ABP announced today that it is to acquire the remaining 50% holding in Fane Valley Co-Op’s red meat business which includes Linden Foods in Northern Ireland and Slaney Foods and Irish Country Meats businesses in the Republic of Ireland.
The deal is subject to approval by the relevant regulatory and competition authorities and the businesses will continue to operate under their respective trading names for the foreseeable future.
“This development is the direct result of our successful joint venture arrangement, which has enabled all parties to improve their offerings to customers and to compete more effectively nationally and internationally, Frank Stephenson, Chief Executive of ABP said.
“The time is now right to build on this success ensuring that we continue to be a dynamic and innovative organisation as we face into the challenges of operating in a very competitive global marketplace; whilst also addressing the ongoing challenges of changing agricultural policies, Brexit and Covid-19.”
IFA, meanwhile, says the full takeover by ABP is “further erosion of competition in the processing sector”.
“This consolidation of the buying power for livestock in the hands of a few has to be addressed by the Minister for Agriculture Charlie McConalogue and the Consumer Protection and Competition Commission (CPCC),” its president, Tim Cullinan added.
“It renews the urgency for the Minister to implement the primary legislation to provide the office of the Food Regulator with the powers necessary to investigate and enforce at all levels throughout the supply chain.
“The CCPC has continually failed farmers in this area.
“The figures speak for themselves: breakeven prices for beef are €4.50/kg, but this is rarely achieved due to a combination of factors including lack of competition in the processing sector; high dependence on large supermarket chains; and the powers they have been allowed establish and the importation to our key markets of sub-standard produce.”
Mr Cullinan went on to say that in 2016, an independent report commissioned by the IFA on the joint venture raised serious competition issues for farmers.
“The main conclusion of the report was that the primary procurement market for farmers selling cattle in Ireland to the meat factories is characterised by weak competition and the deal is likely to weaken competition even further, through a ‘substantial lessening of competition’,” he continued.
“It was very clear on the competition concerns in the beef sector, the income pressures that exist for livestock producers and the impact that any weakening of competition would have on their livelihoods.
“The Irish beef processing industry is much more concentrated than that in England - which is about the same size as the Irish cattle procurement market - with large processors slaughtering more than 50,000 head of cattle accounting for 85% of the kill compared to 50% in England.
“In contrast, small and medium sized processors account for 43.3% of the kill in England and only 8.9% in Ireland.”