Dawn Meats' New Zealand deal 'nothing short of betrayal' - ICSA
Irish Cattle and Sheep Farmers' Association (ICSA) Sheep Committee chair Willie Shaw has expressed concerns over news that Dawn Meats is set to acquire controlling stakes in New Zealand’s largest sheep meat exporter, Alliance Group.
Last week Dawn Meats announced that it has been selected by the board of Alliance Group as the preferred long-term strategic partner of the meat producer.
The proposed partnership, which is subject to shareholder approval, would see Dawn Meats invest $250 million New Zealand dollars to acquire 65% of the shares in Alliance Group.
If approved, proceeds from the proposed transaction would be used to reduce Alliance Group’s short-term working capital facility by NZ$200 million, accelerate the board’s strategic capital expenditure programme and enable the distribution of up to NZ$40 million to the Alliance cooperative, subject to shareholder livestock supply.
However Willie Shaw said: “This deal raises red flags for Irish sheep farmers; it creates a real risk that more New Zealand lamb will end up on supermarket shelves in the EU and the UK, undermining demand for Irish lamb and ultimately hitting farmers here in the pocket".
Shaw stressed that low-income Irish sheep farmers cannot afford to be "squeezed further".
The ICSA chair claimed that processors talk about the need for a "year-round supply", and Dawn Meats has an aim to combine northern hemisphere production with New Zealand lamb to create that model.
"The reality is that every extra box of New Zealand lamb in European markets makes it harder for Irish farmers to get a fair price for their produce," Shaw added.
"It could wipe out the seasonal premiums that many [farmers] rely on to survive.
"Dawn Meats made its fortune off the backs of Irish farmers. For them now to turn around and chase New Zealand lamb at the expense of Irish producers is nothing short of a betrayal.”
Shaw is calling on agriculture minister Martin Heydon and the European Commission to urgently examine the implications of this deal and to ensure that safeguards are put in place so that Irish and European sheep farmers are not undermined by an influx of New Zealand lamb.
