‘Farmers not convinced there is adequate price competition in beef sector’
Farmers do not believe there is sufficient price competition in the beef sector, according to the Irish Farmers’ Association (IFA).
Livestock Chairman, Angus Woods, conveyed this message to senior officials within the Competition and Consumer Protection Commission (CCPC) at a meeting in Dublin this week.
It is the CCPC’s responsibility to guarantee robust competition in the beef processing sector, Woods said.
Farmers have seen no evidence from the CCPC that they are prepared to take any action to tackle the competition issue at processing level.
He added that recent developments on mergers in the beef and sheep sectors were raising serious concerns among farmers about price competition and the increasing power of processors.
Proposed merger of Dawn Meats and Dunbia
The CCPC is currently investigating the proposed merger between Dawn Meats and Dunbia, which it was first made aware of on Friday, June 16.
Typically, the commission’s deadline to make a Phase 1 determination is 30 working days after the initial notification.
Within this timeframe, the CCPC is required to decide whether to clear the merger or launch a full Phase 2 investigation.
If this occurs, the deadline for a Phase 1 determination becomes 30 working days from the receipt of the requested information.
During the merger review process, the parties involved may submit proposals detailing the measures they might take to address any potential negative effects the deal could have on competition.
Such proposals have the effect of extending the deadline for making a determination to 45 working days.
Investigation into the merger
The IFA was meeting with the commission to discuss the proposed merger of Dawn Meats and Dunbia, as well as the broader issues around the lack of competition and transparency in the beef sector, according to Woods.
It is the responsibility of the CCPC to carry out a proper and full investigation into this merger, and to publish the outcome so that farmers can see what investigative work was carried out and what rationale [the CCPC] uses to arrive at its decisions.
Woods told the CCPC that studies – conducted by independent competition consultants – point to a strong body of evidence that competition in the primary procurement markets for cattle is weak.
Additional mergers were likely to weaken competition even further, he added.
The lack of transparency around market returns, wholesale prices and profits across the meat chain – from processing right through to retail level – is unacceptable and impedes competition, Woods said.
He called for action at national and EU level to address this issue and pointed to the clear and robust system of transparency in the US. Under US legislation, meat processors are required to report wholesale prices and stocks twice a day across all beef cuts sold, he concluded.