Twenty20 Beef Club ‘is anti-competitive’ and ‘restrictive’ – TDs claim

Members of the Joint Oireachtas Committee on Agriculture, Food and the Marine have hit out at the Glanbia/Kepak Twenty20 Beef Club for being “anti-competitive” and “restrictive”.

Speaking during a sitting of the committee yesterday, Tuesday, May 14, TDs – including: Fianna Fáil’s Jackie Cahill; Sinn Féin’s Martin Kenny; and Labour’s Willie Penrose – also voiced intentions to raise their concerns about the programme with the Irish competition authority at an upcoming meeting.

The ‘club’, announced last month, will involve the rearing and finishing of calves – originating from Glanbia suppliers’ dairy herds – under a guaranteed-pricing model in a Kepak slaughtering facility.

All inputs such as: fertiliser; nutrition (feed, milk replacer, crunch, etc.); and animal heath products (with the exception of prescription-controlled antibiotics) must be purchased from Glanbia.

Those behind the programme have said that a farmer growing their own grain will be permitted to use this as feed providing full traceability is available. Therefore, the initiative will operate on a “closed-loop basis” providing full traceability to the consumer.

Representatives from both Glanbia and Kepak were present at yesterday’s meeting where they defended the programme.

‘Closed-loop concept’

Fianna Fáil’s Jackie Cahill told yesterday’s proceedings that he “was not happy with what is being done here”.

He went on to point out that while it was evident there was a number of initiatives within the programme that were welcomed by many people in the sector, the overall concept of a “closed-loop system” – is “anti-competitive”.

This programme is anti-competitive; it is a very slippery slope for farmers to go down.

“We need to know more about the club’s pricing structure and the bonus payments. Also, do Friesian cattle qualify for bonus and what is the base price for finished cattle?” he asked.

Sinn Féin spokesperson on agriculture deputy Martin Kenny pointed out that while it was “very apparent” that the beef sector was “in a lot of trouble”, the closed-loop system within the Twenty20 Beef Club Programme required “further examination”.

“One of the problems being put forward with the programme is that farmers think there is a possibility of getting a bonus and obtaining money upfront – that is attractive,” he continued.

But what about the farmers that are worried about moving away from the notion that they haven’t got the freedom to bring their imports from where they want themselves?

“They haven’t got the freedom either to sell to whoever they want to themselves – and all because they are tied so restrictively with the programme.”

Kenny went on to say that it was his belief that the programme could not work long term and that it was not the solution that was needed within the sector.

“It is not the solution to the problems we have in the beef industry at the moment.”

Deputy Willie Penrose, Labour spokesperson on agriculture, rowed in with his concerns surrounding the programme – which he also intends to raise with the competition authority when it appears before the committee in a few weeks’ time.

This will provide the opportunity to explore whether or not the programme stands up to scrutiny as an anti-competitive practice.

“Maybe then all our worries on this will be dispelled,” he said.

‘Certainty’

Meanwhile, Martin Ryan, head of beef at Glanbia, said that itself and Kepak had come together on the programme in an effort to “develop a solution” that would “bring certainty” for farm families involved in the production of beef.

For consumers the Twenty20 Beef Club will provide a secure and predictable supply of high-quality beef with unrivaled input, traceability and provenance through the attributes of a closed-loop supply chain.

He continued: “The closed-loop assurance includes nutritional products, non-prescription animal health products and fertiliser, sourced and supplied by Glanbia Ireland.

“From a consumer perspective this provides absolute traceability around key inputs and is the genesis of our ability to pay a very significant ‘Club Premium’.”

Ryan went on to say that the first year of the programme is a pilot phase during which 6,000 calves will be enrolled on GI and Kepak supplier farms throughout the Republic of Ireland.

Numbers, he continued, will increase to 20,000 in year two, with a target of 50,000 from year three and subsequent years.

“The Twenty20 Beef Club was developed to bring greater certainty and predictability to beef production for all stakeholders in the industry and we believe that it delivers a new model for calf-to-beef production; guarantees a market for members’ cattle; provides a predictable and guaranteed pricing structure; is a production blueprint based on leading-edge technical advice; is a model to deliver a reduction in environmental impact while increasing output; and is a product for which the consumer will be happy to pay a premium.”

‘Inclusion for all’

Following on from that, Mick O’Dowd, agri-business development manager at Kepak, said the Twenty20 Beef Club was open to dairy farmers, beef finishers and to suckler farmers rearing dairy calves from the Glanbia herd.

Meanwhile, speaking to AgriLand, Pat O’Keeffe, farmer relations, Glanbia clarified that Friesian cattle did qualify for the programme, and that, the base price is the Average Quoted Price (AQP) of all processors in the Republic of Ireland for that week.

“The Twenty20 Beef Club is an entirely voluntary programme but it offers the certainty of a market for steers and heifers and a range of bonus payments for animals that meet the criteria,” he concluded.

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