Fane Valley Co-Op and ABP Food Group have been informed that the proposed 50:50 joint venture in relation to Slaney Foods, comes under the remit of the EU for investigation.
However, the relevant national authorities will also be involved in the process.
There had been little or no developments in ABP’s high profile tie-up with Slaney Meats for a number of weeks as all parties waited on notification from either the competition authorities in Dublin or Brussels as to who is going to investigate the case.
Stakeholders such as farm organisations are believed to be preparing their submissions on the case. It is also understood that IFA is set to put significant resources into fighting the merger.
It is believed the organisation has employed the services to a top competition expert to prepare their case.
The IFA say that ABP would have control of 30% of the beef kill around 40% of the sheep kill.
One insider estimated that if the deal goes through ABP would have the lion’s share of the Angus and Hereford kill in the country.
Commenting on the announcement today, Trevor Lockhart, Chairman of Linden Foods, which is owned by Fane Valley Co-Op, said now that the jurisdiction for regulatory approval in relation to the joint venture has been established, he looks forward to a positive resolution.
“Further growth (internationally) is key to the long-term success of the Slaney’s beef and lamb businesses and ABP, with its international sales footprint, is an ideal strategic fit.
“Structural change within Irish beef processing is a fact of life in 2016 and with the beef sector becoming increasingly globalised, further strategic developments of this nature within the industry are inevitable.
“After carefully considering our options, we are delighted that we are partnering with ABP following the decision of our current joint venture partner to exit the business,” he said.
Consolidation within the industry is absolutely necessary – ABP
Paul Finnerty, CEO of ABP Food Group, said consolidation within the industry is absolutely necessary in order for our sector to remain competitive.
“This consolidation trend is the result of an increasingly challenging international background where we compete against global players, many of whom have processing capacity multiple times that of the entire Irish industry.
“We also should not underestimate the looming risks of Mercosur, TTIP and Brexit – any of which will further accelerate a more challenging market environment, he said.
Paul Finnerty, ABP Food Group CEO
According to Finnerty, the long-term outlook is positive as global consumption of beef is expected to increase in the coming years.
However, he said it is important that markets such as China and the US are fully open so that we can take advantage of this demand.
“Similar to other Irish food sectors, we also need to build strong capabilities that can compete effectively on the international stage and this transaction is a step in the right direction,” Finnerty said.
