Beef industry holding talks
This follows the worst six months trading the beef sector has witnessed in 20 years.
Reliable industry sources confirmed that the talks have been going on for some time driven by the increased level of over capacity in the sector.
With the number of beef cattle for slaughter dropping from two million a few years ago to closer to 1.5m at present the issue of over capacity has been aggravated in the post BSE (Mad Cow Disease) environment that shut off markets to Irish processors.
Several years ago Enterprise Ireland produced a 700,0000 euro plan detailing a radical over haul of the sector.
It recommended radical surgery that involved slashing the number of plants by 25%.
Currently the key players account for 42 killing plants, and at least 10 of those should go.
While the talks have been at the highest level among the major players a spokesman for Larry Goodman said yesterday he was not in a position to comment one way or the other.
He confirmed Mr Goodman was out of the country for the past week and dismissed rumours of an impending deal among the beef processors.
One source close to the talks said a deal could be signed off by December.
No plant closures were likely in the current year and the source said it was also entirely possible that the talks could lead to a dead end.
Enterprise Ireland and the government are keen to see the sector modernised.
Huge amounts of beef are sold on a low margin basis of less than 2% and quality of product, despite the country's reputation, is often not up to the requirements of the international market for beef.
Some of these are small and in the context of the current market at least quarter of them could be shut without damage the country's slaughtering capacity.
Key parties to the talks are Goodman International, Kepak and Dawn Meats.
Combined they account for a huge portion of the beef sector which overall makes up about 90% of meat output in the Irish market.
The EI report, prepared by international consultants, McKinsey, concluded the number of players in the sector should be reduced from 16 back then to no more than four players while the number of plants then totalling 39 should be cut by 25%.
Since then more players have entered the market and currently 42 EU approved plants are operating in Ireland.
Elimination of the excess capacity would lead to immediate savings of over 24 million euro the report said when it was published in 1998.
Profits in the sector could be driven up by as much as 200m euro plus as a year, it said.
