Jackie Cahill (Tipperary, Fianna Fail)
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The decision by Brussels to allow ABP Group to take over Slaney Meats is inconceivable. The State reneged on its responsibility in this regard and the decision was left to Brussels to make. Farmers cannot understand how this decision was allowed to be made. It is the view of the vast majority of farmers engaged in the beef industry that this group controls a monopoly interest in the industry as it stands but it has been permitted to take out one of the remaining independent players in the industry. We have our problems with the British decision to leave the EU given the fluctuation in currency, but competition is being taken out of a trade that has been lacking in proper competition for a long number of years. Cattle drops have dropped significantly over the past number of weeks. Live exports reduced by 58,000 head last year and it looks like they will reduce further this year while, at the same time, calf registrations increased by 132,000. We have the twin prong of more calf registrations and fewer live exports, meaning more cattle coming through the system. The cattle kill over the past few weeks has been 35,000 or 36,000 head. It has been proven over a long number of years that when the cattle kill rate exceeds 30,000 head per week, prices paid to farmers fall significantly.

I also question the commitment of many people in the industry to the live export trade. The Minister of State will quote figures about the percentage of the industry ABP Group has and he will refer to the various markets open around the world. Thankfully, the Turkish market opened in recent weeks but what it has taken is only a drop in the ocean. Significantly more live exports are needed to generate competition in the trade. I attended my local mart last Monday. The price of Friesian stores has dropped over the past month or six weeks by between €200 and €250 per head. There is a complete lack of confidence in the beef industry. The British decision is partly to blame for the lack of confidence but the fact that Slaney Meats has been taken out of the equation and another independent outlet is gone has greatly added to the lack of confidence.

Farmers' confidence in the industry has been shaken. The beef forum made a number of recommendations, none of which has been implemented. We were promised a review of the beef grid, the lifting of weight restrictions and an examination of the age restriction under the 30-month rule. None of this has happened and, therefore, farmers' confidence is at an all-time low. This is a vital industry for the country and it is imperative that the primary producer has confidence in the industry. However, confidence is evaporating by the day. Farmers selling Friesian cattle into the factories are lucky to receive €3.30 per kilogramme. That is nowhere near break even. Unfortunately, the ABP Group is taking over an increasing number of feed lots, which have many cattle, around the country. In previous years, cattle became scarce approaching Christmas and the new year but now the group is releasing cattle from its own feed lots and manipulating the market to ensure there is no price surge. This happened last winter and prices remained static throughout the spring. There was no price lift for winter finishers. Unfortunately, winter finishers have taken so many batterings that they have no confidence to purchase stores, which is a huge contributory factor to the fall in store prices over the past month to six weeks.

Farmers cannot understand how this decision was made to allow Slaney Meats to be taken over by the ABP Group and why responsibility for the decision was relinquished to Brussels.

Andrew Doyle (Wicklow, Fine Gael)
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I thank the Deputy. I will take him through why this happened in the way it happened.

As a primary beef producer, I am acutely aware of the importance of competition in all sectors, including the meat processing sector, in ensuring an economic return to primary producers. There is a well-established regulatory process involved in the assessment of takeovers to ensure that consumers, other businesses or, indeed, agriculture does not suffer or that the proposed takeover does not lead to a reduction in competition in the beef sector.

The State through the Competition and Consumer Protection Commission, CCPC, has an existing and well-established infrastructure for the assessment of mergers and acquisitions of business organisations generally. As part of this assessment, the CCPC examines proposed mergers or acquisitions involving business organisations to ensure there is no "substantial lessening" of competition. However, in situations where a proposed merger or acquisition exceeds certain thresholds, the matter must be notified directly to the EU Commission. This merger has been investigated by the Commission through DG Competition and they have found that the acquisition would not adversely impact effective competition in any of the markets where these companies are involved, for example, the purchasing of live animals for slaughter, downstream selling of fresh meat or the collection of animal by-products. The Commission’s investigation focused on the beef and sheepmeat sectors in Ireland and a comprehensive questionnaire was sent to stakeholders in the industry, farming organisations and State bodies. My Department responded to this by providing detailed statistics on these sectors, especially in respect of slaughter numbers, prices and live exports.

The structure of the beef processing sector has been the subject of much discussion over the years and one of the recurring themes has been the question of rationalisation in the processing industry. However, the issue of rationalisation must be discussed in the context of ensuring that the question of competition within the processing industry is not compromised. This is why the process of examining this takeover was of the utmost importance. The process of the investigation by the relevant authorities, in this case the European Commission, is detailed and robust, with a core objective being to ensure competition within the sector is not unduly affected by the proposed takeover. The Commission is anxious to ensure that the process is sufficiently transparent with details of any new notifications being published on the Commission’s competition website, which will allows any interested parties to make a submission.

I am very conscious of the need for competition in the beef sector in Ireland, as for any sector of an industry, to ensure that producers and all those involved in the different stages of production can achieve the best price for their product. I emphasise that in addition to the number of meat processors, competition in the marketplace is dependent on a number of factors, including the number of markets available for sellers of Irish beef on which to place their product and of course a vibrant live export trade. To that end, the Minster, Deputy Creed, has worked tirelessly since taking office on opening up new markets to Irish beef with the assistance of relevant State bodies, including Bord Bia, as did his predecessor.

Additionally, 2015 saw Irish beef exports increase by 6% to €2.41 billion from 2014. Access to new international markets including the US, Canada, Oman, the Maldives and Iran was secured during 2015.

Bernard Durkan (Kildare North, Fine Gael)
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I thank the Minister of State.

Andrew Doyle (Wicklow, Fine Gael)
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This year the Minister, Deputy Creed, and I undertook a trade mission to China, South Korea, Vietnam and Singapore in order to progress our efforts to open these markets to beef and sheep meat from Ireland. As we speak, the Minister is commencing a trade mission in North Africa as one of the key objectives in the promotion of both Irish beef and live cattle. Regarding the latter, to which the Deputy referred-----

Bernard Durkan (Kildare North, Fine Gael)
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I thank the Minister of State.

Andrew Doyle (Wicklow, Fine Gael)
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-----1,700 heavy bulls and 3,300 weanlings have been exported to Turkey, and another boat is supposed to load in the next week or so.

Bernard Durkan (Kildare North, Fine Gael)
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I thank the Minister of State.

Andrew Doyle (Wicklow, Fine Gael)
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I will address the remainder of the question and some of the other issues in my final minute.

Jackie Cahill (Tipperary, Fianna Fail)
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I appreciate the Minister of State's answer, but farmers out there do not believe that this decision was good for the industry. This group has stopped live exports to the UK being economically viable. We cannot get quality assurance for our cattle in the UK to have these Irish forward stores slaughtered there. This group has purchased a significant number of calves in the last few years in this country to rear them so that it will control the market from start to finish. Every decision the group is taking shows it is looking for a monopoly within the industry. Unfortunately, this is being allowed to happen. How much of Bord Bia's budget is being spent on securing live exports? As I mentioned, the fact that we cannot get our forward stores into the UK on a level playing field is a huge detriment to the marketplace. While I accept that the Minister is trying to get extra outlets for our cattle, by this decision we have allowed an independent player to be taken out of the industry. In addition, this group controls the rendering industry in the country, has a controlling interest in that sector and the large amount of tonnage and offal created by beef processing and can control the number of cattle killed on a given week. It is inconceivable that this one group can be allowed to control the marketplace to such an extent.

As I said, figures produced last week have shown that since 2010, €78 million has been taken by the beef grid out of farmers' pockets. We were promised when the beef grid was introduced in 2010 that it would be cost-neutral, but all the analysis now shows that the beef grid costs farmers roughly €20 million per year. As I said earlier, we have had the beef forum and its recommendations, but none of those recommendations, which would be beneficial to the primary producer, has been implemented. As a matter of urgency, the beef grid needs to be reviewed and the age and weight restrictions reconsidered, as the beef forum recommended. It is absolutely imperative that the sanctions against our forward stores in the UK are lifted and that we get a level playing field, irrespective of the British decision to leave the EU.

Andrew Doyle (Wicklow, Fine Gael)
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I appreciate the Deputy's commitment to this industry and I fully agree with some of the opinions and concerns he has outlined. I cannot answer his question about the budget for live exports but I can try to find that out. I do not know how it breaks down. The trade mission to Morocco and Algeria, which will be led by the Minister, people from the Department and Bord Bia, will be multifaceted. Beef and sheep meat exports and live exports are part of it. As the Deputy will be well aware, the beef grid was an agreement between the meat industry and at least one farming organisation. I do not know if any more than one farming organisation was involved. I think the forum has agreed that this be considered, and I think the Deputy is correct when he says the forum is the best chance of securing a long-term industry. It is my sincere opinion that all stakeholders in the industry, from primary processors and secondary processors right through to the retailers, should sit down and decide that there is nothing wrong with the product but that everybody in this production chain must have a decent, reliable, steady income. Volatility, no more than we have seen in the dairy industry, is the enemy of securing a future for the sector. Everybody should sit down, whether that involves some form of forward selling or contract selling, as is being talked about in the milk industry, to try to give people certainty when they look at their options and go to their creditors and banks and decide that this is the industry they want to finance. We all must be part of this, and producer organisations are very important if we can get them off the ground. They offer an opportunity for Ireland's beef farmers, who are probably by far our biggest industry, and I hope that sector can be put on a professional footing all the way from the farm gate to the table plate.