Beef scheme not compatible with EU law, finds European court

THE European Court of Justice has ruled that a scheme run by beef processors to deal with overcapacity is not compatible with EU law and is a restriction of competition.

The long-running case was referred to the European Court after a Supreme Court ruling in 2007 following proceedings taken by the Competition Authority. The scheme involves compensating firms for leaving the industry. The aim of the scheme was to reduce capacity by 25% after a study commissioned by the Government and the beef industry in 1998 found significant overcapacity.

The report recommended the number of processors should be reduced from 20 to between four and six. It also proposed that the surviving processors should pay compensation to other processors who would close down their businesses.

The case was referred to Europe’s top court after a Supreme Court ruling in 2007. Proceedings had been taken by the authority against the Beef Industry Development Society and beef processor Barry Brothers (also known as Carrigmore Meats) in Conna, Co Cork.

The Supreme Court asked for the guidance of Europe’s top court on issues in an appeal by the Competition Authority against an earlier High Court ruling.

Responding to the judgment, Irish MEP Mairead McGuinness said it brought clarity to the issue, which had been “hotly contested” for years.

“If this opinion prevails in the court’s ruling there will need to be a return to the drawing board in relation to plans for rationalisation of the beef sector. It’s over 10 years since this process began and the only outcome is an adverse opinion of the Advocate General,” she said.