Dáil Éireann debate -
Thursday, 26 Feb 1998

Vol. 487 No. 8

Ceisteanna — Questions. Priority Questions. - Beef Marketing.

Willie Penrose

Question:

4 Mr. Penrose asked the Minister for Agriculture and Food the steps, if any, he has taken to deal with the decision by British retail multiples to withdraw Irish beef from their shelves; and the implications, if any, for the beef industry. [5351/98]

Mr. Walsh

I propose to take Questions Nos. 3 and 4 together.

I am concerned at developments in the UK market where most of the UK retail multiples have decided not to source beef originating outside Britain for the duration of the British beef promotion campaign recently launched by the Meat and Livestock Commission. The problem is being addressed on a number of levels. As an immediate response, I asked Bord Bia to intensify direct contact with British retailers and to provide a detailed analysis of the situation in that market. In addition, I arranged to meet senior management of the major UK retail chains and I have liaised closely with farming organisations and the beef processing sector. Meetings took place in Dublin the week before last with representatives of the largest UK multiple, and on Monday last I travelled to London to meet senior management of all the major UK multiples. The purpose of my involvement was to stress the seriousness with which the Government views these developments and to seek a return to normal trade in Irish beef on the UK market. I was assured at the meetings of the long-term future for Irish beef on the UK retail market and that the retailers will continue contacts with Irish exporters with the objective of restoring normal trading arrangements.

In the meantime, at my request Bord Bia is preparing a detailed strategy to defend our traditional place in the UK and other EU beef markets. At a political level, the Taoiseach has already brought to the attention of the British Prime Minister the problems difficulty of access to the UK market are causing for our beef industry. I have had the full support of my Government colleagues in this matter. I am also using all appropriate contacts at EU level to express our concerns about the campaign in the UK, the effects of which are contrary to the spirit of free trade and the Single Market.

The solution to the present difficulties lies in working together with the UK retailers who, while sensitive to the particular problems facing UK farmers, nevertheless recognise the quality of the product we offer and the commitment of our beef industry to supplying the UK market. Combined with a renewed and intensified promotional effort, this approach is the most effective way of enabling Irish beef exports to retain and ultimately expand market share in the UK.

Mr. Coveney

The Minister has the support of this side of the House in his efforts. I refer him to the Tesco advertisement in particular, called——

An Ceann Comhairle

It is not in order at Question Time to quote from publications.

Mr. Coveney

What does the Minister think of that advertisement, given that it is entirely against the spirit and letter of the common market? Tesco admits the Irish product of equal or better quality is 20 per cent cheaper, yet it stocks only British beef. We have a right to that market. Has the Minister put the case not only to Tesco and others but to his counterparts in the British Government? It is a disgrace that in a common market — we have an open market for British goods — we are blatantly discriminated against. What assurances did the Minister receive on this matter? I am aware he has no control over it, but when does he expect the problem will be resolved? Who is co-ordinating this effort? Given that the Minister has responsibility for this matter, what is the strategy of the Minister of State and chairman of the joint Oireachtas committee who went on a similar mission the week before the Minister and to some extent pre-empted his role? This is a serious problem which must be resolved.

Mr. Walsh

I accept Deputy Coveney's comments on the unfairness, incompatibility and, in some instances, illegality of what is happening in the British market. First there was a ports blockade, which was illegal. At that time I met my counterpart, Dr. Jack Cunningham, who admitted publicly in a press conference after our meeting, at which I put our case strongly, that the blocade was illegal and unacceptable, and that came to an end. The campaign then turned to the supermarket boardrooms and depots. Perhaps £50 million pounds worth of fresh food is stored in depots and if a problem arises huge losses will be incurred. We are a traditional supplier and, as a member state of the European Union, we have a right to the British market.

We have supplied that market for many decades, originally with cattle on the hoof and then with quality Irish beef. There is no question about the quality of our beef. The difficulty is that British farmers, who say they are getting a poor price for their cattle, use British supermarkets to target Irish beef. Apart from Summerfield, which still has Irish beef on the shelves, all other supermarkets have removed Irish beef from the shelves. We want to ensure that is restored immediately, if possible.

Senior management of British supermarkets say they have a difficulty with pickets and unacceptable behaviour from sections of, in their words, maverick groups of British farmers who have targeted Irish beef. They continue to take Irish beef, but it is not put on the shelves. Ireland traditionally supplies the UK with almost 100,000 tonnes of beef, a portion of which is sold from the supermarket shelves and the remainder goes through the catering and service trade generally. The most lucrative end of the market is the supermarket shelves and we want our meat back on those shelves as quickly as possible.

I have been assured that when the Meat and Livestock Commission promotion ends at the end of March there will be an opportunity to get our meat back on the shelves. The British have said they will not renege on their loyalty to Irish suppliers. They do not have much option because they are only 78 per cent self-sufficient in beef — they import 22 per cent, which amounts to 230,000 tonnes and we supply 100,000 tonnes. Every effort is being made to solve this problem. The Taoiseach communicated with the Prime Minister on the matter and the Tánaiste also had a meeting yesterday. The Minister of State, Deputy Ned O'Keeffe, visited the Meat and Livestock Commission and I visited the boardrooms of supermarket chains. While in London I spoke to the British Minister for Agriculture, Dr. Jack Cunningham, with a view to restoring normality in this market.

Mr. Penrose

The Minister has the support of the Labour Party in exploring every avenue to secure this vital and traditional market for beef farmers. Will he agree the action of the British multiples is the antithesis of the level playing pitch about which we hear much and which is the cornerstone of EU policy and the free market principle? Will the Minister agree it is ironic that, while we are preparing to vote on the Amsterdam Treaty, which is a further step towards integration, the Single Market is disintegrating before our eyes in so far as an excellent Irish product is being taken off the shelves by a fellow member state?

In view of the proposals in Agenda 2000, would it be prudent to seek to have the EU Commission investigate this matter, particularly as it relates to Articles, 36, 48 and 85 of the EU Treaty? I appreciate the Buy Irish Campaign was a different matter in that State aid was put into that campaign, but it would be opportune to examine this matter from the point of view of EU law and the importance of maintaining a level playing pitch. British farmers are experiencing difficulties and we are aware of the sensitivities involved, but the UK imports 22 per cent of its beef requirements and we produce a top quality product.

An Ceann Comhairle

A question, please.

Mr. Penrose

It is important to point out the illogicality of the position adopted by the multiples. I ask the Minister to pursue at European level the policy adopted by the multiples, in view of the free trade principles and the internal market regulations which are in vogue?

These will become pertinent in the near future in view of the decisions that might be taken in the upcoming referendum on the Amsterdam Treaty.

Mr. Walsh

I accept the case put forward by Deputy Penrose in respect of the apparent incompatibility with EU law, particularly Article 85. I raised this matter formally at the European Council of Agricultural Ministers and informally with Commissioner Fischler. I am informed it is being closely monitored and examined. My colleagues have also raised the matter with the competition Commissioner and I have raised it with the British political establishment. The difficulty with raising matters at European level is that it takes a long time, up to three years, to obtain a decision. Nonetheless, a decision must be made.

With regard to Irish beef producers being targeted by British farmers, I believe the wrong people are being targeted. We are not creating the problem of low incomes for British farmers. I am informed that these people want their Government to take action on their behalf and they use the example of how well farmers in this country are treated. They believe they are getting a raw deal in the UK.

Ireland supplies between 95,000 to 100,000 of the 230,000 tonnes of beef required. Beef, lamb and other products are being imported from South American countries, New Zealand and Australia. Apparently, these countries are not being singled out to the same degree as Ireland. I questioned this and was informed that the importation of Irish beef is very visible. Welsh farmers are most aggressive in respect of Irish beef, which is offloaded at Fishguard and transported through Wales by truck. To these people, lorries with logos which identify them as carrying Irish beef are similar to waving a red rag at a bull. However, that is no excuse. We are demanding nothing more than to allow consumers a free choice. As a compliant EU member state, Ireland maintains an open attitude in respect of consumer preference. We are demanding similar treatment in the UK.

This is a difficult situation. I met representatives of Bord Bia, processors, farmers and producers and informed them that when the MLC campaign concludes on 1 April there will be a requirement to identify the country of origin on produce. For the first time, beef produced in this country will be labelled as Irish. That has also happened in other European Union countries. I have asked Bord Bia to draw up a targeted promotional programme to cope with that. We have been able to avail of old brand systems and export beef without country of origin labels. However, from 1 April, we will have to be in a position to cope with the new requirements.