Restrictive Business Practices in Ireland: Legislation and Administration
| Published date | 01 December 1974 |
| Date | 01 December 1974 |
| DOI | http://doi.org/10.1177/0003603X7401900410 |
| Subject Matter | Article |
RESTRICTIVE
BUSINESS
PRACTICES
IN
IRELAND:
LEGISLATION
AND
ADMINISTRATION
by
JOHN
J.
WALSH·
ECONOMIC
BACKGROUND
1.
It
will, I believe, be helpful to an understanding of the
evolution of policy
and
practice in relation to restrictive prac-
tices in
Ireland
to
start
with abrief review of certain aspects
of industrial and commercial development which
had
abear-
ing on the legislation and on
its
subsequent application.
2.
In
the 1920's, when the new
state
was recovering from
aprolonged period of
war
and civil strife, the industrial sec-
tor
which
it
inherited was so small as to be verging on the
insignificant. Emigration was steadily reducing the popula-
tion.
Efforts
were concentrated at first on reconstruction,
and
later
on agriculture
and
on infra-structural development,
par-
ticularly electricity, roads and housing,
but
abeginning was
made in industrialisation by a careful policy of selective
tariff
protection.
In
the
early
1930's a new Government embarked
on
an
intensive policy of industrialisation aimed
at
supplying
the home market with the aid of substantial
tariff
and quanti-
tative protection. By the end of the 1930's
it
had
achieved a
substantial measure of success.
In
the circumstances of the
time, with aworld recession and the growth of
barriers
to
international trade, this was perhaps the only viable policy.
During
the period of the Second World
War
the recently
established industries proved useful in maintaining minimum
supplies of many commodities, but shortages and rationing of
many imported consumer goods and
raw
materials were in-
evitable. To facilitate allocation and rationing, the services
of associations of
traders
and manufacturers were used by
• Chairman, Irish Restrictive Practices Commission.
AUTHOR'S
NOTE:
The views expressed are those of the author,
not
necessarily those of the Restrictive Practices Commission.
803
804
THE
ANTITRUST
BULLETIN
the Government, and, in consequence, these associations de-
veloped considerable strength
and
cohesion.
In
the postwar
years, as supplies became easier and competition began to
emerge again, the associations used this strength to adopt,
with increasing
vigour,a
network of restrictive practices, in-
cluding limitation of entry, collective resale price mainte-
nancs and, less often, collusive price fixing. The substantial
protection afforded to
industry
and the
very
limited number
of manufacturers in some industries due to the small home
market facilitated restrictions, and also made them more
harmful.
3.
Perhaps
an
inevitable
feature
of a relatively closed
economy is
that
it
gives rise to defensive attitudes
in
its busi-
ness community.
In
Ireland this defensiveness tended to be
heightened in the postwar
years
by the increasing
trend
towards
greater
freedom in international
trade
promoted by
E.E.C.and
the Council of Europe. The
European
Coal
and
Steel Coinmunity was established in 1951 and the E.E.C.
in 1957.
In
the course of the 1950's a
major
change in official
economic policy was gaining momentum in Ireland.
By
1950
it
had
become
apparent
that
industrial development to serve
a small protected home
market
had
passed the limit of its
potential
and
was increasingly inappropriate in a changing
international climate. Therefore, a policy was adopted, and
gradually articulated, of moving towards an open economy.
It
could
not
be implemented rapidly, particularly
in
the'
ab-
sence of substantial resources, without unacceptable risks to
existing
industry
and to employment
at
a time of continuing
high emigration,. The basic aim of policy, as
it
finally evolved,
was to create' asuitable environment for, and to stimulate
the
development of, export-led expansion.
In
industry
this was
to be achieved by encouragement of private foreign invest-
ment in the production of goods
for
export
and
by the adap-
tation
of existing industry, both psychologically
and
through
modernisation,
to
enable
it
to embark on exporting
and
to
meet international competition.
It
was
accepted
that
tariff
and
quantitative protection would be gradually phased out.
mISH
BUSINESS
PRACTICES 805
Indeed,
in
the
early
1960's
it
was decided
that
tariffs
would
be reduced unilaterally; and this was done until the signing
of the Anglo-Irish
Free
Trade
Area
Agreement
in
July
1966~
led to reciprocal benefits between
the
two countries.
In'
in-
ternal
trade, policy was directed to stimulating competition.
By
the late sixties the overall aim of policy
had
achieved con-
siderable success. Companies abroad,
in
increasing numbers,
particularly in the U.S.A., Great Britain, Germany
and
the
Netherlands, were establishing subsidiaries to manufacture
for
export
markets,
and
home-based
industry
was
turning
to exploring export markets, although sometimes with some
hesitation.
Industrial
employment was steadily increasing,
and
emigration
had
fallen considerably, so
that
for
the first
time
in
over ahundred
years
the population was growing,
except
for
aslight increase in the period 1946 to 1950.
LEGISLATION
IN
THE
FIFTIES
4
..
In
1947 a measure entitled the
Industrial
Efficiency
and
Prices Bill was introduced in the Dail. The main objects
of the bill were to improve methods of price control
at
a
time when supply difficulties still prevailed and to introduce
procedures to improve the efficiency of protected industries.
It
was hoped to restore competition,
and
the
bill prohibited
price fixing and the limitation of
entry
to
trade
except -with
the
approval of the Minister for
Industry
and Commerce,
The provisions in the bill to establish joint industrialcouncils
and
to monitor the efficiency 'of protected industries excited
a good deal of controversy. The bill lapsed with the disselu-
tion of
Parliament
in
1948 and was
not
revived.
It
is
inter-
esting
that
twenty-three years
later
the National
Prices
Oom-
mission introduced, without any criticism, procedures
f()1'
appraising the efficiency of companies seeking price increases,
5.
In
the following
years
complaints regarding restrictive
practices mounted
in
the Department of
Industry
and Com-
merce. The Department undertook astudy of restrictive
practices legislation abroad, with
particular
emphasis on prae-
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