One Law for the Rich
Looking at profits generated all along the food chain, the figures speak for themselves and they tell a stark tale.
For those all along the line from the middle to the end, it’s a glowing report, with fortunes made for individuals and companies alike, millionaires being created – in fact so lucrative is the sector that in many instances companies are de-limiting their operation in order to hide their profits.
For those at the beginning of that chain, however, the actual food producers, it’s a very different tale.
At one level, Norbrook (the pharmaceutical company who produce animal health products) and Alltech (the feed ingredient company) are just two of the companies who make it onto Ireland’s rich list at this end of the food chain.
Keeping them company at the processing end and leading the pack is Larry Goodman’s APB group; others in this sector are Bert and Maurice Allen of Slaney foods and the Keating family, owners of Kepak.
At retail level the names of the Musgrave family who own Supervalu and Centra also appear on the rich list, but not to be outdone, for the first half of 2016 (a year in which farmers’ incomes have been decimated) Tesco announced an operating profit increase of 40%.
Yet back where it all starts, the farming sector upon which these profits are created get nothing from the market place, continually operating below the cost of production.
In this context, the decision of the EU Competition Authorityto unconditionally clear the purchase by ABP of 50% of Slaney Foods copper-fastens the view of many in the farming industry that there is one rule for the farmer (or should I say a whole book of rules, an industry of regulation built upon their backs), and a different rule for other sectors in the food chain.
This decision will mean that ABP and Slaney will control 28.5% of the cattle-kill and upwards of 40% of the sheep-kill in Ireland. Equally important it will mean that 50% of the rendering capacity for the disposal of animal offal in Ireland will be concentrated with one player.
This compares starkly with regulation for farmers in the Common Agricultural Policy (CAP), where it is stipulated that the maximum market share that the newly introduced ‘producer groups’ can have influence over is limited to 15%, lest they distort competition.
This decision, coupled with the limp Commission response where it ‘sees no need for regulatory action’ in relation to the dominant position of the retailers, will further erode the ability of farmers to generate a viable living from the land. Ultimately it calls into question the EU’s commitment to small farmers, which they continually laud as the fabric of our rural communities.