The beef battle of Britain may be about to come full circle

Brexit and Mercosur could see South American countries regain the ground they lost to the fledgling Irish meat processing industry in the 1960s

Tipping point: Farmers protesting outside Leinster House last July against the EU-Mercosur trade deal which increases the amount of beef imports allowed into Europe from Brazil and Argentina. The protest was the first big show of strength by the Beef Plan Movement and sparked the nationwide campaign for better beef prices. Photo: Gareth Chaney
Tipping point: Farmers protesting outside Leinster House last July against the EU-Mercosur trade deal which increases the amount of beef imports allowed into Europe from Brazil and Argentina. The protest was the first big show of strength by the Beef Plan Movement and sparked the nationwide campaign for better beef prices. Photo: Gareth Chaney
Deal: Former Taosieach Charles Haughey was Minister for Agriculture in 1966 when he helped broker the Anglo-Irish trade agreement which dramatically increased Irish carcass beef exports to Britain
Declan O'Brien

Declan O'Brien

British plans to exit the EU at the end of October represent an unprecedented challenge for the Irish beef industry.

Securing and expanding Irish beef exports to Britain was critical to the sustained growth of the meat processing sector over the last 70 years.

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However, the Irish factories had to go head to head with South America's giant beef packing industry in the 1950s and 1960s to win over British meat wholesalers and secure a foothold in what was then the world's largest market.

Yet, despite a degree of British reticence regarding the growth of Ireland's meat processing industry in the early 1950s, Irish factories had eclipsed the Argentinians to become the primary suppliers of beef to the UK by the early 1970s.

Deal: Former Taosieach Charles Haughey was Minister for Agriculture in 1966 when he helped broker the Anglo-Irish trade agreement which dramatically increased Irish carcass beef exports to Britain
Deal: Former Taosieach Charles Haughey was Minister for Agriculture in 1966 when he helped broker the Anglo-Irish trade agreement which dramatically increased Irish carcass beef exports to Britain

Ironically, however, the clock may be about to turn again, with the UK's departure from the EU creating the ideal conditions for a Latin 'reconquista' of the British beef market at Ireland's expense.

The British have long and close ties with Argentina, which pre-date their bloody dispute over the Falklands or Malvinas in the early 1980s.

British interests dominated trade and investment on the River Plate in the decades following Argentina's independence from Spain in 1810. These economic links deepened during the latter half of the century when UK firms and money helped develop the country's rail network.

This infrastructure facilitated the growth of ranching and grain production on Argentina's rich pampas and by 1916 it was exporting more than 400,000 tons of frozen beef.

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The country remained the dominant player in the beef export business up until the Second World War, with Argentinian output accounting for more than half of the beef traded globally during the 1920s and 1930s.

Much of Argentina's meat was processed by British-owned meat packing operations, with beef barons such as Britain's Edmond and William Vestey establishing huge operations in the South American state.

Ironically, the British investment in both the rail network and beef processing dovetailed with a sizeable migration from Ireland to Argentina.

The Irish emigrants were originally involved in wool production and became major land owners particularly in Buenos Aires state. However, they diversified into beef as exports to Europe expanded and Argentina's share of the global wool trade came under pressure from Australia and New Zealand.

Increased protectionism in the 1930s reduced the UK's beef imports, but Britain still purchased almost 600,000 tons of beef in 1938, primarily from Argentina and Australia.

Argentina remained the primary source of Britain's carcass beef imports when international trade recovered after the Second World War and into the 1950s. And although British beef imports fell to around 350,000 tons by 1960 as the UK significantly increased domestic output, close to 60pc of its beef import requirement was still supplied by Argentina.

Cattle dealers

Such was the influence of the South Americans on the cattle business in the 1950s that reports of increased shipments of Argentine beef to Britain were enough to knock prices in the Dublin Cattle Market and at fairs around the country.

The former ICOS executive, Maurice Colbert, recalled cattle dealers using the Argentine shipments line on farmers walking stock to the fair at Dungarvan. The dealers warned of disastrous sale prices because Argentine imports had collapsed the market in Britain, and they urged farmers to sell their cattle on the road.

The cattle dealers were invariably dismissed as "men of straw" by Colbert's ash-plant-waving father.

The South Americans' impact on the development of the Irish beef business, however, was not entirely negative.

Frank Quinn introduced Europe's first mechanical beef processing line in 1959-60 at his International Meats plant in Dublin's Grand Canal Street following a tour of beef processing facilities in North and South America.

Quinn, who was arguably Ireland's first beef baron, later maintained that the country's fledgling meat processing business needed to model itself on South American and Australian operations given that the Irish industry - like that of Argentina, Uruguay and Australia - was almost exclusively export oriented.

When battling for a greater share of the British market in the 1960s the Irish factories were clearly minnows in comparison to the Argentine meat industry.

While Ireland exported 60,000 tons of beef in 1963, Argentina shipped almost 530,000 tons.

Ireland's position on the British market was similarly dwarfed by the South Americans. Britain imported 235,000 tons of chilled and frozen beef from Argentina in 1963, compared to just 36,000 tons from Ireland.

However, Ireland had a number of crucial advantages over their South American competitors.

The most important of these was that the country was free of Foot and Mouth Disease - a distinction shared only by Iceland in 1950s and 1960s Europe.

This disease-free status was a key factor in Irish beef processors securing contracts to supply beef to the United States in the early 1950s, and subsequently to the American forces based in Europe. This business was critical to the development of the overall industry.

In addition, Ireland had an established track record of supplying more than half a million live cattle to Britain each year for finishing or slaughter. In fact, between a quarter and a third of all cattle killed in the UK during the 1950s and early 1960s were Irish-born.

It was therefore a reasonably easy progression for the British meat trade to move from accepting Irish cattle to purchasing Irish meat.

Increased government support was also a decisive factor in the expansion of beef exports during the 1960s.

This was particularly the case following Charlie Haughey's appointment as minister for agriculture in autumn 1964.

Haughey's strong support for the meat processing sector was articulated very forcefully and publicly within four months of taking office when he told a Belfast audience that the South had "a most efficient, modern dead-meat industry capable of handling all the meat exports that it would be practicable to consign from the whole of Ireland."

He went on to tell the meeting that the Irish food processing sector, although "in its infancy", had "enormous potential".

The Anglo-Irish Free Trade Agreement of 1966 provided the opportunity for the meat industry to realise this potential when the UK agreed to extend export support payments to carcass beef. These UK exchequer supports were traditionally restricted to live cattle exports from Ireland to Britain.

Under the trade agreement 25,000 tons of prime Irish beef qualified for the supports, which were known as deficiency payments. This was equivalent to paying export subsidies on around 100,000 cattle.

To add to the windfall for the beef processors, Haughey agreed that the Irish exchequer would pay subsidies at the same rate as the British supports on all prime beef exports to Britain in excess of the 25,000 tons covered by the trade agreement. As a result, close to £8 million was paid to beef processors under the subsidy schemes between 1966 and 1970.

As the report of the Store Cattle Study Group noted in 1968, the expansion in the beef industry was underpinned by a "massive injection of public money".

Carcass beef exports almost trebled in the years following the Anglo-Irish Trade Agreement as a consequence of increased supports, rising from 50,000 tons in 1965 to over 150,000 tons two years later.

Export supports

The growth in beef exports specifically to Britain was even more pronounced, increasing four-fold to almost 110,000 tons between 1965 and 1967, and averaging close to 100,000 tons up to 1971.

The provision of export supports undoubtedly helped Irish beef processors secure a greater share of the UK market, but an outbreak of Foot and Mouth Disease in Britain in the autumn and winter of 1967-68 also contributed to the growth in sales.

The outbreak was blamed on a consignment of carcass beef from Argentina, and all imports of 'bone-in' beef from South America were subsequently banned for six months by the British authorities.

Argentine beef exports collapsed as a result of the ban, falling from over 110,000 tons in 1967 to under 35,000 tons in 1968.

This provided an obvious opportunity for Irish companies to make up the shortfall, and by 1971 Ireland supplied 42pc of British beef imports and had taken over from Argentina as the UK's primary beef supplier.

Any hopes of an Argentine recovery in the British market were dashed when the UK and Ireland both joined the EEC in 1973 and access for South American beef was thereby restricted by external tariffs.

The shift in fortunes for Irish and Argentine beef on the British market had long-term implications for the meat sectors in both countries.

The greater focus by Irish processors on the UK meant that outlets on the continent which had been previously supplied with Irish beef were ignored because of the subsidised returns on offer in Britain.

Meanwhile, the Argentine beef industry had to concentrate on less lucrative developing markets following its exclusion from Europe.

However, the changed trading arrangements that are likely to follow Brexit - as well as the recent Mercosur deal - could herald a new era of competition between Irish and South American beef processors in Britain and possibly Europe.

This time around, though, Brazil rather than Argentina will probably lead the South American charge.

 

A mix of old and new operators

Beef processing was generally well dispersed during the 1950s and 1960s, with a mix of new slaughter plants and existing meat companies that diversified into the business from the pigmeat trade.

Among the biggest operators in the sector were International Meat Packers based at Dublin's Grand Canal Street, and Irish Meat Packers in Leixlip. By the late 1950s Frank Quinn had a sizeable stake in both operations. He sold the plants in 1969 to the Cork Marts group.

The other main players were Clover Meats which had plants in Waterford, Wexford and Limerick, Roscrea Meats, Clonmel Foods, Shannon Meats in Rathkeale, Co Limerick, Dublin Meat Packers in Ballymun, Premier Meat Packers in Sallins, Co Kildare, Kildare Chilling and Castlebar Bacon Company.

The Henry Denny Group which had factories in Cork, Waterford and Mountmellick was also involved in beef processing during this period.

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