Oireachtas Joint and Select Committees

Tuesday, 1 October 2019

Joint Oireachtas Committee on Jobs, Enterprise and Innovation

Competition Law and Trade Associations: Discussion

Photo of Pádraig Mac LochlainnPádraig Mac Lochlainn (Sinn Fein) | Oireachtas source

In preparation for this meeting, I reflected on the anger at the CCPC following its intervention during the beef protest. I read the comments of the various spokespersons and leaders of the farming organisations. The common thread was how ABP's takeover of Slaney Foods and the merger between Dawn Meats and Dunbia would impact on prices. In July 2017, a senior Irish Farmers Association, IFA, delegation met the CCPC. This was in advance of the merger of Dawn Meats and Dunbia, which took place in September of that year. The delegation conveyed the IFA's serious concerns to the CCPC. It referred to how studies conducted by independent competition consultants pointed to a strong body of evidence that competition in the primary procurement markets for cattle was weak and additional mergers were likely to weaken competition even further. What is the CCPC's response to these independent studies and why did that not lead to more action? I am not asking the witnesses to rehearse their decisions around the merger and takeover, but they will acknowledge that those events had an impact on beef prices.

Regardless of whether the witnesses agree, the wider point has to do with the anger of the farming community stemming from its perception that, although the CCPC failed to address what the community viewed as cartels in the beef industry, the community was threatened with legal action by the CCPC when it stood up to that injustice. One quote stood out in my mind: "The CCPC was like a lamb in dealing with processors but is acting like a wolf with a group of farmers who are on their knees." These are strong words and I would like the witnesses' response to them.

The CCPC has heard some of the calls for an ombudsman in this sector and has seen some of the reports at European level. The core issue is one of transparency in market returns, wholesale prices and profits across the meat chain from processing to retail. People do not believe that there is transparency. Various Oireachtas Members have produced Bills on transparency in recent weeks. As long as I have been a public representative, which is almost 18 years, the feedback I have always got from people involved in various parts of the agriculture sector is that they are like David against Goliath. They are the primary producers, yet they cannot get a price that keeps them on the land.

Do the witnesses believe the CCPC is fit for purpose where transparency around market returns, wholesale prices and profits is concerned? If it is not fit for purpose, what further powers does it need? Is a separate ombudsman for food necessary? I would genuinely like the witnesses' feedback about whether they feel that the CCPC has done its best with the powers it has. They made the point that the CCPC had a large area of responsibility and between 100 and 120 staff. Maybe a separate regulator for the sector is required. If the witnesses believe that the sector is not something that it can focus on solely, it would be helpful to point to a plan B.

I was interested in something referred to in the presentation, namely, the advice that producer organisations may be the way to go. I am sure that the witnesses understand that there are incredible anger and frustration in not only the beef sector, but various sectors. Has the CCPC met the farming organisations? There is a range of them. The IFA is the major one, but there is also the Irish Cattle and Sheep Farmers Association, ICSA, the Irish Creamery Milk Suppliers Association, ICMSA, the Irish Natura and Hill Farmers Association, INHFA, Macra na Feirme and so on. Has the CCPC met them to tell them that it has read their comments and acknowledges their concerns and that they should be facilitating a solution by encouraging the establishment of producer organisations? The witnesses mentioned that one producer organisation had been established recently. How many such organisations exist in the category in question?

Those were my three questions. I would appreciate the witnesses' responses.

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