Dawn Meats, one of Ireland’s largest meat processors, has confirmed it has reached an agreement to acquire Kildare Chilling Company, a Kildare-based beef and lamb processor.
NA statement, the company said the transaction is subject to the approval of the Competition and Consumer Protection Commission (CCPC), and the CCPC was informed today of the proposed acquisition.
The confirmation of the deal is the latest in a string of mergers and acquisitions in the beef and sheep processing industry in recent decades, with just three companies now dominating the market.
In 2020, Dawn Meats took full control of its joint venture with Dunbia.
Post transaction, the combined UK and Ireland businesses will process approximately 1 million cattle and 3 million sheep annually.
It is estimated that through the acquisition of Kildare Chilling, Dawn Meat will gain a further 5 per cent of the beef processing market and a further 20-25 per cent of the sheep processing market in Ireland.
Prior to the last deal, it was estimated that Dawn (including Dunbia), Kepak and ABP (including Slaney Meats) controlled an estimated 65.4 per cent of livestock turnover in the Republic of Ireland.
Since the early 1990’s the Irish beef sector has undergone significant consolidation and rationalisation, with many of the older, less efficient plants closing and production moving to state of the art beef processing plants which are much more than mere slaughterhouses.
Beef processing market share data is difficult to verify.
In October 2016, the European Commission unconditionally approved the proposed joint venture between ABP Food Group and Slaney Meats.
In its joint acquisition ruling, the Commission estimated that the combined ABP/Slaney entity was valued at around 20-30 percent of the market in 2015; Dawn and Kepak 1-20 pieces each; Liffey, Kildare and Dunbia 5-10 each.
Last week, Irish Cattle and Sheep Farmers Association President Dermot Kelleher wrote to EU Competition Commissioner Margrethe Vestager to express his concerns over the controversial sale of Kildare Chilling to Dawn Meats.
“Here there is precious little competition in the meat processing sector and the loss of independence in this important outlet for cattle and sheep farmers will have a major impact,” he said.
Responding to a parliamentary question last week over speculation about the latest takeover of the meat processing sector, Agriculture Secretary Charlie McConalogue said both companies are private companies and “as such this is a commercial matter in which neither I nor my department have any part.
“It’s important that there is competition in the market to ensure farmers have multiple routes to markets for the premium produce produced on their farms,” he said.
IFA President Tim Cullinan said the Competition and Consumer Protection Commission (CCPC) has a crucial role to play in assessing the potential impact of further consolidation in the beef and sheep processing sector on competition within the sector for farmers.
“Kildare Chilling, as a standalone beef and sheep processing plant, offers significant competition to farmers who sell beef and sheep,” he said.
