Oireachtas Joint and Select Committees
Thursday, 14 February 2013
Joint Oireachtas Committee on Agriculture, Food and the Marine
Horse Racing Ireland: Discussion with Chairman Designate
Mr. Joe Keeling:
I grew up on a fruit farm in the 1940s and 1950s. I went to Belvedere College. Mr. Dempsey just reminded me that in 1954 I went on a school trip to the National Stud where the excitement of seeing Tulyar was fantastic - everyone was so proud. I had not thought of it for years until Mr. Dempsey mentioned it. After Belvedere College, I went to the College of Commerce, Rathmines, for two years and then I joined the family company in 1963.
Keelings is a multinational company focused on growing, sourcing, shipping, marketing and distributing fresh produce from sources around the world for Irish, United Kingdom and European consumers. Keelings started producing fruits and salads in the 1930s, supplying its produce to the local Dublin markets. The 1970s saw the growth of supermarket retailing and importation of fresh produce from around the world. The company, as it operates today, was founded in 1973 to meet this change in demand.
Keelings is proud of its growing expertise and to this day is still an accomplished commercial grower. Our products include fresh fruit, salads, vegetables, flowers and logistical services. We are experts in our business with over 60 years experience in the fresh produce sector.
I have led the development of Keelings, from a fresh produce grower in the 1970s through to today's business which employs 1,600 people in Ireland, England and Holland. On 1 March, I will stand down as CEO of Keelings.
I started attending the races at the Fairyhouse Easter meeting 60 years ago. I was a director at Fairyhouse in the 1990s and also a committee member for the past three years. Keelings has sponsored the Keelings Strawberry Hurdle on Easter Monday for the past five years.
My first racehorse was Irish Firs, which was bred by my father-in-law and owned by my wife, and was trained by Mr. Willie Byrne who trained at the Phoenix Park. He won his first race in October 1982 and went on to win at a Cheltenham April meeting. Mr. Mick O'Toole trained Irish Firs and 20 winners in total for me. Fourth of July was the best of these. Other successful horses include Alone He Stands on the flat and Blueberry Boy over jumps. They both won six races and were trained by Mr. John Hayden and Mr. Paul Stafford, respectively. Blueberry Boy won a grade 2 at Punchestown. Mr. Dermot Weld trained Teach Nua to win two races for me at Galway and Elusive in Paris, trained by Mr. Michael Grassick, won three races on the flat in 2011-2012. I am a small breeder and have bred ten winners between Ireland and England.
I refer to the economic importance of the racing and breeding sector to the country. The horse racing and breeding sectors are of significant importance to the rural economy in Ireland. Irish horses, trainers and their riders have consistently won races at the highest international level and act as positive ambassadors for the country as the following points will illustrate. The sector employs approximately 16,000, almost all in rural areas. On average, three horses equals one job. Studies have shown the value of the sector to the economy at approximately €1 billion per annum. Ireland is the fourth largest producer of thoroughbreds in the world. Ireland produces over 40% of thoroughbreds born in the EU. Irish horses are exported to race and breed to over 35 countries worldwide. Our major racing festivals are significant contributors to their local economies. Both Galway and Punchestown have done studies to show that the value of their festivals is approximately €60 million and €80 million, respectively, to their local economies. The industry is a significant source of foreign investment into Ireland by international owners and breeders - high net-worth individuals. Horse racing accounts for approximately 80,000 tourist visits to the country each year.
Horse racing and breeding is exactly the sort of industry to help Ireland recover. It is labour intensive, based in rural areas throughout the country, environmentally friendly and export driven, and creates a positive international image for the country.
During my time as chairman, I would see the following areas as key priorities to develop and secure the thoroughbred and breeding sector in Ireland. We must achieve a long-term secure funding base arising from changes in the betting tax. We need to increase prize money to ensure that owners have an incentive to keep horses in training in Ireland.
We must reduce the costs of the sector, in particular from streamlining the activities of HRI and the Turf Club. We must focus on racecourse development. Many of Ireland's racecourse facilities are old and not on a par with facilities available at other major sporting venues in Ireland or other racecourses in the UK.
I am very grateful for the opportunity to meet the committee today and I pay tribute to the outgoing chairman, Denis Brosnan, who retires after a remarkable 22 years as chairman of HRI and its predecessor organisations. I pay tribute to HRI's chief executive, Brian Kavanagh. It is a very well-run business and I was very happy when the opportunity arose for me to consider the position. The passion of all the people in HRI has made a great impression on me and I look forward to being chairman for the next few years.
I welcome Mr. Keeling and wish him well in his new role, which is of vital importance to the overall industry. We are all very supportive of him and are here to help in every way we can because we all want to see our position as world leaders in the breeding sector and our fantastic worldwide reputation as great horse people and a country that excels in that sector maintained. I worked in Punchestown racecourse for four years and know all too well the importance of and the impact that racing, both national hunt and flat, has on the local economy. We always got the half day from school for the Punchestown festival. It is something that everyone in Kildare is raised with and aware of. Come the summertime, the flat season kicks in at The Curragh.
I have a slight concern about the numbers attending races. What are Mr. Keeling's views on that? Obviously, there are economic circumstances in the country that are beyond the control of HRI but how can we ensure we increase the number of people attending races? I completely agree with his point that we need to achieve a long-term, secure funding base arising from the change in the betting tax regime, but it is also key that people attend races for the industry to flourish. It is up to us here to implement the change in the betting tax regime sooner rather than later and secure that funding in some way to ensure the industry can grow and make the return it does. Too often, people refer to this as a sport. This is why the move back to the Department of Agriculture, Food and the Marine was so important because this is an industry. The figures stand up. Between 16,000 and 17,000 people are employed in the industry, 4,000 of which are based in Kildare. I am aware of how crucial this is with a value to the economy of over €1 billion.
What are Mr. Keeling's views on the commercial nature of the industry and the HRI given his business background? It is very exciting to have someone coming from Mr. Keeling's background where he has grown a business into a multinational. I am sure he has ideas about how HRI can become more commercial and build on the great work done in the past by those before him. I know work is proceeding regarding the overall cost savings between the Turf Club and the HRI. While we need changes in the betting regime, we also need to ensure we do things as efficiently as possible. That is a two-pronged approach that Mr. Keeling must oversee. There is no doubt the funding regime is important but we must be able to show that we are getting maximum efficiency and bang for our buck. The Minister needs to be able to stand over that to deliver the State funding. That has been the case up to now and the Minister deserves great recognition for having secured horse and greyhound funding over the past couple of years in extremely difficult financial times.
The Indecon report set a roadmap for the future. I am interested in hearing Mr. Keeling's views on the recommendations therein or what the report showed up. He said this industry is key in helping the country to recover. I always say that we do not need to reinvent the wheel in getting our country back on its feet. We need to concentrate on things we are good at. This is an industry in which we have expertise and for which we have the skills, climate, soil, horses and, most importantly, people. We need to ensure we protect that and do not take our position in the world, particularly in breeding, for granted. Mr. Keeling mentioned high-net-worth individuals who invest in and keep this industry going. Does he have any concerns that we depend on very few of them? How do we ensure the new batch of high-net-worth individuals invest in Ireland and not somewhere else?
What are Mr. Keeling's views on the tote and whether there is much that can be done to increase its outcome? I agree with his comments about his predecessor, Denis Brosnan, and the role he played. His commitment to the industry in excess of 20 years has been phenomenal and he is well deserving of a break. I wish Mr. Keeling well in his role. The committee will support him and will him on during what will be a very exciting and challenging time.
I will be very brief. Along with my colleagues, I welcome the delegation. Mr. Keeling mentioned that many racecourse facilities are old and not on a par with those elsewhere. Does he think the number of racecourse facilities in Ireland is sustainable?
I was going to ask that question. I wish Mr. Keeling all the best. I am very impressed with his CV. He is coming into an industry when the economy in this country and horseracing face major challenges. I remember going to the races at Gowran Park as a child. Even as a teenager, when my parents were not going, I always made sure I got a lift. It is other people coming through the gates and showing an interest in racing. We see promotions and extra family days at many racecourses but it is not sticking. We are not getting younger people to come to races. People will go to Galway, Listowel, Punchestown or Fairyhouse because it is a bit of fun, but we are not getting people through the gates for the one-off day meetings. The majority of race meetings, even those at my own track at Gowran Park, are running at a loss except for two or three big days they have per year. Fees from television stations are keeping the tracks going. I was watching racing in England yesterday and they were running in snow. I know it was an all-weather track but it was covered in snow and they were running in it. It is important for the industry because the betting industry is a major part of it.
How many staff are employed by HRI? Does the majority of funding come from profits from Tote Ireland? Do the racetracks have to pay HRI a levy? I acknowledge the presence of Mr. Brian Kavanagh. I know he has a Kilkenny connection and I wish him all the best. Trying to get younger people to come to races and to keep coming back is a major challenge for Mr. Keeling or anybody involved in HRI. They might go for a week's racing for fun but how do we get these people to go to one-off days on the country tracks?
I wish to follow up on and support what Senator O'Neill said about attendances. Mr. Dempsey spoke from a breeding perspective. For the industry to thrive, one needs owners but also spectators and fans because without crowds, one does not have excitement. It has become a profound problem. It is not just the lack of numbers. It also relates to the profile of racing fans. As Senator O'Neill said, we do not, regrettably, see younger people going racing. While we are diverting slightly, the greyhound industry has been relatively successful. It is a different scale and it is probably easier to be impressed by 2,000 people in Shelbourne Park than 2,000 people at The Curragh, but greyhound racing certainly repackaged itself and people who never had an interest in it will now go along for a night's entertainment. The horseracing industry needs to look seriously at why people are not switching on.
I recall being at an awards function a number of years ago at which a recipient spoke about what he felt was the exclusive language used by racing people talking about their sport. He said that if one did not feel comfortable with that language or know the terminology, one did not feel part of the club. Anyone can go to a greyhound race and enjoy a small bet on a randomly chosen dog, but people who are not big fans of horse racing sometimes feel excluded. They do not know the language of the industry and feel the people at the races know all the secrets. It is hard to break into that. We must sell racing from a mental point of view to the broader public. If we do not bring additional people through the gates, we will not succeed.
I raise the issue of ownership and syndicates. During the Celtic tiger period, every pub and club at every crossroads had a racing syndicate. Economic reality then set in. We need to get syndicates up and running again and that probably requires a new policy on the rules on numbers to form a syndicate. I have been involved in a few myself and know that the concessions to syndicate members are modest. We should be a bit more generous. We need more owners. We cannot depend on the flagship owners, although we desperately need them to remain in situ. Good luck to them, but my great concern is about the people who do not go racing. Are we failing to knock down the mental wall surrounding the industry? When I use the word "exclusive", I am not talking about wealth but about the difficulty for people who do not understand racing. If one does not know the difference between national hunt and flat racing or all-weather and turf racing, one can feel uncomfortable and decide simply to not go along. We need a major marketing package.
The cost of going racing is also an issue. Race courses have made efforts in their special packages and Mr. Keeling might well point out that there are certain days when there is no entrance fee and it still does not enhance the attractiveness of the product. Perhaps two years ago, I went to the big Deauville racing festival in France in August where the admission was €2. It was not for the upper stand or the lower stand, it was just €2. That is the admission fee during the month of the racing festival. On entering the track, the facilities were top class. It was not a question of having massive stands, but of straightforward facilities such as enough seats and benches for people to sit on. That is difficult to find at Punchestown or Galway.
Some of the answers to our problem are probably simple while others require deeper responses. We need to get more people going racing. It is our sport and if it was an Olympic event, we would win all the gold medals. It is a pity we cannot get more young people involved. I am very worried at the lack of young people going racing. It must be addressed as a primary project by Horse Racing Ireland.
I apologise for being late. I will keep my questions for Mr. Joe Keeling extremely brief. I welcome Horse Racing Ireland to the committee. We are all excited about Mr. Keeling taking the chair and looking forward to all the innovations and changes he is going to introduce. Legislation on betting is about to come before the Houses of the Oireachtas. We are living in a very different time to the period during which the tax on betting was reduced to 1%. I would be very interested for Horse Racing Ireland to educate us as we head towards debate on the legislation. What does Mr. Keeling think the percentage should be? I refer in the context of the Internet to Senator Paul Bradford's comments. It is all very well to say that people should go racing and get involved, but that all costs money. In December when the Minister, Deputy Simon Coveney, was here to discuss the budget for 2013, I made a statement on the race courses. Horse Racing Ireland has spent a great deal of money on the country tracks and, as Senator Paul Bradford said, if the Olympics of horse racing involves breeding we can say we are one of if not the best. However, what has been spent on Leopardstown and the Curragh and what do they look like from the perspective of England or France? I want to hear what Mr. Keeling has to say on plans for world class facilities.
Most people who breed good horses go to Newmarket to sell them. What can we do? How can Mr. Keeling educate us and how can we legislate or incentivise breeders to sell their horses here? We must think of the money, tourism and visits sales here would bring. While it is better for me to get sterling for my horse, it is unfortunate that when a horse is sold in Newmarket instead of Ireland it means we start to water down what we are good at. People want Irish horses.
I welcome Mr. Joe Keeling. I have had to jump between meetings and I ask him to forgive me for not being here for all of his presentation. I echo the comments which have been made and wish him well on an important aspect of our industry.
I want to focus on funding. Mr. Keeling said one of his priorities will be to achieve a long-term, secure funding base arising from changes in the betting tax regime. Does he have any comment to make on the background to the taxation? My understanding of the history is that originally the Fianna Fáil Government when Charlie McCreevy was Minister for Finance suggested a betting tax of 10% which was subsequently reduced to 1%. When the late Brian Lenihan attempted to increase the tax to 2%, the betting industry reacted very badly. It seems when one considers the share price of some of the betting companies that someone believes they are a good investment. It is somewhat churlish, notwithstanding that everybody wants to reduce his tax bill, to object to a modest increase to 2% when the original proposal was for 10%. Does Mr. Keeling have a view on that? I acknowledge that it is a question of fiscal policy, but Horse Racing Ireland is saying that one of its priorities is to secure long-term funding.
Proposals have been made in respect of online betting and some of the companies involved are already lobbying members of the committee. Interestingly, the companies are in favour of regulation which they believe is the best way to operate. They are relatively happy with the 15% that has been proposed. When I hear that an industry is relatively happy about taxation levels, my antennae go up. I have started asking why we are not looking for more money since online betting is proving to be even more popular than on-track betting. More and more people are gambling, whether that is a good or bad thing, and a lot of pressure is being put on people who turn on their televisions. Increasingly, betting companies are sponsoring major sporting events. They make it very easy for people to access their sites at the press of a button. They say that if a person presses their button, he or she will get €10, €20 or €30 to start them off. We all know there is no such thing as free money. The betting industry can cough up more money than it wants to. Is Horse Racing Ireland mandated to make suggestions to Government in that regard? It may be that it is totally outside its mandate.
My understanding is that the Minister has not committed himself to ring-fencing the money which will flow from changes in the betting regime. To fail to do that would not be a positive way to support the industry.
Thank you Senator. I would like to add my own question. It is clear from Mr. Keeling's background that he wants Horse Racing Ireland to operate on a commercial, business like footing. Will he expand on what he means by the streamlining of activities between HRI and the Turf Club?
Mr. Joe Keeling:
I will address taxation first. The taxation is ridiculously low. I remember a time in the 1980s when it was 20% in a bookie's shop and 10% at the track. It is inconceivable how it got to the stage it is at now. It all starts with taxation because that answers many of the other questions. We must be properly funded. Initially it will be 1% but we hope that over time that will go much further. If we want to secure a good racing industry it must be ring-fenced. One cannot make long-term decisions to invest in facilities if every year we are wondering what will happen in the budget. We need a five or ten year plan on funding so that we can plan. We need to invest huge money in the Curragh and Leopardstown. We can only do that if the funding is secure. We are addressing this issue and will be pushing it but it will be a difficult process. That is not going to affect the betting. We are not talking about 20% but it will generate a huge amount of money.
Since 2007 the attendance has gone down from 1.4 million to 1.2 million. That is a drop of 15% which is not a bad achievement considering the state of the economy and that we had three bad summers which affected attendances. It could be worse. There is not enough interest among young people. Most of those who go racing are over 50. Fairyhouse and some of the other courses are bringing schools in. There is a great deal of work to be done to encourage young people to go racing. We will address that.
I would like to improve the experience for someone who goes racing. I am passionate about the food which is very poor at many of the race courses. The experience in Galway is altogether different. The minute you walk in you feel welcome. Everybody will talk to you. If you sit down for a cup of tea or something to eat the person next to you will talk although you might never have met that person. Everybody shares whatever information they have. We would like to expand that. Punchestown is similar but Galway is unique.
We could do a lot to make the high net owners feel more welcome in Ireland. I have been meeting them. We need to make the experience unique for them because many of these high net worth people can be lonely. Whether a person keeps a horse in Ireland is down to people, not just the economics. This is particularly so in the national hunt. That depends on the skill of our trainers and facilities and the whole experience these people have here. I will be putting a great deal of effort into that.
We have to address the problem of selling horses in Ireland by encouraging people, by whatever means, to feel welcome. They need to feel that they will be well looked after and will get a proper price for their horse here. We would like to get far more sold here.
Have I addressed everything?
Mr. Joe Keeling:
That is a very good question but often when one looks at the smaller tracks they are actually making money. They do very well financially and have local teams, for example, Ballinrobe does a fantastic job. Kilbeggan does a super job. How could one take them out when they are profitable and local people support them? I am not saying that some will not go out. In the past we closed down Phoenix Park which was probably a tragedy because 25,000 people used to go to some of the big meetings there in the 1960s.
Mr. Joe Keeling:
We would like to see the Turf Club and HRI operate from one building. We will work towards that. It will not be easy but it is possible. We have to work better together because otherwise we cannot fund this business. It will generate huge savings and a better working environment. Most of the people in the industry are passionate about it. They want to do this. It will take time but we will get there.
Leopardstown and the Curragh are our two premier racetracks. HRI owns Leopardstown and the Turf Club is involved in the Curragh. How are HRI's negotiations with the Turf Club about the redevelopment of the Curragh going?
I was not sure what Mr. Keeling meant about the streamlining. This has been the untouched difficulty and challenge and I am delighted to hear that as chairman-designate he sees it as a priority. It makes absolute sense. I could never understand why there were two buildings and two roundabouts in one town operating in the same sector.
I propose that we inform the Minister for Agriculture, Food and the Marine that we have concluded our discussions with Mr. Dempsey and Mr. Keeling and that we forward a copy of the transcript of the debate today to him for his information. Is that agreed? Agreed.
Our purpose today is to conduct the hearings. The debate carries that. We can follow up on the issues raised in the debate in a later meeting. Members' priorities for these two gentlemen as they take up their respective roles will be quite clear from the transcript. That is important. We can say that the committee will be fully behind the nominations on the Minister's behalf. I am not sure that we can say so formally but it is quite obvious. That is what the committee is here to discuss and it feeds back through to the Minister, the Department and on to various others.
No. It is for a further discussion. It is certainly something on which we will engage with the Minister. Is that agreed? Agreed.
I thank both gentlemen for attending and for the good insight they gave in terms of their respective roles and their vision for the organisations they will head up. We wish them well. It is one of our flagship industries. The footage we often see of Ireland is about traditional music, people dancing, horses, Gaelic games, rugby and so on, but apart from the landscape this is one industry that sells the Irish story abroad.