Vol. 454 No. 6
10 Mr. Cowen asked the Minister for Agriculture, Food and Forestry the plans, if any, he has to ensure that successful Irish food companies will be retained in Irish ownership, given the recent development whereby Northern Foods acquired a majority shareholding in Green Isle. [11448/95]
Under company law there is no mechanism under which the State can intervene in the market to stop a private company being taken over by or amalgamating with another provided the provisions of competition legislation are respected. Furthermore, under European Union law, actions which would seek to discriminate in favour of national companies would be illegal.
In order to realise the potential of the food industry and maximise its contribution to job creation and economic development within Ireland, it is essential to develop companies with increased scale. Joint ventures, amalgamation and takeovers allow companies to develop such scale. In fact, a number of Irish firms have themselves acquired companies abroad as part of their development strategy.
I am grateful for the Minister of State's reply. Green Isle has been a resounding success and was put forward as a prototype for the development of Irish food companies. The report of the expert group on the food industry acknowledged that to encourage growth in this sector there is a need for multinational involvement and in that regard it referred to partnerships. Given that Green Isle was the strongest company in the fastest growing sector of the food industry and that its strategy dictated the loss of majority shareholding from Irish hands, does the Minister agree that a regrettable consequence of the development of similar food companies in the future will be that Irish majority shareholding will be lost?
The Deputy will be aware that as a private company the ultimate decision on ownership is a matter for the company. Since 1987 Northern Foods has owned approximately 36 per cent of Green Isle and assisted it in building up to market share and penetrating the British market. I hope this arrangement will ensure it can penetrate European markets. It is envisaged that Green Isle will handle the entire frozen foods sector of Northern Foods which will continue its mainstream activities in the chilled food sector. While I understand the Deputy's reservations, I am confident that this arrangement will maintain jobs and consolidate Green Isle's operations not only here but in Great Britain and on the Continent. There is no conflict of interest. Northern Foods and Green Isle will maintain their core work in the food industry.
I acknowledge that a decision on ownership is a matter for the company. My concern relates to the implications this will have for the building of a strategy for our food industry. If the strongest indigenous company in this sector — the fastest growing sector of the food industry — believes that in order to develop it must lose its majority shareholding, is it not likely that most food companies that follow the developmental approach adopted by Green Isle will end up in the same position? As a regrettable consequence of our strategy for the building of the food industry, will the majority shareholding of many of our companies be taken out of Irish hands? We all acknowledge that partnerships and joint ventures are necessary, but if the strongest company in a sector must give up a majority shareholding, what will be the position of indigenous companies in the future?
One of the reasons for its being the strongest company in the sector was the input of Northern Foods. I refer the Deputy to the food sub-programme intended to strengthen Irish companies, which includes capital investment, research and development, marketing and promotion along with human resources. The total expenditure under this programme will be approximately £640 million of which £283 million will come from public funds which should ensure Irish companies will remain competitive and become stronger. We must not forget that a number of large co-operatives are taking over companies in other countries within and outside the European Union, so we cannot object to others coming in to take over companies here. I hope this will prove to be a very rare occurrence and Irish food companies will go from strength to strength.
The Minister of State will be aware that much of the Expert Report on Food outlined that in the period under review, 85 per cent of grant-aid for fixed capital investment was non-repayable. Given the amount of money the Irish taxpayer has invested in this and other companies can he give the House any indication of what review is taking place within his Department so that a greater degree of such grant-aid is repayable assistance. People who receive such grant-aid in their first phases of development should be obliged to repay in the event of developments such as occurred last week?
This no doubt would be the responsibility of the monitoring committee set up to monitor the food subprogramme. All aspects of the food industry, including that mentioned by Deputy Cowen will be examined.
