Barriers to live exports of cattle with Northern Ireland and Britain
Ireland has over 6.5 Million cattle, producing 2.2 Million calves annually. This
results in almost 1.5 Million cattle being presented for slaughter of which we
export almost 90%. Additionally we have approximately 200,000 – 300,000 of
live exports. Ireland has always been a provider of cattle for Northern Ireland
and the United Kingdom for hundreds of years. As a nation we are only
consuming approximately 10% of what we produce and in 2013 Ireland
produced over 472,000 tonnes of beef meat for export.
The United Kingdom on the other hand is only approximately 75% selfsufficient in beef meat and must import approximately 350,000 tonnes of
additional beef to satisfy national demand. Ireland supplies the vast majority of
this imported beef meat as you would expect due to our proximity. In 2013
Ireland produced and exported over 250,000 tonnes of beef meat to the UK
representing almost 70% of their total imports.
Over the last number of years our meat processors have introduced what they
call a quality bonus payment for cattle that fulfil certain “quality” criteria. This
bonus payment now stands at 12 cents/kg which represents an average bonus
of €40 to €60 per animal. In effect this is not a bonus payment but a penalty on
all the other animals produced by Irish farmers. An integral part of qualifying
for this bonus payment is the adherence to Bord Bia Quality Assurance Scheme
(QAS) which has many criteria for full eligibility; regarding the trade and
movement of animals the QAS states that animals must reside in a quality
assured farm for 70 days or more to qualify. Their scheme allows for animals to
trade freely between quality assured farms and if the cumulative days an
animal resides on such farms amounts to 70 days, then the animal still retains
its quality assurance status.
has resided 70 days or longer in the last herd
Goes directly to slaughter from that farm to a meat plant.
Have four movements or less in its lifetime.
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(i)
(ii)
(iii)
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The meat plants however have effectively usurped the Bord Bia Scheme and
will only pay “their bonus” if an animal;
The effect of these additional conditions by the meat plants is twofold;
(i)
it excludes the possibility of these animals being traded within the
last 70 days before slaughter and
(ii)
Effectively prevents factory fit animals being traded in livestock
marts.
The rationale for the meat plants introducing these additional conditions is
simple and clear. It is being done to subvert fair competition for livestock
and ultimately control prices.
These bonus payments we are informed by the Meat Industry are a customer
requirement led by the large British multiples arising from animal welfare
concerns. As outlined above, one of the main criteria to enable a farmer to
achieve this bonus is having only 4 movements or less in the animal’s lifetime.
Due to the structure of the Irish beef sector the smaller farms in the West
traditionally supply other farmers in the Midlands and East of Ireland and
Northern Ireland farmers with younger store animals. To facilitate this, these
animals require several movements on various farms before these cattle are
finally finished on the last farm before slaughter.
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ICOS contends that the further interference to the trade that is now evident
with the effective ban by meat plants in Northern Ireland on killing cattle from
the Republic in Northern meat plants is anti-competitive and in contravention
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ICOS believes that this measure along with the other measures introduced by
the Meat Industry is a form of market manipulation that ensures that
transparent price competition is stifled as much as possible. The Meat
Industry and UK multiples are fully aware that by manipulating the market in
the manner described, farmers are not getting a fair and true market value for
their stock. The UK market is the only European market where these effective
barriers to free trade in livestock exist. Ireland is exporting 200,000 tonnes of
identical beef meat to Continental Europe without the restrictive stipulations
that have been introduced for exports to the UK allegedly for quality and
welfare reasons.
of free trade principles within the EU. The graph below clearly illustrates the
effect of this market manipulation and its distortion on Irish beef prices.
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ICOS has a first-hand account of this from farmers in Northern Ireland. We are
aware of instances of Northern Ireland farmers with large numbers of
Southern born cattle that are fit to slaughter who cannot get them killed in the
Northern meat plants. One such farmer has told ICOS that he is facing financial
ruin as he has over 2000 southern born cattle in his feedlot. For the last 30
years this farmer has purchased his cattle from marts all across the West of
Ireland and always killed them in Northern meat plants. He now has been
effectively told he cannot get these animals slaughtered in the Northern meat
plants unless he takes a £150 discount as they were born in the south of
Ireland. This farmer now cannot export these animals back to the southern
meat plants as his herd has a movement restriction placed on his herd due to
TB regulations (closed slaughter only herd). This policy, if retained, will leave
this farmer and many others facing financial ruin.
Typically, these Northern farmers purchased these cattle from the livestock
marts in Balla, Ballymote, Mohill, Roscommon, Elphin, Castlerea Ballinasloe,
Athenry, Ballyjamesduff, Ennis, Birr, Nenagh and Roscrea, representing a
significant amount of trade for these marts but more importantly the local
farmers in these areas. Apart from the obvious benefits of having an additional
buyer around the ringside the “Northern buyer” effect lifts the entire livestock
trade the days these buyers are present as competition for stock heats up. This
benefits everyone in the livestock industry and ensures a fair and open price.
A founding principle of the European Union was to ensure free trade between
member states by the removal of barriers to trade. The Ireland-UK beef trade
is now seeing an effective re-introduction of national barriers to trade.
Inaction in this area by the EU and our national government is resulting in the
large retailers and Irish owned meat factories exercising undue control over
the price of beef.
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ICOS has raised these barriers to the free trade of live cattle on numerous
occasions at National and EU level only to be informed that the EU
requirement on the meat labelling regulation was to blame. This assertion is
not accurate as the retailers can easily label beef meat to comply with these
regulations when it suits them. ICOS has been informed that the retailers
themselves have conducted market research into the purchasing habits of
consumers in the United Kingdom and no adverse purchasing habits were
demonstrated when the label clearly illustrated the country of birth, finishing
and slaughter of animals. The BSE crisis during the mid 1990’s was the impetus
for the introduction of regulation 1760/2000 which laid down that compulsory
beef labelling be in place before the 1st of January 2002. There is now an
urgent need on the part of national government and the EU to review all of the
terms and conditions of trade relating to both beef exports and live exports of
livestock to the UK with a view to ensuring greater transparency and freer
competition. Irish farmers are entitled to get the full value of their stock and
not be exploited by questionable market restrictions introduced by meat
factories with the support of the large retailers.
On a recent visit to England on this issue ICOS has gathered evidence that Irish
beef and British beef is being sold at the same price per kilo in Tesco stores.
We photographed 2 identical cuts of brisket beef (pictures attached) one
labelled Irish and the other British, both prices were the same at £8.00 per kilo
but the Irish farmer had received between 15% and 20% less per kilo for his
beef. This equates to almost €200 difference per head. Where did the extra
margin go as the UK housewife was not getting any discount for Irish beef over
and above British beef?
In Britain over 45% of beef is sold through smaller abattoirs and food service
outlets that supply restaurants etc. and these retailers are solely concerned
with price and quality. One would think therefore that these outlets would be
a real opportunity for Irish born, British finished cattle. Unfortunately not so as
these smaller food service abattoirs, while independent rely on some of the
bigger Irish owned meat renderers to purchase their offal. Some of these small
abattoir owners have indicated to ICOS that these same Irish owned renderers
would mysteriously be unable to collect their offal if they killed quantities of
Irish born cattle but would have no capacity problems when they were not
killing Irish born cattle.
We then met with a number of large UK farmers to discuss potential purchases
of Irish cattle in their feedlots. These were farmers who traditionally have
purchased and fattened Irish sourced stock. They indicated to ICOS that no
Irish owned factory in England will kill Irish born cattle. These farmers had in
the past bought thousands of Irish cattle and fattened them in feedlots but
now having had so much difficulty getting them killed that these farmers were
being effectively forced to cease trading in cattle from Ireland.
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ICOS would now call on this Committee to lend its immediate support to
addressing the anomalies that have been highlighted in this presentation and
ensure that whatever measures necessary are taken urgently to rectify what is
a calamitous situation for farmers.
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