14 June 2002

Irish meat processors in rationalisation talks

RATIONALISATION talks are under way in the Irish meat processing industry in a bid to cut costs and improve competitiveness by reducing the number of plants.

A multi-million £ package is being discussed to compensate plants which would close down. The scheme would be operated by the industry, supported by banks, and would reduce processing capacity by about 40%. That would mean the decommissioning of almost half of the countrys existing 40 plants.

At present, three main players, AIBP, Dawn Meats and Kepak, control about 70% of Irish processing. But the rationalisation plan, as envisaged, would have a geographical spread and would not simply mean the elimination of smaller operators.

Although the number of Irish cattle slaughtered annually has fallen from 2m to around 1.75m, the over-capacity in the industry means that some plants have to close for one or two days a week.

A spokesman for the state agency Enterprise Ireland, which is involved in the talks, said that falling revenues and rising costs meant rationalisation was not an option for the industry, but a necessity. Restructuring the sector would also help producer prices and improve the competitive position of the Irish exports on international markets.

He said the current talks were "going very well" and he was hopeful of an agreement before the end of the year. &#42