EU clears ABP Group acquisition of Slaney Foods
Oct. 10, 2016
by Erica Shaffer
Search for similar articles by keyword: [Mergers
the European Commission found that any potential increase of ABP’s and Slaney’s buying power would negatively impact competition.
DUBLIN – The European Commission recently approved a bid by ABP Food Group in Ardee, Ireland, to a acquire a 50 percent stake in Wexford, Ireland-based Slaney Foods despite concerns of potential negative impacts on competition in the Irish beef sector.
The Commission concluded that the acquisition would not adversely impact competition in the European Union’s single market. The commission’s investigation focused on three areas:
• The purchase of live cattle for slaughter in Ireland in addition to live sheep and lambs for slaughter in an area encompassing Ireland and Northern Ireland by ABP, Slaney Foods JV and Fane Valley;
• The sale of fresh beef, lamb and mutton in Ireland, including to industrial processors; sale of fresh lamb and mutton meat in Belgium, including to supermarkets;
• The collection of animal by-products in Ireland.
Based on its investigation, the Commission found that any potential increase of ABP’s and Slaney’s buying power would not raise competition concerns.
“The commission found that farmers in Ireland tend to sell within a rather broad geographic radius and that they are able to switch slaughterhouses if they can get better prices for their animals,” the EC said in a summary of the investigation. “Various slaughterhouses with spare capacity will continue to operate in Ireland, including in the southeast area, where the Slaney Foods JV cattle slaughtering facility is located. The commission thus found that farmers will continue to have sufficient alternative buyers for their animals after the merger.”
Regarding the sale of fresh meat, the commission found a strong number of competitors will remain in business following the merger, and therefore ABP and Slaney “will not be able to increase prices or impose detrimental conditions on retailers and industrial meat processors and ultimately on consumers.”
The Irish Farmers’ Association opposed the merger, arguing competition in the Irish beef sector is weak. Joe Healy, president of the Irish Farmers Association, had urged the Competition and Consumer Protection Commission (CCPC) to investigate the merger and potential impacts on competition. “The CCPC turned a blind eye to the serious competition issues in the Irish market for the purchase of cattle,” Healey said in a statement following the Commission’s decision. “They effectively washed their hands of the ABP/Slaney deal by leaving it to the Brussels authorities.”
Healey cited a 132-page report from PMCA Economic Consulting that examined competition in Ireland’s red meat sector and found that “Slaney would end up controlling nearly 26 percent of all cattle slaughtered in Ireland and more than 36 percent of the premium cattle market in Ireland.”