independent petrol outlets as a bulwark against company-owned outlets, which was the purpose of the order in 1972. It ignored the facts of life, particularly in the words of the Parliamentary Secretary, that notwithstanding the existence of that order the number of independent outlets continued to decrease even if the number of company-owned outlets has not increased. We are up against the hard lesson of economic dictates in petrol-selling individual outlets. It is surprising to find that the average number of gallons of petrol which go through an average independent outlet in a year gives what I would regard as a less than adequate return to any person willing to set up in business as an independent petrol outlet. The existence of the company-owned outlets has [319] over the years made it all the more difficult for the independent person to continue in business.

If it is to be all the more difficult for small independent retailers in business — and it will be because the overheads will be just as high and difficult to overcome as in any small business, and if population trends continue with new urban developments and large numbers of houses going up on the outskirts of our towns — we will find a situation where somebody will have to go in and carry on the business of petrol retailing. We are inclined to make monsters out of the multinational oil companies. I think the opposite of them. They have contributed a certain amount of good, they have given substantial employment and a good service right from the beginning. Somebody has to go into the business in the future in the face of hard economic facts. If as of now it is quite difficult for a small individual business to carry on a viable existence through selling petrol, it will be more difficult in the future.

There will be a public need, in the sense that urban areas will have a definite necessity for petrol retail outlets. I cannot foresee anybody other than the oil companies coming in and filling that vacuum in the future. That is not to say that there have not been abuses in the past. Of course there have been abuses as there are in every aspect of business. We have all heard of cases where even the managers of tied petrol outlets — the outlets that were tied to the major oil companies — went through possibly a mini-crucifixion in the early years of his existence as manager, that pressures were put on to achieve certain targets. It made life very difficult for him indeed. We know that these pressures by the oil companies made it necessary for individual outlets to try to attract business in the face of the major oil companies. These are all aspects of every-day life in every category of business nowadays and we must live with it.

Certainly nobody in 1972 could have envisaged the situation which occurred in the autumn of 1973. All of us had taken for granted that there would be a continuous supply of petrol for our [320] motor cars, but then we found ourselves in the horrible situation in October-November, 1973, where this supply became non-existent. That brought lessons to us all and probably brought out the best and worst in every one of us. We all made friends and enemies with various petrol outlet owners and retailers and probably fell out with many of them through just not getting service.

Of course, there was one abuse there where the oil companies got to the stage where the petrol supply became so scarce that they had to ration it to whom they could supply it to. Naturally, they gave preference and priority to their own tied outlets. That, in some people's eyes, could be an abuse of their position, but in looking at it, one must take regard of the fact that perhaps we are fortunate in that the oil companies had already set up these outlets, that they could give a guaranteed supply in those difficult times.

There certainly will be a need in future, if off-shore oil becomes available, and some companies have said so, within our shores to distribute and retail oil, and we may well have to ease the restrictions imposed by this order. That is something that we should all like to think would happen. The two main points I should like to make are that I do not regard the outcome from this as being as monstrous as some people depict it. I do not look upon the business of selling petrol as something in which environmental and social aspects and so on should have priority, as Senator Higgins seemed to indicate in his speech. People are in that business to make money, the same as an individual trader is in it to make money. They have got to make sure they cover their overheads and get a satisfactory profit before they start thinking in terms of environmental or social aspects.

There is a public need for outlets in future years and I can see nobody but the oil companies, perhaps, being in a position to supply that need. That is why I foresee the provision that this order certainly will have to be eased much sooner than we anticipate, even as of now, because if the number of independent outlets decrease as they have been doing in 1974 when this order [321] was in existence, we cannot see this trend reversed.

While I welcome this as a bid in the early stages of 1972-73 to offset abuses which were then occurring, in the light of the circumstances and the economic facts which confront every outlet since the oil scarcity of late 1973, we may well have to have another look at this order much earlier than anticipated.

Miss Walsh: I welcome the Bill. My only complaint is that it is long overdue. I welcome it for a number of reasons, particularly because it favours the small petrol filling station which, like all small businesses, due to multinational companies and the age of the supermarkets and super everything, including the super rat, have become submerged in this super-duper world of today.

I agree with much of the remarks of Senator Hanafin in his opening speech with regard to the malpractices and the activities of some of the multinational oil companies. I am one who does not favour this super-duper type business. Due cognisance must be taken of the fact that the small farmer, the small businessman, the small oil retailer or whatever he is. Society owes him a lot. He has a place in society and he also has a place in the business world because when the super-duper oil companies with their petrol filling stations are closed at weekends and on bank holiday weekends the tourists are very often pleased to go to one of these small petrol filling stations.

I do not know what the reason for it was, but for a number of years petrol filling stations grew up like daisies all over the country. I have my own reservations on how this came about. I do not wish to express them now but I know that there was a certain amount of malpractice in the initiation of many of these stations. The Planning Act was introduced and with it came the need for planning permission, and with it came planning refusals, string-pulling and so on. In spite of all this, petrol filling stations sprang up, as I say, like daisies all over the country and to the detriment of each other because while competition is the life of trade, such a thing is overflogging an already tired horse. Too much of anything is good [322] for nothing. There is quite a proliferation of filling stations in Ireland and we could well do with fewer of them or at least leave the status quo for the moment. For that reason, I favour the introduction of this Bill.

Mr. Daly: As a representative of the motor retail section of the Society of the Irish Motor Industry I should like to welcome this Bill. It is an extension of the 1972 order for another three years. It will be reviewed again then. The submissions made by the retail section of the Society of the Irish Motor Industry have been accepted.

There were one or two points which were raised by other Senators. Senator Markey referred to the decline in independent stations. For that reason we wish to keep our options open to the companies. The real reason for the decline is that, as Senator Walsh said, these stations grew up like daisies or mushrooms. There were too many of them and a good many of them were uneconomic and just died because they were not viable.

Senator Russell put his finger on the nub of the whole thing when he spoke about Green Shield stamps, because Green Shield stamps in my view are the greatest fraud that this country has seen since Shanahan stamps, and we should have learned enough from that at the time. The problem with Green Shield stamps in regard to petrol, as against groceries in supermarkets or any other form of business where they are given, is that supermarkets and so on can adjust their prices to compensate the cost of the loss on the Green Shield stamps, but on petrol there is a profit that cannot be altered and when a retailer gives Green Shield stamps he is giving away his profit. Fair enough. If a person is foolish enough to give profits away it is his own business. However, as a result of the collaboration between the petrol companies and Green Shield stamps, there is the danger that we will have a restrictive practice. I should like the Parliamentary Secretary to take note of this. When a dealer gets Green Shield stamps he gets a franchise and nobody else in that area will get them. The petrol companies have taken up most of the franchise and the petrol dealer is losing the [323] business because, even if he wanted to, he still could not give Green Shield stamps. This is legalised blackmail. The Green Shield company know they have the advantage so long as everybody does not have the stamps. That is all I would ask the Parliamentary Secretary to do, that is, to make them available to everybody and as a result they will lose their value. If they can be obtained in every station, business will not be attracted to any particular station and the petrol companies will drop them. One of the petrol companies are now giving them for central heating oil and as a result they are getting the major part of the business.

When these submissions were made to the former Minister for Industry and Commerce he agreed with them and decided to make an order preventing this practice. However, a month after this, the then Parliamentary Secretary to the Minister for Industry and Commerce opened a big gift store for the Green Shield company, so we can judge the sincerity of that decision. I would appeal to the Parliamentary Secretary that if Green Shield stamps are to continue he should lift the restriction and make the stamps available to everybody. Then all will be equal. As a petrol retailer, I welcome the extension of this Bill and I hope it will be reviewed in three years' time.

Parliamentary Secretary to the Minister for Industry and Commerce (Mr. Bruton): I thank the Seanad for the very generous welcome given to this piece of legislation and for the thoughtful contributions of Senators. I shall deal seriatim with the points made by Senators and if any Senator feels I have not dealt adequately with his or her remarks I will return to those points.

Senators Hanafin and West were concerned about the revenue avoidance in which they thought petrol companies were or had been involved. This is a matter for the Minister for Finance rather than for the Minister for Industry and Commerce and myself. I will draw the Minister's attention to what the Senators said.

Senator Russell referred to the relative prosperity of company-owned [324] stations and dealer-owned stations. I should like to put the matter straight in this regard. The position is, that in 1973 86 million gallons were distributed through company-owned stations. By 1974, as a result of the operation of this restriction, the number of gallons dis-distributed through company-owned stations had fallen to 82 million gallons. On the other hand, in 1973, 140 million gallons were distributed through dealer-owned stations. In 1974 that amount had risen to 147 million. Therefore, the trend has been in the opposite direction in respect of the dealer-owned stations as against that of the company-owned stations.

Senator Russell also referred to the relative competitiveness of dealer-owned stations. I am glad to reply that there has been an improvement, perhaps by virtue of that order as well. In 1973, the average throughput of dealer-owned stations was 36 million gallons. This amount has risen to 38 million gallons in 1974, whereas, the average throughput of company-owned stations was 168 million gallons in 1973. While that figure is much larger than the average throughput of dealer-owned stations, it fell in 1974 to 162 million gallons.

Senator Russell mentioned the possibility that, with the extension of the permission to replace a station which is permanently closed because of road-widening or compulsory purchase to three miles of the location of the closed station by a company, it might result in some cases in such a company-owned station being located beside an existing dealer-owned station. So far, there have not been any complaints in this matter but, of course, the position to date has been that the station could only be replaced within a mile of the former location. On foot of what Senator Russell has said, I will ask the Examiner of Restrictive Practices to keep an eye on possible difficulties arising in this regard.

Senator Russell called for an overall ban on new company-owned retail outlets. That is exactly what this order sets out to do. Senator Russell and other Senators referred to trading stamps. I should like to say, in this context, that the consumer protection legislation which is being prepared in the Department [325] will deal, inter alia, with trading stamps. The object of that legislation will be to control the use of such trading stamps rather than ban them altogether. The Minister has dealt in detail with the reasons for this approach rather than the total banning of them. We must all recognise that people are employed in the firms engaged in the trading stamp business and also, in many cases, the consumer has an option of going to a place where trading stamps are given. To restrict the choice of the consumer in that matter by outlawing trading stamps might have a detrimental effect.

Senator Daly made a very valuable point in relation to what he described as a restrictive practice in the allocation of the franchise in particular areas to one individual station. I would draw the Senator's attention, and that of the Seanad, to the fact that in the Restrictive Practices Commission's Report they said that the question of certain promotional schemes was among a number of matters drawn to their attention in the course of the inquiry but did not come within the strict terms of reference of the inquiry. The commission suggested that they might, within the three years following on the extension of the order by the Seanad, carry out a further inquiry into the operation of such promotional schemes. I had already decided to ask them to carry out this further inquiry as soon as possible and not just within the three years' period. In particular, I will draw their attention to the points made by Senator Daly in carrying out that aspect of this further inquiry which relates to promotional schemes.

Senator M.D. Higgins referred to environmental criteria in the location of petrol stations. I think “vulgarity” was the word he used in respect of some of the locations and the hoardings associated with such stations. As I am sure he is aware, this comes within the planning legislation rather than within the ambit of the Minister for Industry and Commerce. Under the planning law it is open to people to make objections on amenity grounds to their planning authority and, if necessary, to the Minister for Local Government in relation to such matters. The Senator referred in general to advertising practices. [326] This is a matter which, again, will be the subject of consumer protection legislation which we are working on. Some of the points he made are valuable in that context.

Senator Markey expressed concern in an opposite direction to many Senators when he suggested a situation might arise in which there might not be anybody to distribute petrol if it were not for the continued operation of multi-national stations. The figures I have already quoted which show a relative improvement in the position of independent retailers, indicate that they are given a fair chance, able to meet the challenge, and are able to increase both the total volume of their throughput and the average throughput per station. Therefore I am not as concerned as he would be on this point.

There is not much danger in Ireland of lack of retail outlets from the public point of view. We have more retail outlets for petrol per car than most countries in Europe. The spectre of insufficient petrol outlets is one which is well over the horizon. These are the main points made by Senators.

There was one other point made which referred to independent retailers possibly being deprived of supply by the company on the ground that their outlet was uneconomic from the company's point of view. The Examiner of Restrictive Practices has secured agreement from all the oil companies that they will not, without informing him well in advance, attempt to discontinue supply to any independent retailer. This provision will allow him to fully investigate and, if necessary, ensure a decision on a proposal for the discontinuance of supply.

Senators roamed far and wide in this debate. I have not followed every point raised but I would like to conclude with my own general observation. In the very short time I have been dealing with this field I have been very impressed with the useful nature of the machinery we have for the control of restrictive practices. Schedule 3 of the Restrictive Practices Act, 1972, indicates in great detail the type of restrictive practices which can come within the ambit of the control procedures set up in tha [327] Act, namely, the Examiner of Restrictive Practices and the Restrictive Practices Commission. The whole philosophy therein is one of preserving competition. Senators will agree that the best way of ensuring that undue increases in prices do not take place is to have healthy competition between as many providers of those services as possible. That, rather than blanket systems of control, is the best long-run means of controlling inflation. I feel that our machinery, in the form of the Restrictive Practices Commission and the Examiner of Restrictive Practices, is very useful and I hope it can be used, as it has been in the past, to an even greater extent in the future in identifying and subsequently rooting out any restrictive practices which interfere with competition and thereby contribute to excessive prices being charged at retail level to the consumer.

In conclusion I thank Senators for their welcome for this Bill.

Question put and agreed to.

Bill put through Committee, reported without amendment, received for final consideration and passed.