Vol. 559 No. 5
131 Mr. Rabbitte asked the Minister for Agriculture and Food his plans to rationalise the beef processing industry; if such plans will be supported by the Exchequer through the payment to factory owners of compensation for closure; if such plans have the approval of the European Commission as State aids; and if he will make a statement on the matter. [26741/02]
Rationalisation of the beef processing industry is a matter for the industry itself and I have no direct function in the matter. I am aware that the beef processing sector has formulated plans to rationalise its own structures and bring about a greater alignment of slaughter capacity with cattle throughput. There is no question of Exchequer moneys being made available to compensate factory owners for the closure of slaughter facilities and therefore the question of State Aid under EU law does not arise. I am also aware that the Competition Authority is conducting an investigation of proposals to restructure the beef processing industry pursuant to the Competition Act, 2002.
From an overall policy point of view, it is generally accepted that the beef processing sector has excess slaughter capacity. This was one of the main findings in a study of the sector carried out by McKinsey in 1998. The findings of this study and the recommendation that excess capacity should be removed were accepted by the beef task force in its report, published in 1999. The task force, which comprised representatives of the Department, farming organisations, the beef processing industry, State agencies and SIPTU, in considering the McKinsey findings recommended that the industry itself should create a special fund to facilitate the rationalisation process and remove surplus capacity.
