€25 million APS for beef ‘will have negligible impact’ – MII

Meat Industry Ireland (MII) has warned that a €25 million Aids to Private Storage (APS) scheme for beef, announced last week by the European Commission, will have “a negligible impact” in dealing with the market effects of Covid-19.

“MII members have assessed the APS scheme now that details are available. The level of aid announced goes nowhere near what is required to cover the costs associated with freezing, storage, financing and also the collapsed market value of the cuts,” the processor representative body said in a statement.

It added: “APS is never a preferred market support measure as it simply stores the problem for a period and the product will have to come back out on the market in three or five months time.

Also, all of the cuts from the hindquarter must go into storage. There is no flexibility to sell those cuts that can find an acceptable market price at present, and to only store unsaleable cuts.

“A €25 million market support measure – even if availed of – for the entire EU beef sector will have a negligible impact. It falls well short of the support needed to address the scale of market disruption that has been caused by the loss of the food service sector across the EU,” MII argued.

The food service sector accounts for 30% of Irish beef exports and 60% of the country’s high-value steak cuts, MII highlighted.

The scale of carcass imbalance is unprecedented. The elevated level of retail business, which has now stabilised, is concentrated on the staples of mince and diced/burger beef products, and goes nowhere near counter-balancing the lost value from the collapse in steak sales.

“As long as the food service sector remains shut down across the EU, the carcass imbalance will continue. Based on the general Covid-19 restrictions across the EU, it is difficult to envisage a meaningful re-opening of restaurants for quite some time,” MII noted.

The statement concluded: “More significant sector supports will therefore be needed.”