JOINT COMMITTEE ON AGRICULTURE AND FOOD díospóireacht -
Wednesday, 7 Jun 2006

Scrutiny of EU Proposals.

Chairman

I welcome Mr. Luke Mulligan, principal officer, Ms Marie Hoban, assistant principal officer and Mr. Dermot Ryan, senior agriculture inspector, from the Department of Agriculture and Food. They will update members on EU legislative proposal COM (2006) 89, a proposal for a Council regulation on marketing standards for eggs and COM (2006) 90, a Council regulation amending Regulation (EEC) 1906/90 on certain marketing standards for poultry meat. I understand they will also discuss the next item on our agenda, the poultry industry. I suggest the committee will first deal with the proposals individually, followed by a discussion on the poultry industry. Is that agreed? Agreed.

Before I ask Ms Hoban to make her opening remarks on the first proposal with regard to the marketing standard of eggs, I want to draw the attention of witnesses to the fact that while members of the committee have absolute privilege, the same privilege does not extend to witnesses. Members are reminded of the long-standing parliamentary practice that members should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable. I now invite Ms Hoban to make her opening remarks.

Ms Marie Hoban

I thank the Chairman. I will first deal with COM (2006) 89, which concerns the marketing standards for eggs. Marketing standards involve such matters as the labelling of egg boxes, what information must go on an egg, how eggs are graded and what it means to call eggs "free range". The exact same standards apply throughout the EU.

The standards are contained in EU legislation, a Council regulation and a Commission regulation, backed up in Ireland by a statutory instrument. This proposal intends to replace Council Regulation (EEC) 1907/90. The EU has embarked on a programme of streamlining and standardising legislation which was agreed late last year. This is part of that exercise.

Regulation (EEC) 1907/90 was amended on many occasions and the legislation has become unwieldy. This will consolidate it. The existing Council regulation also contains a great deal of technical detail, which is more appropriate to a Commission regulation through which it could be dealt with by technical experts. It should not have to go to the Council of Ministers for serious debate every time it must be changed. The technical details include the information which must be placed on an egg box and stocking densities. This proposal will mean the regulation consists of broad points of principle. An article will provide a legal basis for these technical matters to be drawn up later by the Commission with a management committee consisting of representatives from the member states.

The proposal states that eggs must be graded by quality, either "A" or "B", and by weight such as large, medium or small. Class A eggs must be stamped with the producer code, which is already the case. This is a unique number the Department gives each farm. Class B eggs must be marked if they are exported to another member state. An exemption to these marking requirements can be made if the products stay within the territory of a member state, which suits us. Small producers who sell at local markets or from farm gates may also be exempted from certain requirements of the regulation, such as having to go through an official packing centre or be graded by weight and quality but are not exempt from the requirement to display the producer code. Member states will be obliged to establish appropriate systems for inspection regimes and the authorisation of packing centres.

Nothing in this regulation is not already practised by the industry in Ireland. When we brought the proposed regulation to the attention of members of the industry, they had no substantive comments to make. Later this summer, the Commission will draft a new regulation which will be more substantial and will require greater input from the industry.

Deputy Naughten

I thank Ms Hoban for her presentation. The risk of an avian flu outbreak in Ireland is an important issue for producers around the country. If an outbreak occurred, producers are concerned that labelling regulations may not provide enough flexibility to allow the continued labelling of eggs as organic or free range. I am aware this matter has been discussed at Commission level but has any progress been made?

Ms Hoban noted that eggs which are sold locally undergo a less thorough process. That makes perfect sense because we need to encourage local producers to supply food locally without having to deal with the bureaucracy that exists in parts of the food industry. However, concerns have been expressed with regard to certain foods sold in farmers markets, such as vegetables, which are falsely described as organic. What controls are in place to ensure that consumers are not deceived in respect of organic and free range eggs? Will Ms Hoban elaborate on her comment that it suits us that producer codes to not have to be individually stamped on class B eggs?

Ms Hoban also outlined a number of matters pertaining to standards and specifications and noted that stocking densities will not have to go before the Council of Ministers in the future. However, I would be concerned if stocking densities are not considered by the Council of Ministers because they are critically important to the viability of many farms around the country. If stocking densities are dramatically reduced, the commercial viability of these operations will be threatened.

What controls are in place to ensure that imports from outside the EU meet the criteria set out in the regulation?

Deputy Upton

Deputy Naughten anticipated all the key questions I wanted to ask on this matter. However, an emphasis should be given to the labelling of eggs because the issue of traceability has arisen in respect of other food products. I ask Ms Hoban to outline the traceability requirements for domestically produced and imported eggs.

While this regulation seems to solely pertain to hens' eggs, will further measures be introduced to control the production of other types of egg? Although the market in Ireland is small for other eggs, I presume these will also give rise to issues which will need to be addressed. Clarification is needed with regard to categorising free range and organic eggs. We need to be able to ensure that such eggs are genuinely labelled. I am reminded of Dinny from "Glenroe" and his attempts to con people with his free range eggs.

The proposal with regard to local markets is sensible because producers would otherwise be very restricted. Any provision that allows flexibility in the system would be recognised at a local level as a positive approach.

With regard to microbiology, we have always had concerns about eating improperly cooked eggs. It would be a useful marketing tool if we could describe eggs as salmonella free or produced under conditions that would allow them to be salmonella free. Although the regulation does not provide for such a prospect, I would like to hear Ms Hoban's opinion.

Ms Hoban

As regards avian influenza and flexibility in labelling, the regulations provide that the meat and eggs of birds which are enclosed for up to 12 weeks can be described as free range. Such a situation has never arisen in Ireland, although other countries have exhausted the 12 week provision in the past month or so. Some producers would like to continue to describe their products as free range after the 12 week period has expired but the regulations are strict in that regard. The regulations on organic products are somewhat different because they do not provide for a time limit. On the one hand, the consumer should not be deceived because a bird should not be described as free range if it was locked up for six months. On the other hand, a certain degree of flexibility is desirable.

Deputy Naughten

In theory, organic poultry could be permanently housed indoors and fed with organic meal.

Ms Hoban

However, the veterinary authorities of a member state must direct the operation. The producer cannot simply choose such a course of action.

As regards products being passed off as free range, this area is well regulated and every farm in the country has to be registered with the Department to receive a producer code. A number in the code indicates whether a product is free range, barn, cage or organic. The eggs have to be marked either on the farm or in the first packing centre to which they are brought. Our officers visit farms and packing centres and imported eggs are accompanied by documents which indicate their originating farms.

Class B eggs are used in the food industry and cannot be sold in retail outlets. It would be expensive for packing centres to grade these eggs through a machine and it is easier to bring them to Ireland's sole authorised food industry processor in County Wicklow. As we live on an island, it is a self-contained operation.

The EU regulation on marketing standards deals with third country eggs. The Commission evaluates what happens in third countries before allowing eggs to be imported. For example, it must be sure the same criteria apply for free range status. I do not know if any third country eggs are imported into this country but I do not think they are.

Labelling is only a requirement for hens' eggs. It might apply to duck eggs but there is not a significant commercial market in those. Labelling does not apply to hatching eggs, only table eggs, so we have never considered making it a requirement for eggs other than those of hens.

I do not know how the European Commission would view a requirement for labelling eggs as salmonella free. We have an excellent salmonella status. A baseline study of flocks as at October 2005 revealed no cases of salmonella of any significance from a public health point of view, which is an exemplary position. To label an egg "salmonella free" would require that individual eggs be tested, but considerable testing of eggs already takes place on farms. It would be a great marketing tool but I do not know what the Commission's views would be, or how practical it would be to enforce the controls that would be required.

Deputy Upton

The vast majority of eggs are now labelled as quality assured, which implies they are of a particular standard and have been subjected to a series of tests. Is there any statutory requirement in that regard? Is there a voluntary code?

Ms Hoban

It is a voluntary arrangement. There are no statutory requirements to test for salmonella in table eggs. There is a requirement for testing the genetic level of breeding flocks. Following the baseline study the EU will, in the coming months, set a target for table egg flocks that every member state will have to meet. Only a certain percentage of a flock will be allowed a positive reading per year. We will probably begin to implement that provision next year.

Deputy Upton

If eggs are not labelled as quality assured are there any implications? Will it just mean producers have not bothered to engage in the voluntary code or should we advise people not to buy those eggs?

Ms Hoban

Quality assurance is for producers who have chosen to take part in the Bord Bia scheme, which involves extra expense. The eggs' packaging firm must also be interested in labelling the eggs as quality assured. Eggs that are not quality assured have not failed anything but have simply not been included in the Bord Bia regime, for whatever reason. Maybe their producers just supply local shops and are not too concerned about the label.

Deputy Crawford

I apologise for being a few minutes late, which meant I did not hear the delegation's opening remarks. As a Deputy for the constituency of Cavan-Monaghan, the delegation will appreciate that I have some interest in the general poultry industry. I cannot overemphasise the need for density to be maintained at a level that will allow us to produce eggs, and poultry in general, commercially. We face major competition from imports, although not so much on eggs. Can Ms Hoban tell me what eggs come into the country and from where? She might not know how many come from third countries but I would be grateful if she could say what percentage comes from Europe.

There is much concern in the industry. Small packaging companies are alarmed at the merger of the two biggest packaging firms in Monaghan, which raises major questions. In addition, stores tender for eggs on the Internet, which means that anybody making sales in the industry can tender, and undermines the certainty of the long-term contracts between the smaller packagers and their market. The only loyalty is to the cent.

I agree with Ms Hoban that regulations are rigorously enforced. I have come across a number of producers who suggest they might be too rigorously enforced, but criteria have been established and people will have to meet them. The producers are worried, as am I, about whether sufficient effort is being made to find out if our opposition is meeting the same criteria. Ms Hoban says the European Commission is satisfied but I hear that the Commission is satisfied with regard to the meat trade and other industries. When the Chairman or other members visit other countries they find the situation to be totally different. It is not relevant to egg production but our opposition is able to use all sorts of hormones and illegal methods, yet their produce is passed by the World Health Organisation.

Density is important in the context of poultry. I apologise for not reading the submission properly, but an explanatory note states that since 1990 the regulations have been amended six times, because of changing market conditions and housing requirements. When somebody spends a lot of money improving production systems to meet certain criteria, only to find that the European Commission or some other body suddenly changes the criteria, it causes enormous pressure and anxiety in what is a relatively low-income industry.

I am a producer and a consumer. I accept that the consumer must be to the forefront of our thoughts but, as a producer representative, it is vital we are certain our opposition, whether in mainland Europe or elsewhere, meets the same criteria as we do. Only then can there be a fair market. The Minister for Agriculture and Food said in the Dáil that when there was a scarcity one must take produce from wherever one can. That is not good enough. If our producers have to change their system and increase costs as a result then everybody who sells against us must meet the same criteria.

Deputy Naughten

I will return to two issues. First, the 12-week requirement for free range status is only now becoming an issue in many member states. Has consideration been given to extending the 12-week requirement? Initially, there was talk at Commission and Council of Ministers level of increasing the 12-week period with regard to free range products because of the specific issue of avian flu in some member states currently.

My second question relates to farmers' markets. There is no issue with free range eggs being sold at farmers' markets. I assume 99.9% of eggs sold at such markets would be free range. There is a loophole where a product could be sold as an organic egg. It has been stated that there are packing centres and related rules and regulations. As these products do not go through packing centres, are there any checks and balances in place? Do spot checks take place to ensure the consumer is not being deceived?

Our farmers' markets have been extremely successful and I hope they continue to grow. They will only grow if they have the confidence of the consumer. It is important we ensure this happens, with regard to eggs on this occasion but also regarding other food products. Perhaps the witness could elaborate on that specific issue?

Deputy Ó Fearghaíl

On the question of the classification A and B, do we have any statistics regarding the percentage of eggs which would fall into category B? Class A is described as fresh whereas class B is described as second quality. In terms of durability, at what point would a class B egg no longer be entitled to be used or go into the food chain?

Ms Hoban

On the last point, there is a definition of class A eggs in the Commission regulation. It concerns height of air space and that there is a uniform undamaged shell. The yolk should not be near the side of the shell and the white must be clear etc. If the egg is not in class A, it falls into class B. I am not sure of the breakdown of class A and class B eggs. I would imagine class A eggs would make up at least 80% of eggs.

With regard to extending the 12-week period, the Commission stated at the last meeting that it would give some thought to it. It is torn between this and the consumer. Fortunately, the crisis has abated to some extent at the moment. People have gone beyond the 12-week period and the issue might come to a head later on. Nothing has been done publicly on the matter, and I do not know what thought the Commission has given privately to it. That is the current state of play.

With regard to eggs in markets, if a person is availing of an exemption, the terminology used in the regulation cannot be used. One cannot term eggs as large or free range, for example. A person can put out a basket of eggs but they cannot use such expressions in a local market. It cannot be said that the eggs are being fobbed off falsely as free range.

Deputy Naughten

In a local market, can a person say that eggs are organic?

Ms Hoban

A person cannot label them as free range. I am not very familiar with the regulations governing organic produce, as our colleagues in Wexford deal with those.

Deputy Naughten

Could Ms Hoban check that and come back to the committee on the matter? I do not believe there is a problem with eggs being called free range or not. That is a separate matter, as the majority of farm eggs are free range. The issue of whether an egg is organic is real, and it would be important to clarify the issue. It is important that the issue is policed.

I accept what Ms Hoban has stated with regard to free range, class A or class B eggs. It is good to know. I would be grateful if Ms Hoban could provide some clarity to the committee on organic eggs.

Ms Hoban

With regard to Deputy Crawford's question, eggs come in from Northern Ireland. Approximately 20% to 30% of eggs eaten in the country are imported.

Deputy Crawford

We have always eaten them.

Ms Hoban

These mainly come from Northern Ireland. Some supermarkets may have Dutch or Latvian eggs, but that is an extremely small proportion. The vast bulk of the market here is serviced by quality assured Irish eggs. In retail, virtually all eggs are quality assured Irish eggs.

Deputy Crawford

No eggs are coming in from Spain or Portugal?

Ms Hoban

Traces of eggs could be coming in from anywhere, but the volumes would be extremely small. Dutch eggs have definitely come in, and we have seen those. Latvian eggs probably come into Latvian shops. I do not know if eggs have come in from Spain, but it is possible. The same standard applies everywhere. The Commission's food and veterinary office audits the systems member states have in place. Europe can be more competitive than here as the industry is much bigger there. We have that problem.

Retail tendering is a fact of life. The big retailers still buy Irish eggs, although they have a cruel tendering system.

Chairman

Deputy Upton has a brief supplementary question. We must move on.

Deputy Upton

With regard to non-Irish eggs, be they Latvian or Spanish, do these have to be labelled with the country of origin? If I am in the supermarket and buy half a dozen eggs, is there any way I can tell where they are from? They will be labelled Irish if from Ireland, but they may not necessarily be labelled if they are from another country of origin.

Ms Hoban

They are not required to have a country of origin label. The label must be in English. A customer may know by the packing centre number, which has to be on the box. The authorities can decipher the country the eggs came from.

Deputy Upton

I appreciate that this is a much wider issue. It does not specifically relate to eggs, but it is important.

Chairman

That concludes the scrutiny of COM (2006) 89. The clerk of the committee will prepare a draft report on our discussion today for our next meeting. Is that agreed? Agreed.

I now invite Ms Hoban to make her opening remarks on the proposal COM (2006) 90 with regard to amending the regulation on certain marketing standards for poultry meat.

Ms Hoban

This is a much shorter proposal. As with marketing standards, it relates to labelling and the words used when selling chicken, for example. It stipulates what a broiler is or a drumstick, for example. It is a standardised system in place throughout the EU. Poultry must be labelled as class A or class B. There is also mention of the term "free range".

With this proposal, there is a Council and Commission regulation setting out the marketing standards for poultry meat. The Council regulation which exists at the moment, 1906/90, is very out of date. It is peppered with references to labelling and hygiene legislation which was repealed long ago. It is legally unsound. The Commission wishes to replace those references with proper labelling and hygiene references. It is not an overhaul of the regime. It is to clear up the legalities.

The issue of small producers selling locally is covered. Up to now these producers had to be exempted, as it was mandatory throughout the EU. In future, member states can decide whether they want to grant such an exemption for local sale. This would concern exempting a producer killing poultry on a farm from having to classify the product as A or B or label it with certain information. The exemption will be optional.

This regulation will have no impact on industry.

Deputy Naughten

I wish to focus on the issue of labelling. There is much concern among the public about the equivalent standards for products which are in place in other countries outside the European Union and where the products are coming into the country. As a result of the loophole in the current legislation, which allows for substantial transformation, there is interest over such products coming under labelling laws in this country.

Some 70% of chicken used in our catering trade is imported from outside the EU. With this in mind, has the Department of Agriculture and Food developed the issue of labelling within the catering trade? Has consideration been given at EU level to include animal welfare standards in labelling? Will EU labelling legislation ensure that if a product comes from a third country it cannot fall under this labelling law and be redefined regarding country of origin or have an Irish processing number assigned to it or one derived from another member state?

Deputy Upton

: I thank Ms Hoban for her presentation. I welcome this amendment because it basically tidies up legislation on the poultry and meat industry. This substantial transformation is highly significant from a consumer point of view. There are many opportunities to mislead the consumer into thinking a product which is not of Irish origin is of Irish origin. This will exercise the minds of the consumers in addition to the legislators.

Class A and class B poultry were mentioned, what is the distinction? I can see the difference between the eggs because it is clearly defined. Water content is an important issue when discussing what information is made available to the consumer. It is difficult to put all of the required information on one label and people may not pay as much attention as they should to the label but the lack of information indicates a huge gap in the rights of the consumer. Often the poultry people buy contains a lot of water and they may not appreciate that this is the case although, I appreciate, there is an upper limit on this. The information on the label, from a nutritional point of view and relating to the country of origin, is hugely important.

I welcome the application of "use by" dates rather than "best before" or any other terminology on perishable products as it is more specific.

Deputy Crawford

While the change is not major concerning this regulation, the changes in the poultry industry are massive. Closures have been widespread because of the media scare relating to avian flu and there is great anxiety within the industry that so much imported poultry can be sold as an Irish product due to the lack of legal clarity on labelling. I recently visited a very good poultry producer who showed me examples of containers that had their labels changed. This was classified as transformation. It is a serious problem facing the industry. Some poultry meat is coming directly from third countries, and some from the UK, Holland and other places where it is transformed by minor changes. Our industry is being asked to meet all of the criteria mentioned earlier, yet it competes against goods which cannot be proven to be of the same quality.

We are facing a significant decline in the industry. Some processors are going or have gone out of business on the island as a whole, not just in the Twenty-six Counties, because this is an island industry. The memorandum before us today will not deal with these issues and I think it is important to put them on the record. There is a serious problem that is getting worse by the day and nothing is being done to rectify it.

Mr. Luke Mulligan

I agree that the labelling issue is complicated. It has bedevilled us for some time. We are working to get as much as we can regarding information required. The point was made that only so much information can fit on a small label and I concur. When this issue first arose, information other than country of origin was more sought after. It has become clear in recent years, however, that consumers want country of origin information on all of the products they purchase and they are entitled to that. The Commission is slowly coming around to this view also.

The main protection for the consumer regarding labelling may be found in the general food labelling regulations which state that the consumer must not be misled. Misleading advertising on or around a product, including labels, is an offence here and may lead to prosecution. We must go into this in greater depth because consumers demand, for many reasons, to know the precise origin of their food. Due to scares such as avian influenza this demand has increased.

I am head of the meat policy division in the Department of Agriculture and Food and I have responsibility for all meats. We are satisfied with labelling on beef. All information relating to origin must be on all beef produced in, traded in or imported to the country. Admittedly this applies only at retail level, so far, but progress has been made in the last few days on extending this to the catering sector. Some technical difficulties have caused delays in this regard, but I expect an announcement in the very near future.

On poultry meat, we take the view that pig meat and sheep meat should be treated equally. We would like the country of origin made clear on all of these meats at retail and catering sector level. We have raised this with the Commission on several occasions. It emerged from the food labelling group in 2002 and also from a survey conducted by the consumer liaison panel set up by the Department of Agriculture and Food in 2003. We have clear evidence that people want this information.

In the case of poultry meat, only the unprocessed variety is regulated on country of origin. This does not exactly refer to country of origin but rather that any poultry meat entering from third countries must indicate country of origin. This applies only to unprocessed poultry meat and part of the problem is that a substantial amount of poultry meat is processed in some way. The degree of processing cannot always be established and it may be a point of argument whether it represents a substantial transformation. This is an issue that bedevils the subject of labelling. What we would like is to extend labelling to processed poultry meat and to have a clear country of origin in respect of all poultry coming from within the EU or outside. In an effort to do that, the matter has been raised by the Minister at the Council of Ministers. The Minister has also written to Commissioner Kyprianou on the issue. Possibly as a result of that or the concerns in regard to Avian influenza, DG SANCO has published a consultative document on the issue of labelling which covers all these issues. In that context we have made our views known through the Department of Health and Children. I understand that will come to fruition in July but I do not know where it will go from there. Certainly, if what comes out of that does not give us satisfactory information our Minister is already on record as saying she will bring forward proposals as national measures. However, they will have to be approved by the EU Commission and the EU Commission has been very clear on the issue of member states taking their own actions on matters such as this. The committee will appreciate that member states might use the opportunity to make it a restriction on trade. The Commission is anxious that whatever measures are put in place arising from this would apply throughout the EU. We would favour such labelling because as in the case of beef all the information one would require would already be coming through systems that are validated in other member states and are subject to regulation, inspection and audit in other member states. Therefore, if we wanted to extend it to the catering and restaurant trade here we could do so more easily as we in the case of beef. If we take an action in Ireland to require it, then it is up to us to inspect and monitor the imports to ensure they satisfy the same requirements. If it is a matter that is decided at EU level and is monitored and audited at that level then we can be rely on the information coming through.

Chairman

I thank Mr. Mulligan. Does Ms Hoban wish to refer to some of the issues raised?

Ms Hoban

To be classed as A or B, poultry has to meet certain standards, such as cleanliness, free of protruding bones and so on. To be classed as A, poultry has to meet extra requirements set out in the Commission regulation. For example, the carcase has to be of good conformation — it cannot be very thin, few feathers and hair on it, little discolouration or damage to the skin and no sign of freezer burn. If the poultry meets those requirements, it will be classed as A.

On the issue of water content if one is selling poultry that meets these regulations and calling it fresh poultry, frozen chicken or chicken fillet, it cannot have had anything added it. When birds are killed they are cooled down afterwards by means of air spraying, water spraying or immersion in water. Therefore, a certain small amount of water will be absorbed during the cooling process but it cannot exceed what is called the technically unavoidable level. A factory must have a system in place to ensure they are not absorbing more water than is absolutely necessary to cool them down. If one injected water into a chicken, it could not be described as chicken. It would then be a product and would have to be described as such. One cannot sell products under names that confuse the poultry meats we are dealing with.

Deputy Crawford

Sorry for harping on the importation issue but it is relevant to meat or whatever else. As good Europeans we are reliant on the EU Commission to decide the regulations under which we import our product. I refer to my involvement in the meat industry many years ago. If we were selling beef to Egypt, Saudi Arabia or elsewhere an animal could not be slaughtered without their personnel being on the factory floor. The Chairman is aware of that. Given that we export 85% of our beef we have to be careful not to make regulations for importing into this country that are not reasonable. That is what I am looking at from a poultry point of view. We take in poultry from Thailand, Brazil and so on but as Mr. Mulligan said because of the regulations it is hard to control it. Considering the way in which our industry is monitored in regard to density, quality of housing and so on, that our producers spend significant moneys to ensure they meet all the criteria and our processors do likewise, yet when one walks into a processing plant one can be shown a box that simply has a label change on it and it can be sold as Irish, one has to be concerned about how that product was actually produced. In that case we are putting the consumer at risk. I appreciate we are caught in this position. No matter how hard we work towards having proper scrutiny and proper labelling we cannot work hard enough to get this matter resolved once and for all.

Deputy Naughten

I refer to my question on animal welfare standards. Is it possible to include animal welfare standards as part of food labelling in the poultry sector?

Mr. Mulligan said there is a difficulty at Commission level in regard to labelling in the country of origin because of the possibility of restrictions on trade. This is a matter that arises again and again. Is it possible to introduce country of origin at least for non-EU product — there is huge concern abut this among the public — that does not conform to the same regulation or standards in the European Union? That would not be a restriction to trade because it is product coming in from a third country. Would that be feasible as a short-term measure?

Mr. Mulligan made the point that under the current labelling legislation one cannot mislead the consumer as that is illegal. It has been brought to my attention that a particular poultry product on the market in Ireland which has green, white and orange labelling and is named after an island off the west coast of Ireland actually comes from some other part of continental Europe. Would that come under the term "misleading the consumer" or does it have to blatantly mislead the consumer before it can be pursued?

Mr. Mulligan

Imports from third countries of any meat have to come from third countries that have been approved. I know the committee is aware of this but I wish to put it on the record again. It has to be approved by the Commission. Each individual plant also has to be approved by the Commission. All of those plants are subject to regular audit visits from the FAO.The process is brought back to the Commission and a decision is taken as to whether these are up to equivalent standards. That is relatively safe at present. One comment I have heard from an officer of the Department of Agriculture and Food who has visited plants in places such as Thailand is that the standards in the poultry sector are as high as he has seen anywhere. That may offer members some reassurance.

I accept the general principle that people seem dissatisfied that we are subject to such rigors in regard to everything from traceability to very high standards of processing and so on. Where doubts are raised about the standard of imports, as there were recently about Brazilian beef, the position is that one is not always comparing like with like. The concern may relate to an exporting plant. Brazil has been visited a number of times by the FAO, which carried out rigorous checks. It reports its findings to the Commission and they are given an open and full hearing in terms of the approval of those countries and the individual plants concerned.

On the question that product labelling may be misleading, I cannot answer as to whether information on a label needs to be blatant or otherwise, but the labelling information to which the Deputy referred appeared to be misleading. I do not believe the word "blatant" is used in the legislation. If labelling information is misleading and a person could genuinely come to the conclusion that a product is being sold as Irish when it is not, there is a case to be made for addressing that.

On the question of including animal welfare standards on food labelling, I do not know if that is possible. In the context of the WTO talks and non-trade issues, we constantly raise animal welfare, environmental and other issues to ensure the level of standard and care in terms of the cost and effort our farmers are obliged to bear should apply elsewhere, even if there is not an immediate animal health threat.

Regarding the requirement that non-EU imports should indicate the third country of origin, I do not believe we would have the same problem in recommending that to the Commission as we might have with proposals on other issues. This is a requirement in the case of unprocessed poultry meat. I do not know why the Commission did not go a step further when making that decision, but Deputies will appreciate it is probably the product that is processed most and a great volume of it is processed. Therefore, it is an area that might be difficult to police. The Department's view is that in the case of any product that contains more than a certain percentage of meat — that percentage should be agreed at EU level — the country of origin of the meat should be indicated. We would press for a full indication of the country of origin as opposed to an indication to the effect that the origin is EU or non-EU. However, we will seek to secure such a requirement in any negotiations in which we will be involved in order to reassure the public.

Chairman

Ms Hoban does not have any queries to answer.

Ms Hoban

No.

Dr. Upton

Ms Hoban mentioned freezer burn in the context of poultry. Are there regulations covering the thawing of frozen poultry? Is one entitled to market frozen poultry that has been thawed as fresh poultry?

Ms Hoban

No, one is not. Fresh meat is defined as meat maintained at a temperature of between -2°C and +4°C. It must be maintained at that temperature to be described as fresh. One cannot thaw meat and then call it fresh meat. The Deputy has asked a significant question. The Dutch are always raising this issue. Meat could be kept at a temperature of -8°C, which seems to be a practice, and then the temperature can be raised and it can be sold as fresh meat. For meat to be defined as fresh, it must be maintained at between -2°C and +4°C.

Dr. Upton

Is there any system for monitoring practice in this area? If I buy some chicken fillets in the supermarket, does anybody know whether they were at one stage frozen, then thawed and subsequently for sale as fresh meat? Is there any traceability system in place on such products?

Ms Hoban

No, one must rely on the integrity of the people involved.

Dr. Upton

It is a matter of relying on the honesty of the people selling the product.

Ms Hoban

Yes. While our officers carry out hundreds of checks annually in terms of labelling, one would not know by looking at a product if it had been maintained at -8°C at one stage. One would have to gather evidence to take action, but it would be difficult to detect such practice from merely looking at the product.

Dr. Upton

I will check the label for fresh poultry any time I buy it.

Chairman

That concludes our scrutiny of COM (2006) 90. The clerk of the committee will prepare a draft report on our discussions today for next meeting. Is that agreed? Agreed.

I invite Mr. Mulligan to make his opening remarks on the chicken industry and market.

Mr. Mulligan

I thought this would be a question and answer session and I did not prepare a presentation, but I prepared a few notes in anticipation of questions that may be raised which I can go through if the chairman wish.

Chairman

Yes.

Mr. Mulligan

We regard the industry as an important part of the agricultural sector. There are about 850 commercial farms. We estimate the farmgate value of the sector at €150 million made up of €120 million on the meat side and €30 million on eggs. That represents 3% of gross agricultural output.

We are, on average, 100% self-sufficient in poultry meat. Approximately 6,000 people are employed in the sector, which includes production, processing, and linked services. We have 14 approved slaughter plans, of which we have four main chicken plants, one turkey plant and one duck plant. Approximately 80 million birds a year are slaughtered in the industry and approximately 568 million eggs produced. The consumption of poultry meat here at least up until recently has been at the rate of 32% of meat, in terms of pigmeat at 39%, beef at 23%, and sheepmeat at 6%. That shows that poultry meat is a fairly substantial part of our diet.

We produce approximately 150,000 tonnes of poultry meat every year and export 96,000 tonnes, including products. Some 85% of those exports are to the UK. Imports, including products, are 74,000 tonnes of poultry meat. More than 50% of those imports are from the UK with approximately 30% from other EU member states and the balance of imports is from elsewhere. Some 6% of imports are from Thailand and 4% are from Brazil. Most of the retail sales here of fresh chickens are Irish, to which Ms Hoban referred.

I have some notes on labelling issues, which I covered in the earlier discussion. I presumed I would be asked some questions on the threat of an outbreak of avian influenza and compensation measures in that respect. Members may wish to ask questions on that, or I can give a summary of what we have done in this regard.

Chairman

That might be no harm.

Mr. Mulligan

The avian influenza threat has been an issue for quite some time. The main dip in demand in our industry happened around February. There were variations in the slump in demand, with the catering section being hit worst and then demand came back into balance. However, demand fell by 20% but thankfully that slump did not last long. There was another slump in demand around April with demand falling by 20%. Other than those periods, while demand was maintained, there was a 10% fall in it, but with the summer peak demand, demand in the industry is back to around normal levels.

The position was considerably worse in Europe, with countries such as Italy suffering up to a 70% drop in demand. The Commission was under considerable pressure, including from Ireland, to introduce special market support measures. Heretofore, compensation was granted only in the event of an outbreak of the disease and it was given only to producers whose diseased flocks had to be slaughtered. The Commission has given no indication of the measures it would favour being introduced — this is relatively new ground for it — other than indicating it would like the process to apply at the earlier stages where hatching eggs would be destroyed or breeding stock taken out rather than producing the meat, stockpiling it, giving aid for private storage, buying up the stock, giving food aid or measures such as that. However, they have not ruled anything out.

On that basis we wanted to put forward proposals that would cover every possible scenario we could envisage. The matter came up for discussion at the poultry management committee meeting on 17 May and that is where every country set out its stall. Amazingly, we all were largely concerned with the same issues. There was discussion previously that other member states were taking quite a different view, but in the end there was relative consensus on the breadth and type of measures needed.

We then put forward definitive proposals to the Commission on 22 May. These included five main areas. One was to make payments for the destruction of hatching eggs and the second was the early slaughter of breeding stock, both of which would be likely to find favour with the Commission. Then, less likely, was payment to growers and/or processors to encourage reduction in throughput and an aid to private storage scheme to deal with stock which has already piled up and any future stocks that might arise from future scares before the reduction in production would take effect from the earlier measures of the destruction of hatching eggs and the taking out of breeding stock. Lastly, there was a possibility of a marketing promotion which the Department might conduct. There is always a difference of opinion on whether it is good to be marketing something when it is perceived to be in difficulty in that one might be making a situation worse. At some point or other, we must make the statement that the poultry meat in Ireland is safe and we should be able to promote that when the environment is right; we also included that in our proposals.

The Commission wants to discuss the matter and Mr. Ryan and I are going to Brussels on Friday next for a bilateral meeting on it. The matter will arise on 21 June and we hope for a decision on that date on which of these measures we might be allowed to implement.

There are three main areas we want to target. One is the stockpile of poultry meat currently in stores here. It was put into storage between February and April. That stockpile is of the order of 4,000 tonnes, largely consisting of legs, wings and by-products which are in the main exported. In the circumstances which arose right across the EU and in third countries, the market plummeted. Either people took a bad hit on price or they could not get rid of it at all. That stockpile is still in storage. If a scare, even a mild one, occurs again in September-October, that stockpile may increase. We want to deal with that matter.

We also want to see if we can do something for the sector that took the bad hit in February, March and April. Quite a number of people suffered badly, and there is much sympathy for them. I am not too sure how far we will get with the Commission in that regard but it is a matter that we will at least push when we are in Brussels.

Most important, we want a framework for the future so that if something as bad, or even worse, hits us again, we will be ready to push the button rather than at that stage initiate discussions on the details. Our ideal would be to have everything in place.

Those are the three goals on which we aim to get assurance from our bilateral meeting. After Friday we should know the thinking of the Commission but I expect it will be 21 June before we will be clear on it.

We consulted widely with the farm organisations, producers and processors on all of this. We are happy that there is something in it for everybody. It might not compensate people as much as they might expect or want, but our intention is to have the greatest variety of measures ready to ensure the safety of this industry. The industry operates on small margins and on a quick product turnaround, yet the cycle of getting product to the stage of sale is as long as 60 weeks and one cannot merely turn on the process like a tap. We want to be able to be flexible with these and to sustain the industry until such time as we are over this hump altogether.

Mr. Naughten

As time is tight, I will leave the specifics of the compensation to my colleague, Deputy Crawford, because it is an issue close to his own heart, and ask two specific questions.

The Department gave an indication over the weekend that if there is an outbreak of avian influenza in Ireland, producers who do not protect their water sources will be found liable and pursued for compensation. Will Mr. Mulligan elaborate on the steps being taken, at both commercial and domestic levels, to protect water sources and the advice and assistance being provided by the Department? On a related issue, is Mr. Mulligan now satisfied that all of the poultry flocks in this country are registered and that small domestic poultry flock owners are conscious of the need to protect water sources?

The comments on "The Late Late Show" about Irish poultry products did as much damage as avian influenza in this country. Not enough was done at that time to counteract the comments made on that programme. What steps are being taken, even at this late stage, to counteract the damaging comments made by someone who is seen to have a strong reputation in this area and to whom consumers related at that time?

Chairman

Does Deputy Naughten realise that the committee wrote to RTE at that time? We received a reply stating that the matter was looked at the following week. I do not think those who were looking at "The Late Late Show" were listening to the "Today with Pat Kenny" on the following Monday or Tuesday morning, but of course that is typical of such people.

Deputy Upton

On the last point, the matter is one worth pursuing again. There must be some responsibility to level the playing field in that case. A great deal of damage can be done by a few throwaway remarks which go unchallenged. To write back to us stating that it was compensated for by virtue of a subsequent radio programme does not take account of the different audience involved. The issue was quite different altogether. That has been significant in explaining part of that slump in the market. I do not know whether that can be quantified but the committee should not let the matter go unchallenged.

The question of domestic flocks being registered has been addressed already. I presume the stockpiled product is frozen. Would that be spread across a number of producers and would each individual producer have had to take responsibility for stockpiling his or her own? Was it more or less down to individuals and how did they manage that?

Does the Department know whether the dip in the consumption of poultry meat predominantly affected fresh poultry or were value-added products such as chicken nuggets, breaded poultry or poultry in garlic butter equally affected?

Deputy Crawford

I reiterate what my two colleagues have stated about the damage done by the comments made on "The Late Late Show". There also was an article in a newspaper about body bags and all sorts of scare tactics. I hope that the Department would spend the money necessary to counteract that type of seriously damaging publicity.

I welcome the efforts of the officials to try to put something together here. Without using scare tactics, there are people in industry under considerable pressure at present. We have had to compete with Northern Ireland, where the industry did not have to meet any planning regulations and could increase production dramatically. We simply could not meet that competition.

As has been stated already, we have much product in deep freeze and it is overhanging the market. The normal attitude of the factories would be to take their loss immediately and get clear of the product to whatever market, but on this occasion they could not find a market for it. It is a serious issue.

I stated earlier that breeding houses were closed down. Therefore, it is necessary that the different sectors get compensation. A producer told me that his houses are lying idle because his birds were killed as the hatchery no longer wanted the eggs. We must deal with this sort of situation. I am concerned lest the majority of the compensation goes to the processing side and little goes to the primary producers, despite the fact they have suffered significantly.

We must also remember that closing down the supply chain, for example by reducing the number of eggs going to the hatchery, automatically reduces the number of birds in units thereby increasing costs per bird and lowering the profit per batch. Oil, gas and heating cost more and these factors must also be taken into account. In general, I am pleased with the attitude Department officials are taking, but it is important to deal with the issues as soon as possible. I would encourage that.

Mr. Mulligan

I understood we would not stray into control measures relating to avian influenza. That is not my area, which is the meat policy division. However, I was at some meetings where the issue of the chlorination of water arose. I understand that where the Department advises people with regard to biosecurity measures, particularly where it provides compensation or a contribution towards the cost involved, producers who do not act responsibly and take up the measures will not benefit from the compensation. However, this only relates to compensation and not to market support measures.

I do not know the exact situation. I saw a report in the newspaper that farmers would not get compensation if they did not take the advice on biosecurity measures. As far as I understood, there was some contribution towards taking the measures, but I am not sure about that. That seemed a reasonable view to me.

That all flocks should be registered is an issue that has been aired a number of times. We cannot be sure that everybody with a chicken in the backyard will register, but we got positive feedback that substantial numbers of flocks are registered and the Department is satisfied with progress in this regard.

The next issue related to the comments on "The Late Late Show". I heard those comments and thought they were abominable. We do not know the agenda or reasons for them. I agree it is difficult to take back something once it has been said, no matter how often it is contradicted. I heard the same gentleman on the radio at the weekend and he could not have mentioned the sale of chickens more often over his five or ten minute interview. Whoever talked to him certainly cleared the air and I felt he was very positive on the matter in that interview. However, that does not get us out of the job of trying to ensure the industry is maintained at as strong a level as possible. Damage done by such comments or otherwise must be counteracted.

We considered a promotion and spoke to people in the industry about it. As it happened, immediately after the TV show one of the processors did a radio interview. The Minister also visited a processor and got some good air time that allowed her to show the proper controls involved. To an extent there was some counteraction which had a good effect and recovery was fairly immediate. While there was a blip that week, probably within a week sales began to return to normal. I imagine the blip was a direct result of the comments and of the atmosphere prevailing at the time relating to avian influenza. Those comments might not be as damaging now or at another time but when they were made they were associated with avian influenza even though they had nothing to do with it. That association caused an almost immediate 20% drop in sales as reported to us. However, the drop was shortlived.

We also spoke to the FSAI about making strong statements about the safety of our product and about the possibility of a promotion, either by the industry or by the Department being allowed do it by the EU Commission. We were advised against that on the basis that if there was a recovery, we would only contribute to the damage by reminding people of it. One must be very careful about when to promote a product that is in trouble. We took advice on the matter at the time and that is the reason the promotion of poultry meat features in our proposals to the Commission. We will discuss that with it on Friday. We hope that when everybody agrees the time is right we can regain stability in the market, promote the product again and give it a lift to overcome the hammering it has taken in recent times.

On the issue of stockpiling, this has largely concerned two main processors and not producers. This is a peculiar industry in that the majority of the product is owned by processors who supply day-old chicks to the producers. I agree with Deputy Crawford that everybody in the chain is affected. We have taken seriously the representations we received from the farm organisations and producers. However, with regard to storing or stockpiling, the product is in the ownership of the processors. Of the four main chicken processors, two main ones are largely responsible for 80% of what is stockpiled. If we get a measure to deal with this, it should be quickly and easily implemented.

I have no particular information on the effect on by-products such as breaded chicken, but as far as I know, everything suffered. When my daughter mentioned chicken nuggets to me, I questioned the amount of chicken in them, but I should not have done that. The effects on all products were in people's minds and therefore all chicken products were affected, but to what degree I am not sure.

On the question of body bag tactics, I do not believe all that. We would not countenance it. Sometimes such stories go in one ear and out the other. I am buoyed up by the fact that chicken sales are now back to near normal levels. This is the peak time for chicken sales and therefore we will not be complacent.

There is a downside to the situation also. We are going to the Commission to look for money at a time when it appears the crisis is over. We will emphasise that the crisis is ongoing and that it is something about which we must be ever vigilant. We need to deal with the existing situation and with those who suffered at the time. We also need to anticipate, plan and have a framework in place for the future. How persuasive we will be remains to be seen.

I assure Deputy Crawford that compensation will apply across the sector. We understand the structure and have been patiently going through it for days to try to understand who owns what and the contribution made by those involved. We will seek something for growers and processors for the reduction in throughput. We know that if hatching eggs are destroyed that is not the end of the problem. Costs rise at producer level because of that. We accept that, but I am not sure how far we will get with the Commission because it keeps emphasising it wants to deal with the primary section and with compensation for lack or loss of income. The problem has not featured in other similar schemes.

This is a special industry and we are making a special play for it. We have put our best case forward and will re-emphasise it on Friday and at the poultry management meeting on 21 June.

Deputy Crawford

I just want to make a quick point. The history of the Department in disease control is extremely good — particularly in my Cavan-Monaghan constituency — and I congratulate the Department officials on that.

Chairman

We would all like to be associated with those remarks. Do members think we should invite Mr. Corrigan to a meeting of this committee? Perhaps they would like some time to think about it. It may not be a bad idea to invite him to come here so we can ask him a few straight questions. Do members of the committee want some time to think about it? Do they think such an invitation would not be appropriate?

Deputy Naughten

We should seriously think about it anyway.

Chairman

Yes. We should think about it.

Deputy Wilkinson

I raised this issue at the time. While Mr. Corrigan's comments were way out of order, a great deal of blame must be attached to the presenter of the show on which the comments were made. We live in an era in which truth is suffering at the hands of sensationalism. I think one of the two men in question is as guilty as the other. I would not be satisfied at all with the efforts RTE made in that instance. I accept the sensitivity of the matter. Perhaps it would be harmful to resurrect the issue. The presenter of the programme in question was totally out of order as well. If one is to invite a person to give one side of the story, one should also invite somebody to express the opposite opinion.

Chairman

The only problem is that Mr. Kenny has gone on his holidays for the summer.

Deputy Wilkinson

He will be back at some time.

Chairman

We will get him later on in the year.

Deputy Wilkinson

Okay.

Deputy Upton

We should reflect on the matter before we take any further action in this regard.

Chairman

I thank Mr. Mulligan, Ms Hoban and Mr. Ryan for attending today's meeting, responding to the questions which were asked by members and speaking about the three matters which were on the committee's agenda today.

Sitting suspended at 1.05 p.m. and resumed at 2.10 p.m.