Supermarket concentration and independent grocers
The Minister cited 1977 statistics showing supermarkets accounted for about 48% of grocery turnover, but said official figures did not disclose individual market shares. In response to concerns about multinational dominance, independent-trader closures and job losses, he pointed to merger controls and planning rules, arguing there was no evidence of concerted pricing and that planning rules had blocked half of proposed supermarket developments. The Chair repeatedly curtailed extended policy debate.
asked the Minister for Industry, Trade, Commerce and Tourism the estimated market share of the food distribution system in the country controlled by multinationals; the percentage market share controlled by the four major multiples operating in the country; the estimated number of independent retail grocers now in operation in the country; and the estimated number of people employed in the grocery retail trade generally.
Comment on this
The most recent official statistics published by the Central Statistics Office for this sector, which I regret relate to 1977, show that supermarket outlets, defined as self-service establishments having three or more check-out points, accounted for about 48 per cent of the total turnover; the remainder being accounted for by independent and symbol group stores. The published returns do not give individual market shares for reasons of confidentiality nor is any distinction made as between Irish and non-Irish multiple supermarket groups. It should be noted however that two of the top four supermarket groups operating in this country are Irish owned.
The total number of persons engaged in the retail grocery sector was estimated to be 24,634 of which 18,598, or over 75 per cent, were accounted for by independent or non-supermarket establishments, which numbered 7,305.
Comment on this
Does the Minister agree it is now estimated that four major multinationals control 80 per cent of all retail grocery sales in Dublin and 50 per cent of all country operations? Does he not agree that the time has been reached when some measures must be taken to contain and to control the spread of multinationals which are having a detrimental effect on independent retail traders?
Comment on this
Powers exist under the Mergers and Monopolies Act to deal with problems which might arise because of the creation of monopolies. However, in the case of these retail outlets it must be said the four major groups control a substantial share of the business, that they are in a very active competition with one another, but there is no evidence that they are engaging in concerted pricing practices to the detriment of the consumer.
Comment on this
Is the Minister aware that his predecessor, Deputy Cluskey, indicated to the House that legislation to control the spread of multinationals was almost ready? Further, is he aware that a previous Minister, Deputy Kelly, had in mind proposing legislation — this was the way he put it. In fact, the Minister's party in 1981 put forward a Private Members' Bill for that purpose. Does he intend to continue on the lines suggested by his predecessors and his party?
Comment on this
I am aware of the points made by the Deputy. I have studied this matter carefully. I have noted the controls introduced under the Planning Acts in August 1983 by a previous Minister for the Environment, Deputy Burke, where a large number of factors now must be taken into account by the planning authorities and the Planning Appeals Board, including the effect on local retailers, the availability of retail outlets to old and disabled people who might not be able to travel long distances to supermarkets and all the other social considerations the Deputy may have in mind. All of these must be taken into account by the democratically elected planning authority and, subsequently if there is disagreement, by the Planning Appeals Board. I am anxious to see how that legislation works in practice. I had a discussion with representatives of IADT and RGDATA yesterday on this subject and I have asked them for their assessment as to how the existing legislation is working. I hope to have concrete discussions with them on individual cases where they feel the legislation may not have worked adequately. I would be reluctant to promote new legislation with possibly unforeseen effects until I was fully satisfied the existing legislation was not working reasonably. I am actively considering the matter. I have had a meeting in the past 24 hours with representatives of the small retailers and I have also met the supermarket groups.
Comment on this
Has the Minister any information as to what steps, if any, were taken by any of his predecessors, apart from those mentioned by Deputy Flynn, namely, Deputy Kelly and Deputy Cluskey, to control the matter complained of in this instance? Will the Minister not agree that any attempt to deal with the situation through the planning process would be unlikely to be adequate? Will he agree the situation has reached critical proportions and that it requires attention beyond the area of the planning process?
Comment on this
Both my predecessors, Deputy Kelly and Deputy Cluskey, did a considerable amount of work examining various legislative possibilities. I do not necessarily agree with the second and the third parts of the Deputy's question. There are inherent dangers in getting involved in over-heavy regulation of what should be a competitive trade in the interests of the consumer. However, if I thought the development in the trade was leading to a monopolistic situation to the exploitation of the consumer or the destruction of necessary outlets for the retail trade, of course I would be prepared to take action.
Comment on this
As the Deputy well knows, I do not deny its importance but I am saying it is not appropriate to discuss policy at Question Time.
Comment on this
Is the Minister aware that it is the opinion of all concerned that since the planning directive was issued the position has deteriorated considerably?
Comment on this
I am anxious to find out the attitude of the Minister towards low cost selling, price offsetting and the gross over-investment that has taken place in this trade for the past ten years. Is he aware that 3,500 independent traders have gone out of business since 1971——
Comment on this
The Deputy appears to be giving a lot of information rather than looking for it. I cannot allow Question Time to proceed in this irregular way.
Comment on this
This is only my second question. I am asking the Minister if he is aware that 36,000 people have lost their jobs in the wholesale and retail independent trade and that 10,000 people have lost their jobs in the food industry because of power-buying by the multinationals? It is necessary to safeguard the interests of the independent traders——
Comment on this
Will the Minister indicate whether, apart from having discussions, he is prepared now to recognise the dilemma of the independent traders?
Comment on this
I would not be as dismissive of the effect of the planning legislation introduced by the Deputy's party. The association I met yesterday indicated that under that legislation they have been 50 per cent successful in preventing supermarket developments going ahead. In half the cases where people sought permission it was refused under the provisions of the legislation.