Enterprise Minister Bruton rejects below-cost amendments to Bill

The Enterprise Minister Richard Bruton has rejected a proposed amendment to the forthcoming Consumer Protection and Competition Bill which would have re-introduced a ban on below-cost sales.

He was responding at the Bill’s Committee stage to a number of amendments tabled by opposition TDs such as Dara Calleary (FF) and Peadar Tobin (SF).

Dara Calleary put forward an amendment that, “The Minister, having regard to subsection (1) may, from time-to-time, give a direction that a retailer shall not sell grocery goods at a price that is less than the net invoice price of the goods”.

He told the chamber, “Below-cost selling of alcohol is rampant, I suggest. Alcohol products are being used as magnets to draw in customers to large supermarkets. The manner in which alcohol is being used, its availability and the lack of regulation in the way in which it is being sold is causing so many other social consequences.
?“The Minister of State, Deputy Alex White, is supposed to be working on a strategy around alcohol and alcohol abuse but one of the key problems is this sector. We have a chance here to do something about alcohol as well as looking at the supplier relationship and the abuse of that relationship.”

During the debate the Meath West Sinn Fein TD Peadar Tobin stated, “I have been at a number of Committee meetings where the cross-party general view was that with regard to alcohol and other products, below-cost selling was leading to negative outputs for society in general and for suppliers. Here we have an opportunity to resolve that and I urge the Minister to resolve it once and for all.”

But Minister Bruton rejected the proposed amendment, pointing out that since the abolition of the Groceries Order in 2006 there was “no statutory basis” for him, as Minister for Jobs, Enterprise and Innovation, “to make a minimum pricing order in any sector”.

He continued, “The use of aggressive pricing strategies in any business is a legitimate marketing tool and the normal outcome of the competitive process. Low-cost and below-cost selling by a retailer is not in itself an offence unless it involves an abuse of a dominant position”.

“A determination on whether a retailer is abusing a dominant marketplace position would necessitate a comprehensive investigation by the Competition Authority, the independent statutory body responsible for enforcing competition law in the State.”

The Minister rejected the amendment stating, “I do not accept that there are grounds for the reintroduction of such a restrictive measure; therefore, I am not in a position to accept the proposed amendments. Deputy Dara Calleary gave alcohol as an example. However, as he indicated, the Department of Health is developing proposals in that area and it is doing so not as a matter of market operation but as a matter of public health policy”.