I welcome the officials from the Department of Agriculture and Food and the representative from Bord Bia who are with us today to update the joint committee on COM (2006) 487, a proposal for a Council regulation on the marketing of meat of bovine animals aged 12 months or less. Mr. Luke Mulligan and Mr. Seamus O'Flaherty represent the Department of Agriculture and Food and Mr. Mark Zieg represents Bord Bia. Before asking Mr. Mulligan to make his opening remarks, I draw the attention of witnesses to the fact that while members of the committee have absolute privilege, the same privilege does not extend to them. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, by name or in such a way as to make him or her identifiable. I invite Mr. Mulligan to make his opening remarks.
Scrutiny of EU Proposals.
Mr. Luke Mulligan
I thank the joint committee for its invitation. It is always good to come to discuss business with which the Department is dealing and see the level of interest shown in it. I have attended on one or two previous occasions and found this to be very much the case.
I will introduce the proposal. As I gather the committee secretariat has circulated a copy of my notes, I will skim through some aspects. The purpose of the Council regulation is to provide for the development of a regime for the identification and labelling of veal, of which very little is produced in Ireland. However, our beef production is significant, at approximately 570,000 tonnes per year, of which we export over 90%, mostly to the European Union. We only export approximately 7% to third countries.
The current beef labelling rules are comprehensive. They also apply to veal, in respect of which there were no special rules heretofore. All beef produced here or imported from third countries must be labelled with the country of origin, including all information on where the cattle were born, reared and slaughtered.
Ireland produces very little veal, probably less than 200 tonnes, most of which is exported to Italy. Domestic consumption here, mainly through the catering sector, is extremely low. Production in the European Union is dominated by the Netherlands which exports 200,000 tonnes. Veal is also produced in France, Italy, Belgium, Germany, Spain and, to a lesser extent, Denmark. The markets that we might target to increase the amount of veal produced would be Italy which imports about 90,000 tonnes, France which imports 45,000 tonnes and Germany which imports 40,000 tonnes.
Veal meat falls into two categories which to date have not been defined as such: younger calves aged six to eight months, the meat of which has heretofore in the European Union largely been referred to as white or milk veal; and older calves aged up to 12, 13 and, in some cases, 14 months, the meat of which is known as pink or rosé veal. Both categories are produced under a specialised indoor rearing regime involving bucket feeding. Absolutely no grass is used, with white veal being largely generated from milk fed calves, milk being a natural associate. The production of pink veal involves the application of a high degree of concentrates which creates the desired colour and texture in the meat.
Different countries have their favourites. Some will opt for milk veal, while others will go for veal meat which is nearer to beef but which has a different texture. Apparently, there has been confusion in the EU market over what constitutes veal. There has been confusion over the exact age of animals used in veal production and the market is being stretched.
Veal is a high quality product which attracts premium prices. Those strongly interested in the market do not want it undermined. Essentially, they want to ensure the consumer who has been attracted to purchase veal will stick with it because it remains a high quality product and does not sometimes come from an older animal or an animal which has not been fed using the same regime, ensuring the same texture and quality. As a result, the main EU producers exerted pressure on the Commission to introduce proposals to identify a clear definition of veal, particularly as to its age and the regime used. The Commission carried out considerable research and was particularly interested in the expectations of consumers of veal. The result of that research is this proposal which definitively identifies two categories: calves aged up to 8 months and those aged over 8 months but less than 12. Beyond that age meat is considered to be beef. It provides, therefore, that the meat of an animal aged 13 or 14 months will no longer qualify to be described as veal and that the other two categories will be distinguished in some way which heretofore was not the case in a large number of countries.
Both myself and Mr. O'Flaherty attended the Council working party meeting last October and there was general agreement that this was a good idea. A number of officials thought it was too complicated and too much to put in to achieve a relatively simple objective but, at the same time, as legislation evolves, it automatically becomes complex once the details are teased out. We largely agreed with the proposal, even though we had no significant interest in it, but we do not know when Ireland will further develop a veal market. Bord Bia and Teagasc are working on pilot projects in this area and we are continually examining the development of our beef markets and niche markets, in particular. Veal is a niche market. There is no tradition of slaughtering animals at that age in Ireland and, therefore, it has been slow to take off relative to other niche markets but, at the same time, it may be a possibility in the future.
While we largely agreed with the proposal, we had two difficulties. An annexe outlined the two types of veal in which Irish calves under eight months were classified as veal but, because we did not provide a title for those aged over eight months, they were classified as beef. That would be unsatisfactory going forward if we wanted to market eight to 12 month old bovine meat as veal in Ireland. That was a technical anomaly which crept in because of a lack of a definition. The EU officials thought they had consulted us in the Department but they had not. I am not sure who was consulted about what applied in Ireland. That issue was clarified quickly and an amendment was made. If the proposal was to go through, animals aged up to eight months would be classified as veal in Ireland and those aged between eight and 12 months would be classified as rosé veal rather than pink veal. This is because one farmer is producing and exporting veal under that title and, therefore, we wanted to accommodate him. We consulted industry interests and they were quite happy with the definition.
The other more significant problem we had with the definition concerned animals aged under 12 months slaughtered in Ireland where the meat is not classified as veal because they are killed in the context of our depopulation policy. Calves are sent to factories more by accident than by design and they are not reared under a veal regime. The regime I described is expensive and it must be operated correctly. The pilot projects run by Bord Bia and Teagasc demonstrate this is a tricky business. A farmer must get it right for the market and we do not want what would apply if the regulation was applied to all beef aged under 12 months produced in Ireland because it would have to be marketed as veal. However, one would have a product with more beef characteristics because it was not reared under a veal regime.
We suggested that where the vendor wishes to market meat as veal, claim the higher premium and showcase the product as veal, he or she should be required to comply with these regulations. However, if the animal was not reared to produce veal and it was not intended to market it as veal, the farmer could continue to market it as beef, as is the case currently. That would safeguard the veal market.
We also thought it would be an administrative burden. Significant labelling is required for beef and identification and traceability involve a great deal of work. The regulations will add two classification codes to the five already in place. If somebody is not slaughtering an animal for veal, why put him or her to that trouble? Unfortunately, other member states and the Commission took the view that we were seeking a derogation, which is a dirty word, but that was not the case. We stated this is a high quality market that we wanted to protect. We received support from other member states, although a number were more anxious to adopt the regulation rather than tinkering with it and, therefore, their support was not quite as strong. We received strong support from the UK and Denmark, which have similar veal markets to Ireland and process more non-veal calves.
This issue is still in the pipeline. We have written to the Commission and held bilateral discussions with its officials. They acknowledge our point but we do not know what way it will go. It is on the agenda for forthcoming SCA meetings and it will be before the European Parliament on a consultative basis. The Parliament will issue its view in the next month or two. We expect, following consultation, to negotiate a good compromise and this will probably will be done during the German Presidency
I thank Mr. Mulligan and his colleagues for attending. The regulation is confusing. Does it make more sense to have one definition of "veal" for the consumer? It would be obvious to the consumer which category it would fall under rather than having an array of categories. If Commission approval is granted, there could be three separate categories for animals aged under 12 months — veal, rosé veal or beef, which would be extremely confusing for the consumer. While this will not affect the vast majority of farmers, it looks to them like another example of Europe introducing a layer of bureaucracy that does not make a great deal of sense. Will Mr. Mulligan elaborate on this point?
Mr. Mulligan touched on the work being done by Teagasc and Bord Bia to develop the veal industry in Ireland. The officials are conscious of this in negotiations at European level, for which they should be commended. What is the potential for developing the industry? It is a premium market but sufficient animals are in the national herd to serve the market. What practical steps are being taken to develop it?
The enforcement of EU beef labelling regulations is a significant problem within the catering industry in Ireland. The issue of substantial transformation also presents an anomaly at EU level, although that does not specifically relate to veal. However, another layer of labelling will be introduced. The two current layers of labelling for the beef industry are not working but a third layer is proposed. Will this lead to less enforcement of beef labelling regulations?
I thank the delegation for its presentation. The regulations are complicated and confusing. At the end of the day, the protection and showcasing of the product is important to ensure what is marketed as veal is clearly the product the consumer expects to have specified characteristics. The third category relates to the herd depopulation. Will Mr. Mulligan comment on the quantity involved? Is a great deal of bureaucracy and red tape being created?
I am in agreement with the general principles in terms of the protection of a quality product.
My only other comment concerns the development of the veal market, which is now a niche market. Why do we not want to produce, or why are we not as good at producing, greater quantities compared with other European countries? What efforts are being made to expand the market at European level and possibly into third countries?
I thank the delegation members for providing the lowdown on the new regulations that face us. This issue takes me back to our visit to the feedlots in Spain some months ago. I have an interest in veal since then and am astonished that the industry has not taken off here. I would like to see it do so. There is an opportunity for Irish farmers to tap into that market. I agree with the line taken by the Department that if farmers wish to sell their meat as veal, they should be able to do so and if they wish to sell their young animals as beef they should also be able to do so.
I thank the delegation for coming before the committee and congratulate it on the stand being taken. Why are we not able to utilise the significant numbers of calves being exported from here to the Libyan market? This may not arise from this discussion, but it is important the regulations are retained so as to ensure that if we get around to doing so in the future, the market will be available to us. I congratulate the Department on its stance on the issue.
Mr. Mulligan
I thank the Deputies for their contributions. I will begin with the issue of market potential. There is sufficient market potential for the Department, Bord Bia and Teagasc to take an interest in working on pilot projects. If there was no potential, they would not be interested in investing their time and effort in that area. The direction the beef market is taking is towards niche or high quality markets. In ordinary beef or lower price markets we face stiff competition against extremely low cost production in countries like Brazil and Argentina. Therefore, we must concentrate our efforts on high quality markets.
I suggest one of the reasons we have not made much progress on veal is because our beef market has been so successful. We have been able to bring our cattle naturally to a mature age efficiently and get substantially higher prices than in the past. We are working on this area in the context of proposals we are making to the European Union for the development of our suckler herd, for example, and on the beef processing side of the industry. There is also a natural disinclination in Ireland to slaughter calves at the age required for veal. This is a cultural issue we will find hard to overcome. Often we do not want to overcome it as we can bring cattle expertly to a more mature age on grass. We have the grass and have the ability to feed animals relatively efficiently in the context of our EU market, which is why we place over 90% of our product in that market. Approximately 50% of our product goes to the continental EU, quite an amount of which goes directly into the retail sector. The reason it goes to retail is because the product is good, produced efficiently and we get a good payback.
In other circumstances we might have to rush more quickly towards the alternative of veal which would give rise to the cultural situation which will not be overcome easily. However, it is something on which people are constantly working and as long as there is potential, we will continue to work on it. We want to maintain the framework within the European Union, so that if we pursue the veal option successfully in the future, we will be able to sell it at the highest possible price, do it right and as well as can be done in Europe so that it will be a successful element of our trade.
The proposal with regard to the distinction between pink, rosé and white, did not come from us. I mentioned at the outset that we would not bring forward that proposal at this time. However, given the noise we make on a constant basis about labelling at EU level and nationally — members are aware of our position from parliamentary discussion — we are pushing the issue of labelling. If countries with an interest in labelling then raise other matters such as veal, we cannot oppose the proposal, particularly when it may be of interest to us down the road. We can only be realistic about the issue. The countries involved in this issue see a serious distinction between the white veal and the rosé veal. While I agree there are grey areas, the situation changes as animals get older. Consumers want definitive information and the countries promoting the proposal, which are strongly involved in veal production, want the distinction. There was general agreement around the table on the matter. I did not discern any great opposition here from the industry on the matter. If the veal industry here is developed, it does not appear the distinction would be an added burden in terms of labelling. The industry could live with it if the market was right and farmers were making a profit from the product.
With regard to whether there will be less enforcement of labelling here, I would not think so. If labels are to be checked, they will be checked. Irrespective of whether it is a code, part of a four prong approach to labelling of beef or an additional requirement for veal, it should not make a difference. What is different is the number of times people will do the checks.
I know there has been controversy about the extension of the beef labelling to the catering trade. Our division developed the regulations and consulted with the Department of Health and Children and the Food Safety Authority of Ireland, FSAI, on them. The extension to the catering trade probably could not be given the priority that people would have liked, but the regulations will be enforced. Not everything is achieved in a day. Everybody agrees with the principle of the regulations and that they should be enforced as soon as possible. I understand the FSAI is involved in that process and does not see any rowing back in that regard. The extension to the catering trade will have little consequence for us in the short term. However, in the medium to the long term it will have a consequence for us, but more in the area of promotion and marketing than in control, although there will be a control element to the regulations.
I do not have a definite figure on the number of calves that will go through on depopulation, but it is of the order of fewer than 20,000. We slaughter 1.7 million.
Are there any other questions?
Bord Bia and Teagasc have been working on a strategy to promote veal marketing and consumption, but how long will it be before we see that strategy unveiled?
Mr. Mark Zieg
As Mr. Mulligan has pointed out, it is part of an overall strategy on beef for Bord Bia to segment the market more and to try to develop all the individual markets. The veal market is one area in which we have identified significant potential in Europe, which has a market of approximately 800,000 tonnes, equivalent to 150% of what we produce, not that we would ever produce that much. We see a number of other niches in the market, for example, organic, GMO-free and extensively reared products, of which this is just one part.
I will outline the current position in respect of veal. Last year we conducted the technical trials and placed the actual product on the market to see how it would perform. We have found that a great deal of technical work needs to be done to get the product up to the market standard in the premium markets such as Italy. With Teagasc, we are consulting the companies involved on how to commercialise the product. We will do more market research with customers and consumers in the markets before we give the specific market and promotional support and launch the products with retailers and food service establishments. Our efforts to get the product on the market are going from the general to the very specific.
Mr. Mulligan might be able to answer a question on the related issue of the BSE regulations. If he cannot do so, he might get back to the committee at a later stage. I refer to the boning of beef within the butchering trade. I understand animals over the age of 24 months cannot be boned within the trade. There have been discussions at EU level about increasing the age at which BSE testing is undertaken from 30 to 36 months and, possibly to 42 months thereafter. However, there does not seem to be a corresponding increase in the age restriction applied to boning within the butchering trade. The current limit is imposing substantial additional costs on butchers and the production of beef for particular markets
I want to follow up on that issue which I know is not directly relevant to today's discussion. If we are to provide for more freedom in this area, it is vital that we increase the relevant age from 30 months. It is a sore point with many producers. The 30-month period elapses at the wrong time because Ireland has mainly a spring calving herd. It is sometimes used by the industry to downgrade the price received by producers, even when the product still finishes up in the same market. I happened to look at the Bord Bia bulletin late last night. It was so late that I do not remember the actual figures. It is significant that there has been an increase of approximately 35% in live exports. The increase relates mainly to calves and weanlings. It is clear that many calves are going out of the market. Mr. Mulligan mentioned the suckler herd but it is the Friesian-type calf that is actually going from the dairy herd in this instance. While I have consistently supported the right of the live and dead trades to operate together, it is sad in many ways to see a raw material of this nature being exported at the initial stage. All of us want to see a more finished product being allowed to be exported, dead or alive. It is in the interest of the nation to maximise the value of the product before it leaves the country. We must find a way of maximising that value before we export to other countries in Europe. Is it a technicality? Does it depend on whether the veal will lose its colour, for example? Such a claim has often been made in respect of bull beef. Is there any reason we cannot market our veal in Italy as well as other countries such as the Netherlands do?
Mr. Mulligan
I will deal with the last point first. I would have thought that the reason for the increase in the sale of calves and weanlings was the price, rather than the 30-month rule. The interest in veal took off during the avian influenza crisis, particularly in countries that had a culture of eating veal and were in the habit of it. Such countries also had the relevant facilities — they were doing it day in, day out. When they offered higher prices, people took them. I agree that we have to strike a balance between the live trade and the production of beef. We should process the product here, as far as we can within the processing chain, to ensure the value, employment and profit remains here. There is a balance to be struck, however. I do not think it is completely disproportionate yet.
The proposal to increase the 30-month period is constantly being considered. It is becoming the subject of more and more debate at EU level. We have to keep in touch with our colleagues at the OIE. The officials in the meat policy division promote the opening of markets and the improving of access to third country markets. The biggest problem we have in that regard relates to science rather than perception. The BSE crisis was of such concern at the time that people continue to bear it in mind when making choices, particularly in so far as it relates to human health. We have to be very slow to make any decisions in that regard. As I understand it, the scientific evidence supports the proposal to increase the 30-month limit. There is a willingness to make such a decision, but the negotiations in that regard are slow and tedious. As I understand it, other elements in the Department are keeping a keen eye on the matter.
The Department is also examining the subject raised by Deputy Naughten, which is not in my area of responsibility. None of the immediate BSE issues relates to my area, other than in so far as they help me to promote beef by refuting any argument of risk, as we have done time and again. I am aware that strong representations have been made about the costs being encountered by butchers because they are unable to bone certain carcases. I will raise this matter again as it relates to age. I am not sure what arguments are being made. I presume it is the same argument that the Deputy was making — that there should be a corresponding increase in the age at which butchers are allowed to bone on-site. I will bring the query back to the Department. I cannot say anything further at this forum. I am not sure what I will be able to say at a future stage, other than that the matter is being actively discussed.
Perhaps the specific officials who are dealing with these two specific issues can send a briefing note to the committee.
Mr. Mulligan
Does the Deputy refer to boning and the butchering trade?
I refer to boning and the possible increase from 30 to 36 months.
Mr. Mulligan
Right.
I thank Mr. Mulligan.
I thank Mr. Mulligan, Mr. O'Flaherty and Mr. Zieg for attending and the manner in which they responded to the questions raised by the members of the committee. Is it agreed that the clerk to the committee will prepare a draft report on today's discussions for the next meeting? Agreed. We will suspend for two minutes to allow the representatives to withdraw before going into private session to discuss a few housekeeping matters.