Watchdog woes

WHAT'S THE STORY WITH CONSUMER REPRESENTATION?

TOUGH TIMES call for strong stands, yet, just when consumers most need help, their advocates are facing difficulties. After four decades of championing the rights of shoppers, the Consumers' Association of Ireland (CAI) is in slow decline and beset by internal disagreements.

Meanwhile, the State-funded National Consumer Agency (NCA), officially launched to great fanfare only two years ago, is having its sails trimmed through a forced merger with the Competition Authority (see panel below).

In recent years, the internet has emerged as an expansive source of information for consumers, yet many of the grassroots sites that have sprung up have already disappeared.

It’s perhaps not surprising then that Irish prices are among the highest in Europe, with “Rip-off Ireland” as much a reality as when the term was coined a decade ago. Consumers’ concerns today are not very different from those expressed back in September 1966, when a large crowd gathered in Dublin for the inaugural meeting of the CAI. Speakers bewailed bad value and called for more reliable information on goods.

With the help of the Irish Countrywomen's Association's network and the support of Buy Irish enthusiasts, the CAI quickly established itself as a force to be reckoned with. Membership soared and it produced a magazine, Consumer Choice, filled with the results of product testing and other useful information.

Ireland’s entry to the EEC saw the introduction of a raft of progressive European measures. Yet business and the trade unions remained hostile and the growth of the CAI peaked.

IN LATTER YEARS, it has atrophied and its membership profile has aged; consumer organisations throughout Europe are facing similar problems. Membership halved in a decade to about 5,000, while attendance at annual general meetings has fallen to a few dozen regulars. Most members are interested mainly in the magazine and play no active role in the organisation. The association is heavily reliant on income from magazine subscriptions, which fell 10 per cent last year.

In recent months, three prominent council members – Diarmuid MacShane, Enid O’Dowd and Mel Gannon – resigned after internal wrangling over future policy as well as access to information on the running of the organisation.

MacShane, who has effectively set himself up in opposition to the CAI through his website, ValueIreland.com, is critical of the organisation’s failure to make a bigger impact on public consciousness.

“Apart from producing the monthly magazine, the CAI has remained entirely reactive and has not presented any new or original initiatives to the Irish consumer in the past two years. The Irish consumer still does not know what the CAI is about.”

For journalists, the association serves as a useful source of comment. Run on a shoestring, it has struggled to make its voice heard, particularly against the well-funded guns of national partnership.

Chief executive Dermot Jewell acknowledges the CAI has to adapt and change but says this is because so many items on its “wishlist”, such as an ombudsman, better consumer law and improved food safety, have been achieved. He also argues that the consumer agenda is “too broad” to satisfy all demands.

ALTHOUGH ITrepresents the consumer on a plethora of bodies both in Ireland and the EU, the results of this advocacy aren't immediately obvious to the outside observer. Jewell says this is because board deliberations are often secret and directors are precluded from public comment.

Internally, this issue has been the subject of debate. Jewell, chief executive for over a decade, was paid over €30,000 in 2007 in respect of representation on various boards, according to the latest accounts. This figure, separate from his salary, includes €9,500 from the Investor Compensation Company and €7,000 from Bord Bia. He has since been appointed chair of the Financial Services Ombudsman council, which pays €24,000 a year.

Vice-chairman Michael Kilcoyne, a trade union official from Co Mayo, was paid €14,000 in fees and almost €7,000 in expenses by Bord Bia over a one-year period, according to information obtained under Freedom of Information legislation.

The three departed council members suggested that in light of the association’s financial pressures, board fees should be given to the CAI. They left after being outvoted.

Jewell responds: “We may well look towards the contribution of these fees by volunteer council members who give so much of their own time to the organisation. I’ve no doubt we will discuss this at council level at some time.”

He won’t, however, discuss the fees he himself receives for board representation, saying this is “a private matter for me to discuss with the association”. The CAI accounts do not specify his salary and he won’t discuss that either.

Asked about the issue, Mr Kilcoyne said: “That’s always been the way it is.”

The future doesn't look promising. Consumer Choicewill hardly be immune from the global decline in publishing caused by the internet. Other sources of funding will be hard to come by in the current economic environment. Jewell says the possibility of combining resources with other organisations in areas such as health and telecoms is being considered.

So the CAI is likely to stagger on, small, independent and hamstrung – which, you suspect, is just the way many powerful forces in society would like it.

Cuts and mergers Changes at NCA

While the CAI has suffered internal differences, the problems for the National Consumer Agency are external.

It was one of the worst-kept secrets before the Budget that the NCA was to be merged with the Competition Authority. The idea was first floated by Fine Gael and was adopted with gusto by the Government, which has yet to explain how the amalgamation will take place.

The NCA opened its doors just over two years ago and was due to be decentralised to Cork this year. That won't be happening now, though no one is prepared to say so explicitly.

In common with other Government bodies, the agency has had to swallow a budget cut, but a 10 per cent drop to €9 million still leaves it far better resourced than the CAI, which has an annual turnover of €700,000. Chief executive Ann Fitzgerald (pictured) takes a pragmatic, optimistic view of the change. "I'm genuinely happy. I have no fears about us being able to do what we're supposed to do. If I felt we couldn't I'd be telling everyone." She insists the union will be "a marriage of equals" and the resulting entity will remain independent of the Department of Enterprise, Trade and Employment.

Criticisms of the NCA rarely take into account its youth. The agency has built up a useful information resource for consumers in publications and on its website. It has pursued a number of single-issue campaigns with some success, but has been less effective in countering the power of big corporations, such as fuel companies, food retailers and telecoms operators.

Its main achievement so far has been to get consumers to focus on value. Fitzgerald argues that the NCA's regular food price surveys have played a major role in getting shoppers to change their habits.The main beneficiaries have been foreign-owned discounters such as Lidl and Aldi and retailers in the North, something that might rebound on the agency as jobs go in the prolonged recession.

On paper, consumer legislation is stronger than ever, but the NCA has been criticised for not going for the jugular where traders commit offences. Fitzgerald argues that it is more effective to get an undertaking from a trader to refrain from illegal activity, which will dissuade others, than to enter into legal proceedings which could take years.

The merger of the NCA and the Competition Authority will require legislation, so it is unlikely to take place for a number of years.