'Control of beef industry in hands of too few' - Supermac's boss
The control of the beef sector is in the hands of too few and needs more competition, according to Supermac’s CEO Pat McDonagh.
Talks between the farming organisations and the meat factories are set to resume on Monday and McDonagh called on farmers to get more control of their own destiny.
“Farmers and everyone need to make a margin. But, if farmers don't make a margin on their beef at the moment, how can they be expected to stay farming. It has a knock-on effect, and they won't be able to spend in the local shop or buy fertiliser or new stock.
However, beef farmers are bracing themselves for further price cuts, as some meat factories cut the price offered by as much as €20-a-head of cattle to €3.45/kg, with farmers saying they need at least €4.00/kg to break even.
McDonagh said current beef prices are not all about Brexit or sterling weakness, but about factories’ margins.
“There is no point in one section of the industry, making a massive margin and other sections suffering. It’s not all to do with Brexit or sterling weakness, it’s to do with factories making margins above and beyond the normal.”
The continuing talks between the farming organisations and meat processors come after the Beef Plan movement called off a two-week protest outside meat factories over poor beef prices, with the group calling for farmers to receive a ‘fair share of the retail margin’.
Larger processors accounted for an estimated 94pc of the national beef kill in 2015, according to figures from the Irish Farmers Association (IFA), but the Chairperson of the Competition and Consumer Protection Commission has said there is no evidence of a cartel in the meat processing industry.
Isolde Goggin, Chairperson of the Competition and Consumer Protection Commission told an Oireachtas agriculture committee an allegation of a cartel does not provide a sufficient basis for the Commission to open an investigation or obtain a warrant from a judge in order that we can search the premises of businesses suspected of being involved.
“The CCPC’s criminal investigations team has examined a number of complaints and followed various lines of inquiry in the meat processing sector. So far, however, we have not uncovered evidence of a cartel.”
She also said sometimes there is a feeling that because there is a market price, a common price among buyers and sellers, that it is evidence of a cartel.
“It is not; prices being in line is not enough.” However, she said the Commission would continue to examine every complaint it receives.
McDonagh also said while the price of beef has reduced over the past 12 months, this has not been passed onto Supermac’s.
“We have not seen any reduction in our beef prices as a buyer over the last 12 months, and surprisingly with the reduction in the price of beef there has not been a reduction for us in prices.”
This week’s talks have led to some progress in key areas, with the meat factories agreeing to provide weighing scales at factories to allow live cattle to be weighed.
A review of the beef grading/pricing grid will take place and the terms of reference for the review were finalised yesterday between the parties.
Monday’s talks are set to focus on three outstanding issues when the parties reconvene.
It's understood the Minister for Agriculture Michael Creed is expected to attend next Monday's meeting at Backweston.