Farmers across the country have reacted with shock and worry of the plans, following the announcement of the agreement between the two companies. This new venture will see the establishment of a majority owned joint venture in the UK. The deal is still subject to approval by the relevant authorities as of yet.
The news comes with the recent uncertainty in the industry with Britain’s impending exit from the EU. The ICSA beef chairman, Edmond Phelan, says this decrease of competition in Irelands processing sector can only mean bad news for farmers and it will be them who will ultimately suffer.
He said “Decreasing competition in the meat processing sector is bad news for farmers. This deal will only serve to increase the all-powerful and dominant position of this small circle of players. Farmers struggle on a daily basis to get a fair price for their cattle from factories, this is just going to weaken their position even further,”. He said the news further consolidates that the only hope for the industry/sector is the increased competition between factories and live exports, which helps increase prices.
He added that “It proves once again that the only hope for the beef sector in this country is competition between live exports and factories. ICSA wants to see more support for the live trade from Minister Creed to give farmers that added option when selling their cattle. It is now more apparent than ever that it is the only show in town to deliver badly needed relief to hard pressed cattle farmers.”
He said that there is another alternative though, with the hope that processors might use their current power in the markets to push for higher prices, he said “The only other hope would be for processors to try to use their increasing dominance to push for higher prices from retailers when beef is scarce rather than driving down price to farmers when beef is plentiful. However, the evidence is factories are increasingly using their own feedlots to undermine independent farmers making a profit.”
In response to the announcement of the deal, the president of the IFA Joe Healy, said the lack of competition is the reason as to why farmers are concerned about the concentration of ownership. While adding that the major concern for farmers is whether they receive fair price returns from the market.
Michael Guinan, Chairperson of the ICMSA Livestock Committee, said that he is aware farmers are already worried about the current trend towards concentration in the sector. He said that although he understands why the companies would come to a decision like this, he says the potential dangers are narrowing sales options for farmers. He said farmers need protection from this potential outcome and stated that there is a need for concentrated and co-ordinated drive on the live exports trade in the country. He feels this would provide alternative avenues for farmers.
Mr. Guinan also said that farmers concerns are justified as lower prices are a likely result of the ongoing concentration in the beef processing markets. He concluded by stating that it is vital farmers are given assurances in relation to these issues facing them and added that it is important that the Minister for Ag, Food and Marine ensures farmers will continue to have options when selling their livestock. He said these options should include live exports.