The Irish High Court has cleared the way for a significant rationalisation of the Republic’s beef-processing industry, reducing slaughtering capacity and paying some plants to close.
The strategy, which is aimed at tackling the problems of over-capacity which have caused some meat factories to work a three-day week, was agreed almost four years ago following lengthy negotiations between the processors, assisted by Enterprise Ireland, a state agency.
But the Irish Competition Authority mounted a legal challenge, claiming the deal’s implementation would restrict competition in the sector and harm consumers through higher beef prices.
In the High Court last week (28 July), Judge Liam McKetchnie rejected that claim, ruling that “no credible evidence” had been produced to support it.
He said he believed that the industry was largely – although with some exceptions – “in survival mode”.
A spokesman for Enterprise Ireland welcomed the decision and said the rationalisation plan would now be reviewed to establish how many of the country’s 40-plus plants were willing to leave the industry.
Under the plan backed by the High Court, slaughtering capacity would be reduced by the equivalent of 420,000 animals a year – 25% of the national kill.
It proposes that 15-20% of processors, mainly small, independent operators, would quit the industry.
They would be encouraged by a compensation scheme funded by remaining companies through agreed levies to be paid for each animal killed.
It was these levies that the Competition Authority claimed could result in higher beef prices – a view rejected by the judge.
Major players stand to gain most from the rationalisation, including Larry Goodman’s Anglo Irish Beef Processors and Dawn Meats, each with 20% of the market, and Kepak, which has a 16% share.