ABP's full takeover of Slaney Meats and ICM worries Irish farmers

Mergers & Acquisitions

IFA President Tim Cullinan said the move is a further erosion of competition in the processing sector.

Posted on May 10 ,10:53

ABP's full takeover of Slaney Meats and ICM worries Irish farmers

After years in which ABP maintained more than a 50% share in both Slaney Meats and ICM, the recent takeover of both companies raises criticism from cattle and sheep farmers in Ireland. IFA President Tim Cullinan said the full takeover of Slaney Meats and ICM by ABP is a 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),” he said.
It comes five years after a joint venture in which ABP took a 50% share in the businesses. Tim Cullinan said this latest move 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.
He said returns to livestock farmers must be maximized from the market place. In order to achieve this, it’s critical we have full transparency on margins throughout the process.

“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,” he said.
The IFA President said the Beef Task Force has been very frustrating, particularly the failure of Grant Thornton to identify margins along the food chain. 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 characterized by weak competition and the deal is likely to weaken competition even further, through a ‘substantial lessening of competition’ (SLC).
“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.
On sheep meat, the report pointed out that Slaney/ICM is the largest processor of sheep/lamb meat in the State, with around 40% of the kill. While ABP does not process sheep/lamb meat in Ireland, it is active in this area in Northern Ireland and in England.

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