Joe McHugh (Donegal North East, Fine Gael) | Oireachtas source

I thank Senator O'Neill for raising this matter. It shows that the Senator's ear is to the ground because in my constituency in Donegal it is very much a concern in the farming community, not only regarding this proposed takeover, but in general regarding the price of beef in the factories. When Senator O'Neill's colleague beside him, Senator Comiskey, and I meet, we talk about that significant challenge in relation to price.

The Minister apologises that he cannot be here. Not alone will this go into the Official Report, but the Ministers and the officials will be listening to the Senator's contribution.

With regard to the proposed takeover raised by the Senator, there is a well established independent regulatory process involved in the assessment of such takeovers. This is to ensure that consumers, other businesses or, indeed, agriculture in Ireland does not suffer or that the proposed takeover does not lead to a reduction in competition in any individual sector. As the Minister for Agriculture, Food and the Marine, has stated, neither he nor any other Minister has any function in the process of assessing company mergers in Ireland.

The State, through the Competition and Consumer Protection Commission, has an existing and well established infrastructure for the assessment of mergers and acquisitions of business organisations generally. As part of this assessment, the Competition and Consumer Protection Commission examines any proposed merger or acquisition involving business organisations to ensure there is no substantial lessening of competition.

However, in situations where a proposed merger or acquisition breaches certain thresholds, the matter must be notified directly to the EU Commission. In such situations, my understanding is that the EU Commission itself may investigate the takeover or refer the matter back to the Irish authorities depending on the circumstances of the situation. As part of this process, the investigation of the proposed takeover will involve either a one or two stage investigation by the relevant authorities. At the end of the process, a number of outcomes are possible, including that the authorities may unconditionally clear the merger, approve the merger subject to remedies or prohibit the merger if no adequate remedies to the competition concerns have been proposed by the merging parties.

The structure of the Irish 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 to improve its efficiency. However, it is clear that any such rationalisation must avoid distorting competition within the sector. That is why the process of examining this particular proposed takeover is of utmost importance. The process of the investigation by the relevant authorities is a detailed and robust one. Furthermore, the process is a transparent one, with, if this matter is notified to the EU Commission, details of any new notifications being published on the Commission's competition website. This will allow any interested parties to contact the Commission and to submit comments on the merger. There are also timelines laid down for the completion of the different stages of the investigation to ensure that the investigation is completed in as timely a manner as possible for the sake of all parties.

The Minister is very conscious of the need for competition in the beef sector and other sectors in Ireland. I also 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 to place their product on and, of course, as Senator O'Neill said, a vibrant live export trade.

Live exports are an important means of providing alternative market outlets for cattle farmers in Ireland, thereby increasing the level of competition surrounding the purchasing of cattle. While 2015 was challenging in terms of live exports due to, for example, political difficulties in North Africa and new veterinary requirements regarding IBR in Belgium, it should be noted that increased domestic prices also contributed to a reduction in live exports for the year to 180,000 head, which was down from 2014.

It is expected that 2016 will see an increase in the export of live cattle due to the improving economic situations in other countries, such as Italy and Spain, which have traditionally provided an outlet for the export of Irish cattle. Additionally, there are currently three dedicated and three roll-on-roll off vessels approved for the carriage of livestock by sea from Irish ports and three more vessels are currently at various stages of the process for similar approval.

On a more general note, and entirely independently of this proposed merger, it is widely accepted that there are imbalances in the relative power of primary producers compared to other operators along the supply chain. With this in mind, the Minister is finalising regulations for the recognition of producer groups in the beef sector in order to permit farmers to benefit from the advantage of scale when it comes to selling their produce or purchasing inputs. I am sure this proposal had its genesis within the beef discussion group which Senator O'Neill mentioned earlier.

It is in the interest of all stakeholders in the Irish beef industry that there is healthy competition at all stages of production to ensure that the future of Irish agriculture is a positive one which allows the industry and the Irish beef sector to continue to grow in a sustainable manner. I am satisfied that the regulatory process for the assessment of mergers are in place and will ensure a thorough and independent assessment of the impact of the proposed takeover, having regard to the requirements of competition law.