‘No cartel in operation but regulator needed in beef sector’ – CCPC

The Competition and Consumer Protection Commission (CCPC) has confirmed that it does not believe there is a cartel operating within the meat processing sector in Ireland.

It also stated that there is a need for the establishment of a “sectoral regulator or office for the agriculture sector” because of the nature of the market and “the issues around sustainability and viability”.

The revelations, meanwhile, come on foot of an inquiry carried out by the commission after it was asked to examine complaints in relation to the Unfair Trading Practices (UTPs) Directive and its transposition in Ireland; anti-competitive practices in the beef sector and requirements attached to the Twenty20 Beef Club Programme.

‘Arrangement and anti-competitiveness’

Meanwhile, in relation to the Twenty20 Beef Club Programme, the CCPC said it had received a small number of complaints in relation to “the arrangement” and subsequently examined them carefully.

It also pointed out that the nature of these inquiries were “not in relation to a cartel”.

“This type of agreement – that is an agreement between players at different levels of the food supply chain – is known as a vertical agreement and under an EU Block Exemption Regulation certain vertical agreements may fall outside the provisions of competition law which deal with anti-competitive agreements,” the spokesperson continued.

“These are vertical agreements where the market shares of both the buyer and the seller are below 30%. If either of the market shares are above 30%, or if the agreement contains hardcore restrictions on competition, the agreement may give rise to competition concerns.”

‘No evidence of a cartel’

A CCPC spokesperson told AgriLand that, under Irish and European competition law, a cartel is an agreement between competitors to fix prices, limit output or share markets to their own benefit.

It is an extremely serious breach of the law and, in Ireland, requires a criminal standard of proof.

The spokesperson continued: “The CCPC has, to date, examined a number of complaints and followed various lines of inquiry in the meat processing sector.

“So far, however, we have not uncovered evidence of a cartel and we have not opened an investigation.

“As with all sectors we will continue to examine every complaint we receive and we welcome information or evidence of this nature from anyone.”

‘A rebalance of power’

The CCPC went on to say that, considering the nature of the market and the issues around sustainability and viability, it was its experience – in its engagement with this sector – that if the objective is to rebalance power, then “a substantial and more interventionist response is required than what is currently in the directive”.

Power imbalances are best addressed before contracts are signed rather than trying to address them after the fact.

The spokesperson continued: “The role of competent authority for the UTPs Directive, the CCPC believes, requires a dedicated organisation on the ground, with specialised expertise, knowledge and an ability to build confidence across the sector.

“A critical component of this will be through advice to individual farmers – they need to know what is allowed, what isn’t allowed and who they can go to when they have a problem.”

The CCPC then pointed to the nature of the industry and the issues that need to be addressed.

“The nature of this industry is that issues need to be addressed as they arise and farmers cannot wait for lengthy investigations and the uncertainty of legal challenges,” added the spokesperson.

“This in our view requires a sectoral body who can act quickly on farmers’ behalf, including offering some form of adjudication, rather than an enforcement approach that would take action after a breach of the directive has occurred.

“To do this effectively, additional and/or alternative approaches such as mediation or arbitration as in the UK code should be considered.”