Why live exporters are treated with a special reverence
Published 14/11/2013 | 01:00
The collapse of Ireland's largest live cattle exporter has rocked the fragile confidence in our beef sector. TLT International was owned by the Garavelli brothers, Paolo and Davide.
Between them, they had built up a business that exported over €30m worth of livestock every year, in the form of 30,000 head of cattle, 60,000 sheep and some pigs.
Some observers reckon that it was one of the biggest independent operators in Europe, with 14 trucks on the road shipping thousands of animals out of the country on a weekly basis.
Up to 80pc of the stock was trucked via the Rosslare-Cherbourg ferry through France into Italy, with some stock travelling as far as Spain and even Libya.
The Garavellis claimed this week, as the receiver from Grant Thornton moved in, that all the outstanding contracts for stock had been handed over to a French firm with some knowledge of the Italian market.
However, despite the scale of the operation based just north of Mullingar town in Co Westmeath, the Garavellis only returned a profit of €180,525 last year.
The latest set of accounts also show that the company's overdraft had doubled to €4,577,165 by the end of August 2012.
Trade creditors accounted for another €3.4m of the firm's creditors falling due within one year, according to the same documents.
One of the directors, Paolo Garavelli, blamed a combination of rising Irish prices and the horsemeat crisis as the two main factors that finally undermined the operation.
However, the fact that the firm was dealing with the British based HSBC for the last two years for its day-to-day credit needs cannot have helped.
Prior to this the Garavellis did most of their banking with AIB. But credit lines there tightened significantly recent years.
If the brothers were still with AIB, would they still be in business? It's hard to say, but surely the strategic importance of the business would have had more bearing on the final decision to call in the receivers if it was being made in Dublin.
Some might point out that livestock that are exported 'on the hoof' represent a lost opportunity to the national economy. It's a classic case of exporting a commodity that we could be adding value to here at home.
In the process of slaughtering, boning and cutting up carcases, a huge amount of employment is generated.
This is the reason that the whole beef processing sector gets such a favourable hearing at government level and why businesses such as Larry Goodman's ABP was bailed out to the tune of hundreds of millions when the company went into examinership back in the 1990s.
However, try telling farmers that their livestock should not be exported before they've been slaughtered here first.
Every beef farmer is firmly of the conviction that the live exporters are the only people keeping the meat factories honest.
Without them, they believe that prices would be even lower.
Bear in mind that Irish farmers are already being paid about 20pc less for their cattle compared to their British-based counterparts.
Bord Bia estimates that about half of Irish beef is sold into the British market.
So the live exporters are treated with a special reverence within farming circles. But do they really have that big an impact on the price that the farmer ultimately gets for his stock?
The answer to that question should become a lot clearer this week as marts get to grips with a buying contingent that no longer includes TLT's agents.
Irish IndependentFollow @Indobusiness