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.