EU ‘throws doubt’ on Dawn Meats / Dunbia merger

The EU Competition Commissioner has “thrown doubt” over a proposed merger of Dawn Meats and Dunbia, according to MEP Matt Carthy.

Carthy commented from Brussels following the hearing in the Agriculture and Rural Affairs Committee. He said: “On Friday, negotiating parties for the Dawn Meats / Dunbia merger officially notified their intentions to swallow up remaining scraps of the processing market to competition authorities.

“Unfortunately, the commission hasn’t set a very reassuring precedent when it comes to reigning in this complete usurpation of the meat processing market by these top actors.”

Elaborating, Carthy said: “Last year competition authorities spent a mere five weeks assessing the impact of the ABP/Slaney merger before authorising it.

It is wholly inadequate to expect that a full picture of the bargaining position of Irish farmers could be deemed to be assessed in such a short period of time.

“At the time, it was argued that this merger was ‘needed’ in order to compete on international markets. If farmers were to follow this line of reasoning then it would seem a done deal that the Dawn Meats / Dunbia merger would be approved.

“In response to my questioning today however, the commissioner threw doubt on this latest merger – which would see over 50% of the national cattle kill in Ireland controlled by two processing giants and price setters,” the MEP stated.

“I urged the commissioner to stop and look at the effect these mergers were having on farmers’ incomes and bargaining position.

It is important that the commission takes a much stronger position on what is happening in this sector before all independent processors are forced out of the market.

“The fact that the controllers of these companies are pocketing upwards on €750,000 in direct payments, means that farmers have every reason to be suspicious of the prices they are being offered.

“Commissioner Vestager said that the starting point for assessing the Dunbia / Dawn Meats merger would be the situation the ABP/Slaney merger had created,” Carthy said.

She assured me that her assessment would assess the dangers of a duopoly effect in the Irish situation and the prices farmers would get as a result.

“Although this is promising, the effects of Brexit put Irish farmers in a precarious situation. The commission appears to be ready to assess mergers in an EU context, while the reality is that Irish farmers operate in a geographically peripheral context.”

Carthy concluded, noting: “If the commission is not prepared to assess the Irish situation through a special lens, then we need to look at reforming the way these mergers are authorised.”

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