Superquinn chief defends `strategy' to avoid Order

Superquinn made a "careful legal analysis" of the 1987 Groceries Order before devising a strategy to circumvent its ban on support money, the supermarket group's managing director has told a Dail committee.

Senator Feargal Quinn said the company had never made a secret of the fact that it had always believed the Order to be "naive and ill-considered". On this basis, Superquinn had gone to considerable trouble in 1988 to find "a sensible way of living within its terms".

Answering questions from the Joint Committee on Enterprise and Small Business, Mr Quinn rejected the term "subterfuge" for an arrangement in which support payments went to a separate company. This was a "special structure" which was necessary to allow Superquinn to do what most British-owned supermarkets could freely.

Mr Quinn told the committee he had given an undertaking to the Director of Consumer Affairs that he would not discuss details of the case pending completion of her inquiry.

But in a prepared statement, he said the Groceries Order was "unworkable and unfair because it cannot be applied to UK-based retailers in Ireland, and puts Irish suppliers and retailers at a disadvantage". Any UK retailer trading in Ireland was in a position to drive a "coach and four" through the Irish law.

During questioning, Mrs Nora Owen (FG) said the senator had spoken "very passionately" about the need to repeal the law, but he had also addressed the committee only four weeks earlier, and had not seen fit to mention the problem then.

She added she was "very unhappy" that the committee had agreed to invite Senator Quinn in circumstances where it could not hear details of what Superquinn was doing on the question of support money. Members were being asked to recommend the repeal of the Groceries Order, "but we don't know why the law needs changing".

Mr Andrew Boylan (FG) accused Superquinn of a "con trick". Suppliers were paying through the nose for short-term price reductions, but there was "no overall benefit" to the customer, he said.

Mr Conor Lenihan (FF) wondered why the law needed changing when Superquinn had apparently availed of a legal structure that allowed "the subterfuge of a logistics company receiving the support money". But Mr Quinn said he would not accept the word "subterfuge" for what the company did. He added that he had suffered from much adverse publicity this week, including the suggestion that Superquinn had made "cash demands" of suppliers. This carried the insinuation of other irregularities, including non-payment of tax.

"Everything we have done was strictly within the law. We have nothing to be ashamed of, tax or otherwise . . . There was never any question of cash demands," he said.

The meeting was also addressed by the director general of the grocery trade organisation, RGDATA, Mr Michael Campbell, who said the Grocery Order enjoyed the support of most people in the sector. "I have great respect for Superquinn, but I have to say they got it wrong on this one."

He could see no reason for a panic about the threat of British and other foreign competition, and rejected Senator Quinn's suggestion that Superquinn might not be around forever. "I would have far more confidence in Superquinn than he has himself."