EU court to rule on beef compensatory scheme

EUROPE’S top court will tomorrow begin a hearing on a case between the Competition Authority and beef producers over attempts to reduce overcapacity in the industry.

The EU Court of Justice in Luxembourg will decide if a scheme devised by beef processors to compensate firms to quit the sector runs contrary to EU competition laws.

The case was referred to the court by the Supreme Court in Ireland after the Competition Authority appealed a High Court ruling that rejected its challenge against the Beef Industry Development Society and beef processor, Barry Brothers (Carrigmore) Meats.

It arises from a 1998 study which established there was significant overcapacity in the sector, particularly in relation to beef processing.

It recommended the existing 20 beef producers be reduced to between four and six who would compensate other firms leaving in the industry through a special buy-out fund.

In 2002, 10 leading beef processors including AIBP, Dawn Meath and Kepak established BIDS to implement the report’s recommendations and drew up a rationalisation plan to reduce capacity by 25% per annum.

BIDS devised a compensation scheme whereby the society would provide a loan to processors remaining in the industry to help fund compensation for those exiting the business.

The Competition Authority ruled the arrangements were contrary to EU legislation.

Meanwhile, the ECJ will also adjudicate on a case where it must rule if Irish immigration law is contrary to EU law on the free movement of persons.

It will decide whether legislation which requires non-EU nationals married to EU citizens to have legally resided elsewhere in the EU before they can claim a right of residency in Ireland, is compatible with EU laws.