Farm Ireland

Wednesday 21 February 2018

TLT troubles are bad news for mart trade

Declan O'Brien

Declan O'Brien

The Irish cattle trade was left reeling this week following the news that TLT had gone into receivership.

TLT International, owned by Paolo and Davide Garavelli, was among the biggest operators in the Irish live shipping business.

While exporting top class weanlings to Italy was their primary business, the Garavellis also moved significant numbers of store cattle and sheep.

Their exit from the trade, and the manner in which it has happened, is both sad and worrying.

It is never nice to see a business fail and the Garavellis have been frank and open about their difficulties.

However, this will be of little solace to the creditors of the business, which are primarily the country's farmer-owned and private marts.

The extent of the losses is as yet unclear and the receiver, Gearoid Costelloe of Grant Thornton, has been tight-lipped on the level of the company's losses but they are feared to be substantial.

It has been suggested that marts account for up to 18 of the top 20 TLT creditors, with some in the midlands, west and southwest reported to have significant exposure to the business.

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There are also reports of a small number of individual farmers who are listed among the creditors.

While losses at mart level are bad enough, you would like to think that most businesses would be able to take the financial hit. The same cannot be said for individual farmers.

The focus now for the marts and ICOS will be on engaging with the receiver to find out the extent of the losses at the company and recovering as much money as possible.

It has been suggested that the marts and farmers will be fourth in line in terms of being paid. The receiver is first to be paid, followed by the banks, taxman and finally farmers and marts.

Looking to the future, what impact will the failure of TLT have on the live export trade and on the cattle business in general?

TLT and other live shippers have been crucial for the cattle trade. They helped develop a strong market for quality weanlings in Italy and other continental countries, providing competition in the marts in the process. This was obviously reflected in stronger prices for farmers.

Exports of Irish stock to Italy have halved since 2010, dropping from 70,000hd to 37,000 last year.

TLT controlled around 70pc of that trade and their exit from the business is likely to mean a continued fall in exports to Italy.

It remains to be seen if the loss of TLT results in a significant reduction in exporter activity overall.

But if that happens, the only winners will be the factories; because the live shippers have been their sole competitors at the sales rings.

Irish Independent