ABP has agreed the joint venture with Linden Food Group for an undisclosed fee. If approved early next year by the Competition and Consumer Protection Commission, the move will see ABP take control of more than a quarter of the Irish meat processing market.
Slaney Foods is comprised of the Slaney Foods International beef business and sheepmeat specialist Irish Country Meats. ICM processes c40% of Ireland’s total sheep kill.
The venture sees ABP return to sheep processing after a long absence from the sector.
ABP chief executive, Paul Finnerty, said: “At ABP, we have a very successful track record with joint venture projects over many years and we have high hopes for this new partnership. The respective companies share the same ambition to grow and develop in what continues to be a very competitive market environment.”
Linden Foods chairman Trevor Lockhart said: “Our objective, extending back to our co-operative roots, is to maximise the value of our quality beef and lamb and to deliver competitive and sustainable returns to our farmer suppliers.”
Slaney is jointly owned by the Allen family and Linden Foods in the North.
The move will see the Allens retire from the redmeat processing sector after more than 50 years to concentrate on their expanding wider business interests.
The Allen family shareholding will, in the first instance, be purchased by Slaney Foods.
ABP will then invest in Slaney Foods to form a joint venture with Linden/Fane Valley. The companies say the new partnership will not impact on the day-to-day operations of either Slaney or ICM with business to continue as usual on all sites.
However, IFA national livestock chairman Henry Burns said cattle and sheep farmers have concerns on competition and the concentration of the kill with the proposed venture.
He said the Competition and Consumer Protection Commission needs to undertake a full investigation and provide the necessary guarantees and undertakings to farmers around competition and market concentration.
Mr Burns said: “Competition in the beef and lamb trade is always a contentious issue between farmers and factories. Farmers are rightly concerned with the over dominance of a number of major players at both processing and retail level.”
Meanwhile, the ICSA has criticised the new price grid which ABP is expected to introduce in the UK, imposing a a £1/kg cut for cattle that are finished in England but which were born in Ireland.
ICSA beef chairman Edmond Phelan said the move will undermine any prospect of live exports of Irish cattle to the UK.
He said the move was “shocking”, and would make it impossible for farmers to rear cattle in Ireland with the hope of them being finished in England.
“It is clear that ICSA’s success in getting a live route opened by Stena to the UK has caused concern among beef processors who are doing everything in their power to close live exports,” said Mr Phelan.