Dáil Éireann debate -
Wednesday, 3 Jun 1992

Vol. 420 No. 6

Written Answers. - EC Car Price Differential.

Ivan Yates

Question:

30 Mr. Yates asked the Minister for Industry and Commerce if he supports the proposal of the EC Competition Commissioner that the maximum price differential between EC states in the price of cars should be 12 per cent; and if he will make a statement on the matter.

Bernard Allen

Question:

44 Mr. Allen asked the Minister for Industry and Commerce the reason Ireland was excluded from a recent European Commission study of car prices as a result of which the Commission Vice-President, Sir Leon Brittan, called on car manufacturers to take measures to ensure that the selective distribution system does not deprive European citizens of the right to buy the car they want at an undistorted price; and if he will outline the measures the Government proposes to take on this study.

Minister for Industry and Commerce (Mr. O'Malley)

I propose to answer Oral Question No. 30 and written Question No. 44 together.

I am not aware of any new proposal on the part of the EC Commission that the maximum price differential between member states in the price of motor cars should be 12 per cent.

The EC Commission issued guidelines on this matter in 1985. These guidelines, in the form of a Commission notice, related to Commission Regulation (EEC) No. 123/85 of 12 December 1984. This Regulation provides for a block exemption of certain agreements in relation to motor vehicle distribution and servicing from the provisions of Article 85 of the Treaty of Rome. The Regulation entered into force on 1 July 1985 and expires on 30 June 1995.

At the request of certain sectors involved and as a guideline to the Regulation, the Commission published a notice in January 1985 which set out some of the conditions by which agreements would be assessed.

In the notice the Commission indicated that, for the time being, certain circumstances would not of themselves justify an investigation of whether an agreement exempted by Regulation (EEC) No. 123/85 is incompatible with the conditions of Article 85 (3) of the Treaty. One of those circumstances would be where recommended net prices for sales to private consumers of a motor vehicle in one Member State and of the same or a corresponding motor vehicle in another Member State differed by not more than 12 per cent.

My understanding is that the Commission Vice President, Sir Leon Brittan, was commenting on a Commission report on intra-Community car price differentials which was published on 6 May 1992. The report was produced in the context of complaints made to the Commission about unjustified price differentials for new cars between Member States. The complaints claimed that this situation was the consequence of Regulation 123/85. In their report the Commission state that Ireland was excluded from the study because of the small size of the market.

I have no function in the administration of Regulation 123/85, which is solely a matter for the EC Commission. Accordingly, I do not propose to take any action on foot of the Commission's study.