Beef industry rationalisation talks proceed
The development was announced as the main players in the sector prepared to meet with Agriculture and Food Minister Joe Walsh at his invitation in Dublin last evening.
Rationalisation was not on the agenda for the meeting. It focused mainly on markets, with Bord Bia chief executive Michael Duffy outlining a five-year strategy to significantly increase exports to the Continent, and to target the upper end of the market.
However, six unidentified meat factories, three large and three small, are reportedly prepared to close in long-sought moves to rationalise the industry.
The BIDS is working closely with Enterprise Ireland to facilitate implementation of recommendations in the McKinsey Report and the Government Beef Industry Task Force.
These called for a major rationalisation, among other things, in order to underpin future viability of beef
production and processing in Ireland.
The BIDS, formed by the beef industry, said substantial progress has been made on proposals for funding an exit mechanism for those wishing to leave the sector.
These proposals will be referred to the Competition Authority. The work to achieve agreement on a rationalisation plan is ongoing.
John Smith, Chief Executive, IMA last night said farmers and factories must work together to address the many challenges ahead.
“Confrontation of the type experienced in October can be very damaging for producers and processors alike. The returns from the international marketplace, where 90% of our beef is sold, determine the prices which meat factories can pay for cattle. Accepting that reality, all parties must work together to produce the type of product the market is looking for and to remove the obstacles which are
impeding our access to the better priced markets,” he said.
IFA President John Dillon said lifting Irish cattle prices off the bottom of the EU price league towards the EU average price of 2.82/kg (£1/lb) must be an integral part of any plan to rationalise the beef processing sector.
Farmers have real concerns following recent media reports suggesting a concentration in the beef processing sector through rationalisation will enable the industry to manage output and therefore prices.
The Government and State Bodies such as Enterprise Ireland who are actively supporting the beef industry rationalisation plan must recognise that cattle prices are the only real measurement of performance in the beef
sector, he said.
Minister Walsh has already made it clear that some way must be found of avoiding the recurring difficulties between processors and their suppliers. Without trust there was no possibility of the industry fully developing into the future.
Regarding last evening’s special meeting, he said if they could get a better shared understanding of the market conditions and the factors which are influencing the situation, then an important first step will have been achieved.
