Beef plants to negotiate large scale voluntary closure deals
It was reported yesterday that large scale closures will be agreed in a move that will reduce the capacity of the suffering industry by 40%.
A newspaper report said that while estimates of the number of plants to close varied, some sources said that as many as 15 out of the 30 plants nationwide could shut down.
The closures are expected to be agreed at a meeting of the Beef Industry Development Society next Monday (December 9). The organisation was set up by the beef industry to manage output by closing plants.
Factory owners who agree to close their factories will receive compensation payments from those who are staying in business. The remaining factories stand to make increased profits because of the overall reduction in capacity and the compensation has been worked out on this basis.
The Government has been asking the beef industry to approve a rationalisation plan since the publication of the McKinsey consultants’ report four years ago, but some beef plants have threatened to pull out because so little progress had been made.
Enterprise Ireland, which is handling the plan, said the first round of closures have already been agreed and would be finalised on December 9.
Each plant owner has engaged in individual negotiations and figures have been agreed for them to leave the industry under “a range of formulas”, according to Enterprise Ireland.
However, the state body insisted no individual facility was being targeted in the closure deal. “It is all done on an voluntary basis,” a spokesman said.
Farmers have recently been engaged in massive protests at beef plants around the country in a bid to highlight what they say are the poor prices they have been receiving for beef.
An IFA protest in 2000 shut down beef plants for three weeks and resulted in the farmers body being landed with ÂŁ750,000 in court costs.
The farmers’ leaders sought a price of 2.52/kg (90p/lb) for their beef, but prices are currently running at around £2.30/kg (85p/lb).
Farmers also complained about failure by the industry to promote the product properly.
In a recent address to a conference in Limerick, Agriculture Minister Joe Walsh fired a warning at both the farmers and the factory owners.
He said that, regardless of the rights and wrongs of the situation, any sector that was subject to ongoing disputes between producer and processor needed to “seriously examine itself”.
