In the Seanad on 29 June 2005, speaking on a Fianna Fáil private members motion on consumer affairs , I said:

I will speak only about the groceries order because it is something I know about.

Prices are higher in Ireland in similar areas because sufficient competition does not exist. Taking the example of what happened in the airline business ten or 15 years ago, we used to pay £239, if I remember correctly, to fly to London. Two airlines could be used and both charged the same price, agreed between them. Competition was introduced, and a person can now travel to the same destination for a far lower price.

The decision on the groceries order is a difficult one that I know will not be popular no matter which way it is decided. With the decision being made, the Fianna Fáil and Government spokesman talks about urging caution, even after all these years of debate. On the other side, Fine Gael puts down an amendment which does not refer to the groceries order. It is possible that people do not want to make decisions. The Minister will have to make a decision and he has done the right thing in putting a deadline on making the decision, which I see is only four or five weeks away at the end of July.

When I started in business in 1960 no groceries order existed. I wanted to compete and I had the choice of either taking out a £10,000 advertisement in the Irish Independent or selling 100,000 items at 10p less than cost price. I decided that the latter was a much better way to do business. It was more in the interest of the consumer, who got something at a lower price. I sold butter, sugar or whatever the popular item in those days was at 10p below cost. This aggravated the competitors but customers loved it. This strategy was not advertised because word of mouth was a better advertisement. Below-cost selling is a benefit to the consumer.

Legislation was then introduced which prohibited such a sales strategy because it was deemed not to be fair on others. In those days, a buyer would ask a supplier for a lower price on bulk orders. However, more legislation was introduced prohibiting the bullying of suppliers. The supplier was then not expected to give the buyer a lower price because it was not fair on the suppliers.

We have made illegal things that actually created lower prices. Disadvantages did exist, and competitors, who may have been used to meeting each other to fix prices, felt such practices were unfair. In those days, a concept called retail price maintenance existed. In the 1950s legislation was introduced to eliminate this, with the result of more competition, lower prices becoming evident and customers being able to decide what they wanted to do.

An alternative to the selling of materials below cost is to give customers a treat, such as a cup of coffee, a glass of wine, a massage or a lift home, for example. One would not get such things in a supermarket of course. However, giving such things is legal while selling below cost price is not. This is not logical. It is necessary to let market forces play their role. This is the objective of today?s debate, along with getting lower prices.

Disadvantages do exist. In Britain, when competition of that magnitude came about, 40% of towns and villages were without a local shop. The Minister would have to take this into account.

I have an answer to the below-cost selling rule. It should be abolished, but in doing so the Minister should introduce a stipulation that no limits can be placed on the amount that somebody can buy.

I remember years ago I sold Zip firelighters at approximately 6p below cost. People came from all around to buy these. My competitor from up the street came in with wheelbarrows to load up ten cases of Zip firelighters. It cost my business money to sell them to the competitor. My business was unwilling to put a restriction on it, so the competitor told his friends who in turn bought more firelighters until the stock was sold out in a small amount of time. A restriction might have stipulated that only two boxes of firelighters be sold to every customer.

If the groceries order were abolished and full competition was allowed, the big nasty supermarkets would be allowed to undercut everybody else, but they should not be allowed to place a limit on what people can buy. A local competitor can then go to the local supermarket, irrespective of whether it is a big international supermarket, and buy all the stock because it is being sold below cost. This is one way around below-cost selling that suits both the customers and smaller traders, but does not suit the big nasty supermarket selling below cost.

My company may have been big and nasty because it did sell below cost. I would still sell below cost. This below-cost legislation is unfair as it does not apply to companies that are not based in Ireland. If a company?s headquarters is in Düsseldorf or London, the company can do as it likes. The Government can write to the company asking for invoices but a reply will not be forthcoming. A few years ago, the Irish Independent carried a story of a large chain in Ireland that was in breach of Irish legislation, but the Irish operator did not realise this because it happened in Britain. Legislation in Ireland stipulates that suppliers should not be squeezed for lower prices because the practice is not fair, but when the chain undertook a takeover it invoiced all its suppliers, requesting money to cover costs. This came about because such practice was not illegal in Britain. Although it was illegal here, the company did not break the law within the State.

These are a few reasons that if competition is to exist, it must be encouraged. Benefits will come with such competition. Disadvantages will also come with such competition.

I have just returned from Hungary and I was recently at a grocery convention in the Czech Republic. Last year I spoke at an event in Thailand. In these countries, practically none of the grocery outlets is owned locally. All of them are big international companies. If that type of business in Ireland is desired, it will come about and we will have lower prices. Ireland will not be the most expensive country but the operators we deal with will not be based here. The Minister must make the decision. The groceries order should be abolished because competition will be created, as the grocery retailer will negotiate with the supplier, which will be good for customers. The voice of the customer has not been heard in this area clearly enough. While that would be beneficial, vested interests will howl about the disadvantages of abolishing the order, which is understandable.

The cap on the size of grocery stores is not mentioned in the motion. The limit on the size of stores is 3,000 sq. m. outside Dublin and 3,500 sq. m. in Dublin. The legislation probably makes sense because in Britain the large stores have soaked up the grocery business in small towns. A choice must be made. If the Government wants to encourage lower prices in the grocery sector, it must abolish the groceries order. I have outlined a number of suggestions regarding how that can be done while protecting the smaller trader. It is the correct course of action because it will restrict international operators from breaking Irish law because they avoid breaking the law by buying abroad. The Minister has four weeks to make a decision. He will receive a report then and I hope he does not heed the urgings to be cautious after all these years. He should make a decision and put the issue to bed.