The Competition and Consumer Protection Commission (CCPC) has published its determination on the decision to green light Dawn Meats’ acquisition of the Kildare Chilling company.
It outlined that its chief reason reason for clearing the acquisition was because it would not “substantially lessen competition in any market for goods or services” in the state.
Dawn Meats is established as one of the largest meat processors in the country.
It sells fresh cuts of meat, as well as processed products such as mince, burgers, ready-made meals and retail packs under a range of brands, including Black Angus, Red Hereford, Charolais Gold, Nature’s Meadow, West Cork Beef, Dawn Chef and the Premium Butcher.
It operates seven sites in the south and one in the North and also has production and sales operations across the United Kingdom, France, Germany, Italy, Spain, the Netherlands, Poland and Denmark
The CCPC had decided to carry out a full Phase 2 investigation into the proposed acquisition by Dawn Meats of Kildare Chilling earlier this year following an extended preliminary investigation, which began in February 2022.
In its merger notification form submitted to the commission Dawn Meats had stated that the acquisition of Kildare Chilling would allow it to “expand its base of raw materials, enabling it to better meet demand from the UK and the rest of Europe”.
“It is also expected that the proposed transaction will give rise to increased production efficiencies and better utilisation of the Kildare plant, with an expected initial capital injection of up to €10 million by Dawn Meats to modernise the plant,” it stated.
Separately Kildare Chilling procures and slaughters live animals and sells meat products, beef and lamb and related by-products.
Kildare Chilling markets its meat products under the Kildara and Heritage Town brands and operates from a single slaughterhouse in Kildare town.
CCPC
The commission detailed in its determination document that it considered the procurement, processing and sale of beef and lamb meat in the state before arriving at its decision on Dawn Meats’ acquisition of the Kildare Chilling company.
It also examined the the potential product and geographic markets that were relevant for the assessment of the likely effects of the acquisition.
In their merger notification forms both Dawn Meats’ and Kildare Chilling company identified the following areas of “horizontal overlap” between their respective activities including;
- The purchase of live animals for slaughter, cattle, lamb and sheep;
- The sale of fresh beef and lamb meat.
The commission agreed with both companies on their views on the horizontal overlap.
It also said there were “vertical overlaps” because Dawn Meats had sourced small amounts of beef meat and lamb meat from Kildare Chilling for further processing.
According to the CCPC one of the central questions in relation to Dawn Meats’ acquisition of Kildare Chilling was in relation to whether “the purchase of cattle for slaughter and the purchase of lambs and sheep for slaughter are within the same relevant product market or occupy distinct product markets”.
It also examined the competitive effects of the acquisition in respect of the purchase of live cattle slaughter in the state.
The commission found that following the acquisition Dawn Meats would have an estimated share of approximately 25 to 30% in respect of the purchase of live cattle for slaughter in the state – an increase of approximately 0-5% on its pre-merger share.
It also found that on a country wide basis, ABP and Kepak would continue to “exert a competitive constraint on Dawn Meats”.
Concerns
However the determination published by the CCPC also highlighted that two farming organisations raised concerns that the acquisition would result in the “loss of close competition” between Dawn Meats and Kildare Chilling.
However the commission found that “there will remain a number of competitors that will continue to exert a competitive constraint on Dawn Meats” – including ABP, Liffey Meats and Kepak.
It also found that Dawn Meats and Kildare Chilling purchased significant amounts of their supply from different counties.
Determination
In its determination on the merger the CCPC said that in the light of its analysis of all the information and evidence available to it, the commission decided that Dawn Meats’ acquisition of Kildare Chilling would not “substantially lessen competition in any market for goods or services in the state”.