ICOS calls time on 'unfair credit'
The level of credit being offered by some marts was described as an "ongoing challenge" to the sector over the past year by the head of ICOS.
Speaking at an Oireachtas Agriculture Committee hearing into the collapse of TLT International, ICOS chief executive Séamus O'Donoghue said the credit levels provided to live shippers by some marts had been a cause of concern.
The committee heard that the final amount owed to the marts was still not known, but Mr O'Donoghue told the hearing that the figure was estimated to be between €3m and €4m.
While the ICOS leader accepted the failure of TLT International had come as "unwelcome shock", he said all of the affected marts had adequate financial reserves to deal with the problem and that all customers would be paid for their stock.
Mr O'Donoghue claimed that the tighter bank borrowing arrangements had resulted in marts coming under greater pressure from live shippers to offer attractive credit lines.
He said this had particularly been the case where marts were competing with one another for live shipper business.
He told the hearing there was scope in the sector for mart "consolidation and rationalisation" and this process would reduce some of the competitive pressure between the marts, while also giving them greater economies of scale.
Michael Spellman, chairman of the ICOS marts committee, described the credit arrangements that were put in place for live exporters as "totally unfair" since they put other buyers at a competitive disadvantage when purchasing stock.