The threat to the beef sector from the proposed ABP/Slaney Foods tie-up cannot be overestimated and the contents of the recent report on the deal fully reflect that, Charlie McConalogue, Fianna Fail’s Agriculture Spokesperson has said.
McConalogue is urging the DG Competition in Brussels to carefully examine the findings of the IFA- commissioned report into the proposed merger of beef processors ABP and Slaney Foods.
The European Commission, which was officially notified of the proposed merger this week, is expected to make a ruling on the case in mid-October.
“I’m not surprised that the processing sector has responded by trying to downplay the seriousness of the move, but I am not convinced by their argument.
“The beef sector is hugely important in Ireland’s overall agri-business industry and must be protected.
“Beef farmers have come through a difficult few years, with the collapse of bull beef prices, labelling issues and factories shifting the goalposts on producers. Concentrating the market power of these processors will further limit competition and will have a detrimental impact on farmers.”
Reduced competition, combined with increased market dominance by a small number of players is bad for farmers and cannot be allowed to go ahead.
“In its report the IFA raised legitimate competition concerns, which must be fully examined by DG Competition.
“Fianna Fail has consistently argued for fair pricing and transparency in the food supply chain, but unfortunately over the past few years farmers have been getting a raw deal.
“This needs to change. Minister Creed must stand up for beef farmers instead of pandering to big business. Without his backing, the entire beef sector is being put at risk,” he said.
The proposed ABP/Slaney deal poses a risk of a substantial lessening of competition (SLC) in the State, the report found.
The report, which was prepared by Dr Pat McCloghan of PMCA Economic Consulting, has already been submitted to DG Competition in Brussels.
The overall conclusion of the PMCA report is that the “relevant market affected by the proposed transaction is characterised by weak competition and that the proposed deal poses a risk of an SLC in the State or an SIEC at EU level”.
An SIEC, a significant impediment to effective competition, is the merger control test applied by the European Commission, the equivalent of the SLC test applied in Ireland and the UK.
Combined, ABP and Slaney currently account for 25.8% of all cattle slaughterings in Ireland, however, he said that when the market is narrowed down to premium cattle of steers and heifers meeting the MII grade and weight specifications, this figure rises to 36.2% of cattle.
Dr. McCloughan said that Slaney/ICM has around 40% of the sheep kill (which ABP would control should the deal go ahead).