It remains to be seen whether Minister for Justice Michael McDowell can achieve even greater deregulation of the drinks industry now that his plans for a cafe bar licensing system have been withdrawn.
The Minister's new approach, following tetchy consultations with the Taoiseach, Mr Ahern, was first suggested by the Licensed Vintners' Association and was clearly designed to limit competition and to protect their financial interests.
Mr McDowell is still determined to liberalise the licensing system and to introduce change. And he should be applauded for that. But, judging by the comments of his Progressive Democrats colleague, Senator Tom Morrissey, it is probably a lost battle. Powerful interests in our society have flexed their muscles. And the Government has caved in.
The Minister should not feel victimised. It happened to Tánaiste Mary Harney in relation to facilities at Dublin airport. His predecessor, John O'Donoghue, suffered a similar setback some years ago when Fine Gael resisted reforms of the licensing system and Fianna Fáil backbenchers supported the publicans.
The present skirmish over restrictive practices in the drinks industry shows how vulnerable the Government is to pressure from big vested interests. It practically guarantees that nothing will be done before the general election about the Groceries Order, which keeps food prices artificially high. The Tánaiste spoke about the need to change the order four years ago and was opposed by Fianna Fáil backbenchers. They were, in turn, encouraged by the IFA, Ibec, RGDATA, publicans and small multiples. The voice of the ripped-off consumer was not heard.
The order was defended on the grounds that it would prevent predatory pricing by large retailers, support independent retailers and protect jobs. But it also prevents the benefits of substantial long-term discounts being passed on to consumers.
The chairman of the Competition Authority, Dr John Fingleton, has estimated its removal would bring down food prices and provide the equivalent of a 2 per cent pay increase to the average industrial worker. Following a succession of reviews, a decision concerning the future of the Groceries Order now rests with the Minister for Enterprise, Trade and Employment, Micheál Martin.
The Government has had plenty of advice on the importance of competition and deregulation in maintaining the competitiveness of the economy. But it has failed to hold its nerve when its ministers have put forward proposals for necessary reforms. Mr McDowell's proposal for a cafe bar licence was designed to encourage a cultural shift towards the moderate consumption of food and alcohol in a casual setting. But the initiative threatened the profits of publicans, with predictable results. Any capitulation to vested interests by Government sends the wrong signal. And ultimate responsibility must rest with the Taoiseach.