IFA fury as ABP gets Brussels' go-ahead for Slaney Foods deal
Published 08/10/2016 | 02:30
LARRY Goodman's ABP, the state's largest beef processor, has been given the green light to buy out Bert Allen's 50pc share of Slaney Foods.
Yesterday, farm organisations denounced the European Commission's decision to "clear the way" for the merger.
ABP lodged its finalised application for the buy-out with the EU Commission last month.
Shortly afterwards, the Irish Farmers' Association submitted an analysis of the impact of the deal, which claimed the move would significantly weaken competition in the beef sector by increasing the firm's share of the national prime cattle kill from 26pc to 36pc.
Joe Healy, IFA president, accused the Irish Competition Authority of "turning a blind eye" to serious competition implications in the Irish market for the purchase of cattle.
"They effectively washed their hands of the ABP/Slaney deal by leaving it to the Brussels authorities," he claimed.
Angus Woods, IFA livestock chairman, said livestock farmers fear a lack of competition for cattle.
"The reality today is farmers are selling at a loss making base price of €3.70/kg, with some factories claiming they cannot take stock for another week. At the same time, prices for the equivalent beef animals in our main export market in the UK are rising €220 per head more than Irish prices."
The Irish Cattle and Sheep Farmers' Association is also concerned about the green light for the deal.
ICSA beef chairman Edmond Phelan said he is "dismayed".
"This decision will only add to the perception that the EU is good at regulating small enterprises but weak on big business."
He said it will leave Irish cattle and sheep farmers in a worse position than before. "Farmers are regulated to within an inch of their lives yet we have seen no regulation further down the food chain with the big retailers and processors making huge profits on the back of farmers who are lucky to break even.
"EU rules demand that producer groups cannot control more than 15pc of supply, yet ABP factories have now received the green light to control in excess of 28pc of the cattle trade and 40pc of the sheep trade," he said.
However, Meat Industry Ireland (MII), which represents business interests of the beef and lamb processing sector in Ireland, recently dismissed concerns about reduced competition in the beef sector in the deal succeeded.
MII pointed to the "phenomenal performance" of Irish beef exports selling for 110pc of the EU average this year.
Speaking to the Irish Independent, Fine Gael MEP Mairead McGuinness said a lot of people at a producer level will disagree with the ruling.
"As things stand they have taken the decision but it will be a couple of months until we know the background or the reasoning behind it that would suggest that there isn't a competitive problem in the sector," she said.
"There is certainly a problem with trust in the sector with producers on one level and the two companies involved on the other. The producers are fearful of the consequences and I'm not sure they will feel reassured by this ruling," she said.
Meanwhile Frank Stephenson, ceo of ABP Food Group, said the joint venture will enable both companies to grow their respective businesses by bringing a stronger product offering to international markets where they compete with much larger global players.